Canadian company to acquire Alabama biodiesel asset

By Bryan Sims | February 15, 2011

Regina, Saskatchewan-based Clean Power Concepts Inc. signed a letter of intent to acquire the assets of Alabama Bio Energy LLC and its subsidiary, Eagle BioDiesel Inc., which owns and operates a 36.5 MMgy multifeedstock biodiesel facility in Bridgeport, Ala. The transaction is expected to close March 15.

The acquisition of the Bridgeport facility brings Clean Power Concepts’ combined annual production capacity to 41.8 MMgy. CPC’s subsidiary, General Bio Energy Inc., owns and operates a 20 MMly (5.3 MMgy) canola-based facility in Regina, Saskatchewan. Once CPC becomes the sole owner of the Bridgeport facility, CPC CEO Michael Shenher said that the company plans to bring it to its maximum nameplate production capacity by leveraging existing process technology with plans to potentially install its own proprietary equipment in the future.

“We think we can enhance the [existing] processes [at the Bridgeport plant],” Shenher told Biodiesel Magazine, adding that he couldn’t elaborate on the specific nature of CPC’s process technology. “The technology that we have we think will enable us to really make the most of the capacity that’s there as well as significantly increase it in the near future.”

Shenher added that CPC found the Bridgeport facility to be an enticing acquisition target due to its existing transport infrastructure for inbound and outbound product. “We think that logistically it’s an excellent spot to serve the domestic market in that area,” Shenher said. “We’re currently reviewing some export options as well.”

This move is the first of more potential acquisitions of biodiesel assets in the future for CPC, according to Shenher. “We have something that many biodiesel start-up companies don’t have, and that is access to feedstock by virtue of our canola crush program and our oilseed crushing capacity,” he said. “We can also offer liquidity to our partners. We’re actively looking for acquisitions and working with potential targets and partners.”

Use of existing feedstock streams at the Bridgeport facility is under consideration, according to Shenher, but he noted that “the existing infrastructure there would lend itself well to some sort of oilseed crush program.”

With the $1 per gallon blender’s tax credit reinstated for all of 2011 and a rebounding economy, Shenher said the time may be right now to acquire distressed biodiesel assets.

“It’s sort of the perfect storm in terms of the price of crude and the [economic] recovery is up,” he said. “We’re thinking that there might just be a margin there that would enable production of biodiesel from virgin vegetable oil. Also, we’re seeing very strong demand in parts of South America, the Caribbean and definitely in Asia.”

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