“Bottom line—basically as it stands— there is an offer on the table, something has been presented, and it has to be decided upon,” said Doug Anderson, president of Platte Valley Fuel Ethanol. The offer was made in the midst of a current expansion project underway at the Central City plant. “We are basically doubling the size of the plant, and the expected completion is January 2007,” Anderson said.
Ron Fagen is the majority owner of Platte Valley Fuel Ethanol, and Fagen Inc. also has an interest in U.S. BioEnergy so this transaction may be seen as a consolidation maneuver. While the deal has not been finalized, “we fully anticipate that transaction to close by March 31,” said Kristi Lee, media relations coordinator for U.S. BioEnergy.
The expansion project at Platte Valley Fuel Ethanol was not begun in anticipation of the offer from one of the major ethanol marketing and production firms in the nation. “The plan to expand was in place long before this offer was made,” Anderson said. “U.S. Bio’s philosophy is basically to become a large entity within the industry.”
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Currently U.S. BioEnergy has two plants under construction—U.S. Bio Albert City, a 100 MMgy plant near Albert City, Iowa, scheduled to begin production in October; and U.S. Bio Woodbury, a 45 MMgy plant near Lake Odessa, Mich., scheduled to come on line in September. U.S. BioEnergy looks to acquire 100 percent ownership of Platte Valley Fuel Ethanol and also has negotiated a large share in Val-E Ethanol in Ord, Neb. This project has just started construction and is also a Fagen-designed plant. The current expansion projects underway for U.S. BioEnergy “will take us up to just over 250 million gallons by the end of 2006,” Lee said.
