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Biodiesel plant to re-open

By Staff | Sep 24, 2011

The retooled biodiesel plant in Mason?City, SoyEnergy LLC., is gearing up for new operations. Plant officials said the former employees of Freedom Fuels, which built the plant, will be rehired.

MASON CITY – A biodiesel plant which has been sitting idle since October 2007 is being retooled and toward a start-up date soon.

Rick Davis, general manager of SoyEnergy LLC, in Mason City, described that biodiesel refining facility is a “generation 2 biofuel” refiner with an annual output of 30 million gallons.

The plant was originally constructed in 2006 and operated under the name of Freedom Fuels using soybean oil it purchased to make biodiesel.

The plant closed in November 2007 due to financial problems. The company filed for Chapter 11 reorganization in November 2008.

Unrelated to the plant’s opening in 2006, Davis said, approximately 1,000 investors with a farm background, mainly near Marcus in northwest Iowa, raised $32 million to construct a biodiesel plant on 35 acres near the Little Sioux Corn Processors ethanol plant located at Marcus.

SoyEnergy LLC general Manager Rick Davis shows where both the raw and finished product for the manufacture of biodiesel will be stored. Since acquiring the Mason City facility, another 500,000 gallons of storage was built at the plant, said Davis.

Construction of the plant began, but stopped when financing fell through due to a lack of participation.

When this happened, Davis said investors “stepped back and looked at their decisions.”

They identified two areas of importance in running a successful biodiesel plant. One was risk management and the other was having multiple sources for biodiesel “using multiple feed stocks” said Davis.

During this time the investors started looking at the idled biodiesel plant near Mason City.

One of the advantages planners saw in the facility was its approximity to Interstates 35 and 90, the Avenue of the Saints, and its rail service.

The investors purchased the Mason City facility and, since acquisition, have spent an additional $10 million to make it a generation 2 biodiesel facility.

As a generation 2 biodiesel plant, Davis said, SoyEnergy LLC “can refine biodiesel from crude soybean oil, refined soybean oil, canola oil and damaged corn oil creating 90,000 gallons of biodiesel each day.”

SoyEnergy LLC’s office opened last November, overseeing construction upgrades during the winter.

Newsletters published by SoyEnergy said many of the employees of Freedom Fuels would be rehired by SoyEnergy.

An ethanol plant with an annual capacity of 110 million gallons will generate 2.5 to 3 million gallons of corn oil. SoyEnergy will purchase corn oil from ethanol plants within 250 miles of the Mason City plant, Davis said.

The mix of feed stock sources of oil from soybeans, corn and canola will depend on the market prices of them.

“When soybean oil is cheap, we will buy soybean oil,” said Davis.

SoyEnergy’s risk management program includes the use of an outside marketer for its products rather than selling its biodiesel on its own.

SoyEnergy contacted RPMG, a marketer of ethanol and biodiesel, to handle the sales and payment of its biodiesel.

Davis described RPMG as financially “a real strong company,” thereby reducing SoyEnergy LLC’s risk in the marketplace.

Contact Clayton Rye at crye@wctatel.net.

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