Advanced BioEnergy nets Indiana project

By EPM Associate Editor Jessica Williams | May 01, 2006
Advanced BioEnergy LLC announced May 17 the acquisition of Indiana Renewable Fuels (IRF) in Rochester, Ind. IRF plans to build a 100 MMgy ethanol plant in Rochester; in the meantime, Advanced BioEnergy has already started construction on a 100 MMgy ethanol plant near Fairmont, Neb.

Fagen Inc. will build both corn-fed plants using ICM Inc. process technology. The Fairmont facility is slated to come on line in 2007. IRF, which will become a wholly owned subsidiary of Advanced BioEnergy but retain its name for now, plans to start site preparation this fall, followed by full construction in 2007. The company was negotiating with ethanol and distillers grains marketers at press time, according to Revis Stephenson, chairman and CEO of Advanced BioEnergy.

Stephenson said the IRF acquisition is the company's first, and it typifies an approach to company growth that combines sound business fundamentals with local community involvement. "As a company, one of our core values is to engage local people in the leadership of the ethanol plants we develop," Stephenson said. "One of the greatest benefits of ethanol production is its economic impact on rural communities, and we want to ensure that the communities are involved in the development, management and rewards of the plant."

Glen Bode, president of Indiana Renewable Fuels, said this opportunity for continued local involvement was key to the agreement. "One important objective of IRF is to create economic opportunity for the local area, and provide the community and its citizens with a way to get involved in the ethanol industry," Bode said. "Advanced BioEnergy places a high value on local involvement and leadership, so we believe this is a great fit for Indiana Renewable Fuels." Bode added that the IRF board of directors will be comprised of seven original IRF board members and two from Advanced BioEnergy.

The site for the proposed Rochester facility—to be built by IRF—is near a large landfill operated by Allied Waste Industries, which IRF believes will provide methane gas to power the plant. By using the landfill gas for direct use at its ethanol plant, IRF would expect to utilize a renewable fuel that would otherwise not be recovered for beneficial use.

Stephenson said future acquisitions, such as the IRF project, are fundamental to the company's growth plan. "We intend to establish a multi-plant presence across the United States in order to ensure access to a variety of markets for ethanol and coproducts, capitalize on transportation and logistics advantages, and reduce the impact of drought or disease in one part of the country that could affect feedstock supply," he said. "We're planning to take a comprehensive and geographically diverse approach to ethanol production while keeping our commitment to the local communities in which these plants operate."

Organized in early 2005, Advanced BioEnergy closed an equity financing round in March, raising $60 million. The funds will be used to build the Fairmont site and fund development opportunities similar to the IRF acquisition.