A company formed out of a Ralston grain terminal in west-central Iowa to build bio-diesel plants announced plans for a major expansion Monday. Renewable Energy Group C-E-O, Jeff Stroburg, says the company has secured 100-million dollars in financing. Stroburg says the company will move from plans to build five to no build 15 plants to produce bio-diesel — a fuel made from soybeans and diesel fuel.
Stroburg says the financing will let them continue to be a “dominant player” in the bio-diesel industry. Stroburg says R-E-G is partnering with Bunge an ag commodities supplier in St. Louis, Missouri along with Todd and Sargent, an Ames, Iowa construction and engineering company. Stroberg says they’ve also partnered with and investment company, but will also get a substantial investment from Iowans.
Stroburg says much of the 100-million dollars comes from Iowa investors and he says the company will be primarily owned by Iowa investors. Stroburg says they created two limited liability companies that each include some 250 investors — with about 150 of the investors in each being from Iowa. Stroburg says the range of investment is from 25-thousand dollars on up, with the 30-million gallon plants being built in Iowa costing about 40-million dollars.
Stroburg says five of the plants will be located in Iowa. He was asked how many bushels of soybeans the plants will use and says they’ll need enough to eventually produce 640-million gallons of bio-diesel. He says you can make about a gallon and a half of bio-diesel for each bushel of soybeans — so that would be about 400-million bushels of beans. Stroburg says they’re also working on expanding the distribution network for bio-diesel.
Stroburg says they’re growing their railcar fleet and are also working directly with the petroleum industry to use the infrastructure they have in place. He says they have agreements with 17 or 18 petroleum terminals. Stroburg says the expansion of the bio-diesel plants should be good news when it comes to the cost of feed for livestock producers. He says unfortunately for his company, the additional protein meal coming out of the plants will likely push the price of the meal down.
Governor Tom Vilsack was on hand for the announcement and touted the economic benefits to the state. Vilsack says the announcement assures the state the five plants planned for construction in Iowa will proceed, which Vilsack says will ensure that Iowa becomes the number one renewable fuel producer.
Vilsack says the expansion will have an impact beyond agriculture. Vilsack says the consolidation of the company and the location of its corporate offices in Iowa will mean more jobs in construction, processing, and more opportunities for Iowa’s farmers. R-E-G says it will create a total of 496 jobs by the time all 15 plants are running in 2010. R-E-G will also increase its staff in Ralston from 52 to 82 by 2009.