Yesterday, Australian Ethanol announced its 100%-owned US subsidiary, US Biofuels Inc, had acquired Nebraska-based Beatrice Biodiesel (BBL) for $A600, 000 plus the issue of 5 million fully paid Australian Ethanol shares.
Payment of more than half of the consideration is contingent on approval for BBL to build a production facility south of Lincoln, for which Australian Ethanol has earmarked $US2 million.
“The Beatrice Biodiesel Project plans to construct a 50 million gallon per year manufacturing facility using soy oil as the feedstock,” Australian Ethanol said.
“BBL has received a proposal from a major Fortune 500 US grain and commodity group to supply all the required soy oil and offtake all the B100 biodiesel product from the Beatrice Biodiesel Project for five years.”
BBL has also received conditional proposals for project finance from the Beatrice Biodiesel Project from a local farm credit group and a major regional bank.
The BBL process technology is to be supplied by Axens North America Inc, a subsidiary of the Institute of French Petroleum-owned group, Axens IPF Group Technologies.
“The Axens second-generation technology and guarantees on biodiesel and high quality glycerine provided by Axens IFA Technologies would overcome the current quality issues for biodiesel currently being experienced in the Midwest,” said Australian Ethanol’s US-based director Dr Michael Douglas.
Last week, another Australian company, little-known Brisbane-based Global Ethanol, agreed to pay $US100 million for a 60% stake in Midwest Grain Processors, one of the largest ethanol plants in Iowa, a state in the heart of the US cornbelt.
The deal must be approved by a majority of the cooperative’s 1300 farmer-owners, but Iowa Senator Charles Grassley urged farmers who own not to sell control to a foreign company.
Grassley said farmers need to retain control of ethanol plants and other agribusiness projects if they want the most benefit from new processing operations. Investing in ethanol plants allows farmers “some control and some benefit beyond the farm gate” for the crops they sell, he said, according to Iowa newspaper, the Des Moines Register.
But Midwest Grain Processors chairman Dave Nelson, himself a farmer, said the investment was needed for expansion of the plant.
The US ethanol industry is struggling to expand production to fill demand for the gasoline additive in Texas and the country’s East Coast, the Des Moines Register said.
Gasoline refiners are using ethanol to replace another octane-boosting additive, MTBE, which has caused environmental problems in parts of the US. Some states have banned MTBE, and the oil industry has been unable to get Congress to enact legislation protecting it from MTBE-related lawsuits.
There are 95 ethanol plants currently operating across the US, with a combined capacity of 4.3 billion gallons a year, and another 34 plants are under construction, according to the Renewable Fuels Association.
Those new facilities and expansions at nine existing plants will add another 2.1 billion gallons of production.
