Iowa-based Renessen will combine biotech corn hybrids with energy and nutrient levels that have been increased with a novel dry-corn separation technique designed for ethanol facilities.

The pilot-scale facility will be built at Cargill's Iowa BioProcessing Center campus in Eddyville, about 110 kilometres southeast of the capital Des Moines.

Renessen said the plant will provide engineering data to help refine specifications for building a full-scale commercial plant and developing livestock feed markets. The company will contract some Iowa farmers to provide corn from the 2006 growing season to ensure there is a ready supply in time for the plant's expected opening in January 2007.

The ethanol plant will use novel processing technology on a high-nutrient corn specially adapted for the process. It is intended to produce several products on site, including corn oil for food and biodiesel, a nutrient-rich feed ingredient for use in swine and poultry production, a more easily fermentable ethanol medium, and an enhanced form of distiller dried grains with solubles (DDGS), the standard cattle feed co-product of today's ethanol dry-milling process.

Renessen said the new production process should be more profitable because the nutrient-rich feed ingredient, the corn oil, and the enhanced DDGS that will be produced all have potentially greater value than traditional dry-grind ethanol co-products.

Assuming the production process is successfully tested, Renessen will seek partners in the ethanol industry to help to commercialise its technology.

Chief executive officer Dr Michael Stern said that as a result of rapid expansion in the domestic ethanol industry, there had been a concerted market push for new technologies that enhance ethanol yields and improve co-product values

"Our process does both, and also will greatly reduce the need for natural gas to dry the non-fermentable material. This is a great opportunity for US corn growers, livestock producers, and the biofuels industry as a whole," Stern said.