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AGP to double biodiesel capacity

By Staff | Jun 24, 2011

“With 30 new jobs and supporting other businesses, this is an overall positive for the (soybean) industry and for soybean demand.” —Grant Kimberley Director of marketing development, Iowa Soybean?Association

ALGONA – Ag Processing Inc., based in Omaha, is looking to double its renewable fuels refining capacity with the announcement Wednesday that it had signed a letter of intent to purchase the idled East Fork Biodiesel LLC biodiesel plant near Algona.

AGP, a soybean producer-owned cooperative that operates in five Midwestern states, did not publish the purchasing price of the plant. The facility, built in 2007 for $63 million, has a capacity of 60 million gallons of biodiesel annually. The new plant will be AGP’s third biodiesel plant, giving it a total capacity of 120 million gallons.

Mike Maranell, senior vice president for AGP, said the idled plant was run long enough to get its certification, but then closed down soon afterward. He said AGP intends to get the plant back on line no later than Sept. 1.

While the plant is being readied, Maranell said, “We have to find 31 people to run the plant.” He said AGP plans to transfer personnel from its other two plants to train the Algona staff and then turn day-to-day operations over to the new employees.

AGP is the world’s leader in soybean processing and a leading U.S. supplier of refined vegetable oil, Maranell said. With nine soybean crush plants – six of them in Iowa – Maranell said he thinks there could eventually be other business projects that would develop around the Algona plant.

Maranell said the doubled biodiesel capacity will do two things for the cooperative:

  • Create a larger demand for biodiesel.
  • Expand and add value to soy products for its member/owners.

“That’s part of our mission,” Maranell said. “Doubling our capacity will add reliability for our customers. They’ll know that we’ll deliver the goods.”

He said AGP will use feed stock from its nine soybean crushing plants. The six crush plants in Iowa are in Emmetsburg, Eagle Grove, Mason City, Sheldon, Sergeant Bluff and Manning.

Maureen Elbert, executive director for the Kossuth/Palo Alto County Economic Development Corporation, said this would be a financial boost for the two-county area.

“We were pleased to learn that AGP, a long-term supporter of the renewable fuels industry, has submitted their intent to purchase the former east Fork Biodiesel plant,” she said.

“With the potential for 31 new jobs, this will certainly inject additional dollars into our local economy and could stimulate further economic development through linkage business.”

Grant Kimberly, marketing development director for the Iowa Soybean Association, said the news was god for the Algona economy, but also for producers.

“With 30 new jobs and supporting other businesses,” Kimberley said, “this is an overall positive for the (soybean) industry and for soybean demand.”

When asked if the local soybean basis will be affected by the development, Kimberley said “There should be no impact. This is not a crush plant.

“The oil will come from (AGP’s) other crushing facilities.”

AGP was the first company in the United States to construct a purpose-built soy biodiesel plant at Sergeant Bluff in 1996. The cooperative constructed a second soy biodiesel plant at St. Joseph, Mo., in 2007. The two plants have a combined annual capacity of 60 million gallons of biodiesel.

“AGP is a long-term supporter of the renewable fuels industry, particularly soy biodiesel, which complements our soybean processing platform,” said Marty Reagan, AGP chief executive officer. “Soy biodiesel reduces our nation’s dependence on foreign oil while strengthening Midwestern agriculture and rural communities.”

AGP is a regionally federated cooperative owned by 185 local cooperatives in the U.S. representing 250,000 farmers.

Contact Larry Kershner at (515) 573-2141, Ext. 453 or at kersh@farm-news.com.

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