Former Riksch Biofuels plant up for auction in Iowa

By Bryan Sims | March 03, 2011

After nearly two years of being idled, the former Riksch Biofuels plant in Crawfordsville, Iowa, is on the auction block. Rochester, Minn.-based Maas Companies will put the 9 MMgy multifeedstock biodiesel refinery up for auction April 12 at 11 a.m. CDT, on-site at 3184 320th St., Crawfordsville. 

According to Brad Ray, vice president of Monmouth, Ill.-based Midwest Bank of Western Illinois, one of the plant’s primary creditors that provided funding during inception of the project, construction finished in 2006 and later produced ASTM-spec soy oil-based biodiesel in late 2007. Then, in the first quarter of 2008, the facility transitioned from primarily using soy oil as feedstock to animal fats, but then struggled to remain operating that year as cost overruns to retrofit equipment caused intermittent production of biodiesel. By June 2009, working capital ran dry and the plant hadn’t restarted since.

“[Riksch Biofuels] felt they had a unique business plan where they had a plant with a capacity of 9 to 10 MMgy and felt that their capital investment into it was considerably less than some plants of similar size,” Ray told Biodiesel Magazine.

The plant, in its entirety, is available for purchase prior to auction, including the real estate and all equipment. Potential buyers are encouraged to explore this option in a timely manner and submit bids prior to March 22. After that date, the plant will be sold piecemeal at the scheduled auction in April. Among the assets for sale include: real estate, biodiesel process machinery and equipment, interior bulk oil storage tanks, pellet racking, lab equipment and 50 lots of miscellaneous equipment.

According to Allison Guyton, director of operations for Maas Companies, the plant is well-equipped to remain a biodiesel facility or, because of the existing indoor tank farm and loading access at the site, a potential buyer could repurpose it into a fuel or oil distribution/storage facility.

“We feel with the increasing gas prices and the federal subsidies back in place, this is an excellent time to invest in green energy,” Guyton said.

According to Ray, outstanding debt wouldn’t be attached to the purchaser of the plant; however, an amount of capital investment may be required to retrofit equipment if the winning bidder chooses to use lower grade waste feedstock like yellow grease or used cooking oils. Pittsburgh-based Capital Technologies Inc., no longer in business, was the original process technology provider for the plant.

“We’re just looking for an outright sale of the plant,” Ray said. “If somebody buys it to keep it all together and use it as an operating biodiesel plant, then there’s probably going to be a significant capital investment they’ll need to get the equipment the way they want it, depending on the type of feedstock they want to use.”

Ray added, “Even though the plant wasn’t originally designed to run on animal fats, soy oil would probably be well-suited with the type of existing equipment installed. But, the economics of soy oil hasn’t improved either since the plant shut down.”

Equipment buyers will have the option of bidding onsite or live via the Internet. Real estate buyers are required to attend the sale. The real estate tract includes 20,000 square feet, including an 11,200 square-foot feedstock and product storage building, a 6,400 square-foot biodiesel process area and a 2,400 square-foot administrative building on 14 acres. Details of the sale are available at the auction website (www.maascompanies.com) or by contacting Maas directly at (507) 285-1444. 

 
 
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