Alchem sells for under $600,000 at auction

By Holly Jessen | September 23, 2010
Posted Sept. 29, 2010

Jim Borchart, owner of Borchart Steel Inc., is now the owner of the Alchem ethanol plant in Grafton, N.D. His $525,000 bid at auction Sept. 29 plus a 10 percent buyer's premium puts the final purchase price at $577,500.

It's still unclear what Borchart will do with the 10.5 MMgy plant, which has been sitting idle for years. He intends to winterize it and make a final decision this March or April, he said. One possible option is that he will sell off the equipment, piece by piece. Or, he'll modernize and streamline the plant and then restart it. "It doesn't have a good flow pattern right now," he said.

Still, even if the New Germany, Minn., resident goes with option No. 2, it's not a slam dunk that the Alchem plant will once again produce ethanol. He expressed some interest in cellulosic ethanol from energy beets and beet tops. However, the most "realistic" option may be other products, he said, such as biochemicals, pharmaceuticals or agricultural products, such as fertilizer.

Although Scott Steffes, president of Steffes Auctioneers Inc., was concerned nobody would turn up for the auction at all, there were seven registered bidders and more than 30 people in attendance. "I'm glad we got it sold and surprised at the realistic price," he said.

Harold Newman, former owner of the plant, was there. He was quiet during the bidding and left quickly. Also at the auction was Grafton resident Lee Anderson, who started work at the plant in November 1985 and in recent years stayed on as plant security. That involved checking on the plant at a variety of times of day, he told EPM. Sometimes people would stop by the plant to discuss the latest rumors about whether the plant would sell and he'd talk to them and answer their questions. "Some days I was here eight hours, some days four hours," he said.

The plant started out as a potato flake plant and began producing 3.5 MMgy of fuel ethanol in 1983. The capacity was up to 10.5 MMgy in 2007, but the plant was only producing 8.5 MMgy. By October 2007 it had shut down due to the high cost of corn and low price of ethanol.

Millions of dollars in plant upgrades were made after the shutdown, including an automation system for the coal-fired boilers and a steam generating system. It has a thermal oxidizer system that has never been operated, a methonator system, a CO2 scrubber and other items.

The plant was sold with no minimum bid and "as is and where is," Steffes reminded attendees before the auction started. "The only thing you are being guaranteed is free and clear title," he said.