AGP to acquire distressed biodiesel asset in Iowa

By Bryan Sims | June 17, 2011

Agribusiness cooperative and biodiesel producer Ag Processing Inc. has signed a letter of intent to acquire an idled biodiesel plant in Algona, Iowa. The 60 MMgy facility has sat mostly dormant since its original developer, East Fork Biodiesel LLC, opened the facility back in 2007.

According to Mike Maranell, AGP’s senior vice president of corporate and member releations, AGP hopes to recruit potential employees in the Algona area to help revive the distressed asset into an operating biodiesel facility by September 1. “One of the hurdles that we need to cross is to figure out how to staff that plant," Maranell told Biodiesel Magazine.

Headquartered in Omaha, Neb., AGP will acquire the Algona plant from its previous owner, Enervation Advisors LLC, a distressed-asset buyers group based in New York, which acquired the plant in March. Enervation founder Paul Tantillo told Biodiesel Magazine that the company originally intended to make technological upgrades shortly after acquiring the facility in order to bring the plant up to desired specifications, but instead relinquished all contracts for those plans.

“We looked at other plants and we decided to go another direction,” Tantillo said.

Investors formed East Fork Biodiesel LLC in January 2006 with the goal of capitalizing on the then-booming biodiesel industry. But, since it started up in 2007, the plant had produced nominal volumes of biodiesel, about 1 million gallons worth, mainly for testing and commissioning purposes.

AGP has deep roots in the biodiesel industry having built the country’s first soy-based biodiesel production facility in 1996, a 30 MMgy plant currently operating in Sergeant Bluff, Iowa. The cooperative also owns and operates a 30 MMgy production plant in St. Joseph, Mo. The acquisition of the Algona plant would bring AGP’s combined biodiesel production capacity to 120 MMgy.

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