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Posted on  

December 27, 2002

New plant to produce ethanol

By RON FIELDS
rfields@thehawkeye.com

Fuel will be added to the economy of southeast Iowa and west–central Illinois with the construction of an ethanol plant near West Burlington.

A cooperative of investors, Big River Resources, broke ground this fall on the plant this fall, a facility designed to process 15 million gallons and produce about 40 million gallons of ethanol each year.

Ray Defenbaugh, co–chairman of the co–op, said about 45 percent of the $57 million startup costs has been raised through investors. The remaining capital will come in the form of a $32 million loan.

While Defenbaugh said the 45 percent figure is strong, but the co–op wants to have ample capital to weather any adverse conditions, such as a war in Iraq, or increased corn or fuel prices.

"We want to operate from a real strong position," he said.

To date, 540 investors have signed on with the co–op. Defenbaugh said between 90 percent and 94 percent will actively participate in the production process as corn producers. Farmers from a 40– to 60–mile radius are expected to be served by the plant.

The investment drive will continue into late February, Defenbaugh said.

A minimum buy–in for the co–op will cost $11,000 — two shares at $5,500 each and a one–time $500 membership fee.

At least 32 workers will be employed at the ethanol plant when it begins operations, scheduled for spring of 2004, but Defenbaugh expected that figure to be closer to 40.

The co–op is interviewing candidates for the general manager's position, a job that likely will be filled this spring.

Because the fermenters at the plant will need to run almost continuously, the facility will operate 24 hours a day, seven days a week, with the exception of short, regular closures for cleaning and maintenance.

Defenbaugh said the early stages of the plant construction have gone smoothly, with site preparation now completed.

"Things have worked pretty smoothly. It's a slow and arduous job putting this thing together from beginning to end," he said.

If Mother Nature cooperates, Defenbaugh said concrete work could begin in January. He said the entire construction process is expected to last between a year and 16 months.

After ethanol production begins, Big River will work with a marketing agent, who will earn a commission for selling the co–op's finished product to refineries.

Defenbaugh said the co–op has "three real good prospects" for a marketer and is close to finalizing a deal.
 

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