Alchem plant up for grabs at Sept. 29 auction

By Holly Jessen | August 27, 2010
Posted Sept. 20, 2010

A 10.5 MMgy ethanol plant in Grafton, N.D., which will be auctioned off Sept. 29, has been sitting idle for several years. However, millions of dollars in upgrades completed after it was shut down make it an attractive buy for someone looking for a sweet deal, according to Scott Steffes, president of Steffes Auctioneers Inc. "That property is going to sell for pennies on the dollar just on the upgrades alone," he told EPM.

Steffes Auctioneers will hold an absolute auction for the ethanol plant, meaning there is no minimum bid amount to purchase the plant. "It's being sold to the highest bidder regardless of price, with no reserve," he said.

Also for sale is personal property, which will be auctioned the following day, Sept. 30. This includes a large variety of parts, accessories, shop equipment and office furniture.

The facility started out as a potato flake plant and began producing 3.5 MMgy of fuel ethanol in 1983. Alchem first utilized parsley potatoes as a feedstock, then wheat, before settling on corn.

Harold Newman of the Newman Group was one of eight investors until the mid- to late- 1990s, when he bought out the other shareholders. By August 2007 the plant had increased its capacity to 10.5 MMgy but was only producing 8.5 MMgy. At that time Newman hinted to EPM that there was talk of expanding to 18 MMgy. By October 2007, however, the plant had shut down due to the high cost of corn and low price of ethanol.

Upgrades to the plant include an automation system for the coal-fired boilers and a steam generating system. It has a thermal oxidizer system that has never been operated, a methonator system, a C02 scrubber and other items.

The real estate includes about 111,000 square feet of buildings, including a scale building, office area, and a coal shed with more than 700 tons of coal. A portion of the building caved in and was damaged due to snow the winter of 2009-'10. "The property will be sold in its present condition," according to Steffes Auctioneers.