Plant updates: Increased earnings, acquisition, startup

By Holly Jessen | September 23, 2010
As summer faded to a close, the ethanol industry continued to grow and develop. In late July and early August, several big-name companies made some feel-good announcements. Notably, Archer Daniels Midland Co., Green Plains Renewable Energy Inc. and The Andersons Inc. all reported increased income. Other news announced during this time included technology upgrades, the purchase of an idled plant and plans to build an ethanol plant in Germany.

ADM reported increased earnings in the fourth-quarter and for the fiscal year, which ended June 30. Compared to the previous year, the company saw an increase of $246 million in net earnings and an increase of $786 million in segmented operating profits. The fourth-quarter net earnings increased from $388 million to $446 million and segment operating profit increased from $591 million to $799 million during the [overkill/what other kind of period was there in 2009?] time period in 2009. The company's profit increased in the corn and oilseeds processing and agricultural services segments. Corn processing came out on top, with a $151 million increase in profit, specifically due to stronger bioproduct results, the company said.

GPRE, the fourth largest U.S. ethanol producer, also reported good financial news. For second-quarter 2010 the company had net income of $8.7 million, or 27 cents per diluted share. Those numbers were up considerably from $600,000, or 3 cents per diluted share, from the same period in 2009.

The company also announced plans for technology upgrades. On July 20, GPRE said it would move forward on a $4.5 million expansion to sequester CO2 using a BioProcess Algae Grower Harvester. Testing at the 65 MMgy GPRE ethanol plant in Shenandoah, Iowa, will scale up to see if the technology will prove out for industrial use, said Jim Stark, vice president of investor and media relations. A few days after the algae project announcement, the company said it plans to install corn oil extraction technology at all six of its plants at a total cost of $18 million, with the projects expected to be completed by the end of first-quarter 2011.

The Andersons Inc.
The company reported in early August that its grain and ethanol group set records. In the first six months of this year operating income was $40.3 million and $14.7 million in 2009. The group's operating income was $19.6 million in the second quarter, significantly higher than its result of $8.9 million one year earlier. The grain business did well due to increased space income, the company said, and the ethanol business benefited from a large portion of ethanol sales being contracted previously, when margins were high.

Aventine Renewable Energy Holdings Inc.
In mid-August, Aventine completed the acquisition of the Riverland Biofuels ethanol plant in Canton, Ill., for a purchase price of $16.5 million. "This is an exciting opportunity to acquire a 38 million gallon facility at a favorable price," said Aventine CEO Tom Manuel in a press release. "When operational, we will leverage the proximity of the Canton facility to our Pekin, Ill., facility to gain marketing and operational synergies."

The company has not specifically said when and how the plant would be made operational, however. The plant has had a rocky history, starting out as a farmer co-op that went bankrupt in 2007 and produced ethanol only intermittently as Riverland Biofuels between 2008 and March 2010. The plant shut down this spring after an Illinois Environmental Protection Agency investigation into alleged discharges into nearby lakes.

Range Fuels Inc.
Cellulosic ethanol producer Range Fuels is one step closer to producing cellulosic ethanol at its Soperton, Ga., plant. The company announced Aug. 17 that it had completed an initial phase of production by producing cellulosic methanol, which is expected to be followed by ethanol production in the third quarter. "The reason for starting up on methanol and then following with ethanol production is that the methanol catalyst is not as costly," David Aldous, Range Fuels' president and CEO told EPM.

Construction to expand the plant to 60 MMgy of cellulosic biofuels is expected to begin next summer. The plant is permitted to produce a total of 100 MMgy of methanol and ethanol.

Sd-Chemie AG
The Munich-based specialty chemical company announced in late July that it would build a cellulosic ethanol demonstration plant in Germany. The company plans to produce up to 2,000 tons of ethanol from agricultural waste such as cereal straw by the end of 2011. The $36 million project will be built near the new Bavarian BioCampus in Straubing. Sd-Chemie has been testing its trademarked process in a pilot plant since the beginning of 2009. "By launching construction of this demonstration plant for our so-called [trademarked] sunliquid technology, we continue to pursue our strategy of developing to market maturity sustainable manufacturing processes for climate-friendly biofuels and chemicals, based on leading expertise in the fields of catalysis, biocatalysis and process engineering," said Gnter von Au, managing board chairman.