Central Bio-Energy Plans $500M Investment for Three 100M Gallon Corn Ethanol Plants
18 November 2006
Central Bio-Energy, LLC (CBE), a Nebraska-based firm, plans to invest more than $500 million to build three 100-million-gallon-per-year corn ethanol plants in Seward, Howard and Chase counties in Nebraska.
This investment will make CBE one of the leading ethanol producers in Nebraska, officials said. Projected annual revenues, when all three plants are operational, will approach $600 million.
Each plant will need about 40 million bushels of corn per year for feedstock, or 120 million bushels in total. CBE will also sell distillers’ grains, the after-product of its ethanol plants to local cattle feeders.
CBE has signed Plant Development Agreements (PDAs) with Delta-T Corporation for the engineering and technology design for all three plants.
CBE is negotiating with Tenaska BioFuels, LLC, which provides marketing, physical delivery and financial services to customers in the ethanol and biodiesel industries, to provide various consulting, supply and marketing services to CBE for their ethanol facilities.
Construction of the first plant near St. Paul in Howard County is scheduled to begin later this year, and is expected to be completed in the first quarter of 2008. The second plant, scheduled to begin construction in the spring of 2007, will be built near Utica in Seward County and is expected to be operational by the summer of 2008. The third plant, to be built near Imperial in Chase County, will break ground in the spring of 2007 and is expected to be completed in the summer of 2008.
CBE plans to contract with ConAgra Trade Group Inc. for grain procurement, ethanol, distiller’s grain marketing and commodity risk management services.
In its recent commentary on the expansion of corn-ethanol production (earlier post), the Council for Agricultural Science and Technology noted:
Fuel ethanol production is a commodity business with little opportunity for product differentiation, which means a plant must be a low-cost producer to survive low-price periods. Many new Midwestern plants have annual capacities of 100 million gallons or more to take advantage of economies of scale.
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