June 29, 2006

 

Idaho's sole ethanol plant to open this year, more coming up

 

 

British company ED&F Man Alcohol Inc has reached an agreement with J.R. Simplot Company to reopen an ethanol processing plant in Caldwell, in the US state of Idaho.

 

ED&F Man Alcohol Inc, a subsidiary of London-based ED&F Man Holdings Ltd would lease the plant from Simplot, which had operated the plant until its closure in October 2004.

 

The plant is expected to open in late 2006, with markets in Idaho and Oregon.

 

This would be Idaho's only operating ethanol plant, although a number of larger ethanol projects may be on the way.

 

Tony Watts, chief financial officer of ED&F Man Alcohol, said the plant would initially produce about 5 million gallons annually with production to be tripled to 15 million gallons by mid-2007.

 

The plant was chosen because it had been a functional plant and its size offers a relatively low-risk way for the company to enter the ethanol market, Watts said.

 

The company is cautious as there may be an oversupply of ethanol in 2008, however it is confident it would have enough buyers, Watts said.

 

ED&F has been marketing ethanol since the early 1990s, but this is its first venture into producing it.

 

The Caldwell plant was one of two plants that Simplot had operated in Idaho. Both plants were closed due to the lack of feedstock.

 

To address the problem, Watts said ED&F Man would upgrade the plant so it can use both potato waste and corn as a feedstock. When Simplot operated the plant, it processed only potato waste.

 

Simplot would provide the plant with potato waste and corn, with the former coming from Caldwell processing operations and the latter from excess feed brought in from feedlots.

 

The agreement also calls for both companies to market byproducts from the plant, such as distilled grain, to area feedlots and dairies.

 

Iogen Corp, a Canada company, is proposing what could be the largest ethanol project in the State. The company announced plans this year for a US$300 million plant that would use straw to produce up to 60 million gallons of ethanol annually.