Gevo plans another corn ethanol plant retrofit
Redfield Energy LLC, a 50 MMgy ethanol facility in South Dakota, is looking to modify its facility to a second-generation biorefinery, and Tom Hitchcock, CEO, has plans to perform the upgrade with Gevo Development LLC. The two companies have entered into a joint venture transaction, allowing Gevo to retrofit the facility for use in isobutanol production.
On the announcement, Patrick Gruber, Gevo CEO, said that the newly formed joint venture “demonstrates the attractiveness” of Gevo’s joint venture model. The Colorado-based company has shown how the model works already with another ethanol group in Luverne, Minn., where Gevo is also retrofitting a plant for isobutanol production. “Redfield is an exceptionally well-run and profitable plant,” Gruber said. “We appreciate the vision and leadership of the Redfield board and its cooperative membership and look forward to working with them on this business.”
The dry-mill facility is two miles north of the city of Redfield and has been in operation since 2007. In one year the facility can process roughly 18 million bushels of corn into ethanol while producing nearly 160,000 tons of wet and dried distillers grains. But, according to Hitchcock, that is not enough for the Redfield Energy team. “Isobutanol provides an excellent opportunity to expand our potential markets, improve our profit margins and create a more predictable and sustainable business,” Hitchcock said. “We are very happy to be working with Gevo to upgrade our facility to a second-generation biorefinery.”
Under the joint venture agreement, Gevo will supply the isobutanol technology and the necessary capital to perform the retrofit. In return, Gevo will be given an equity interest in the facility. The retrofit will begin soon, starting at the end of the year, with commercial production of isobutanol planned for the end of 2012. While the Redfield facility is just the second plant that Gevo has partnered with, the company said by 2013 110 MMgy of isobutanol capacity will be online. The Redfield and Luverne facilities will account for roughly 60 MMgy.
Gevo’s isobutanol production process is based on two elements. The first is biocatalyst yeast that convert various feedstocks into isobutanol. The second element of its process strategy uses a bolt-on separation unit. Gevo has signed with ICM Inc. to perform all North American retrofit jobs. In February, the company filed for an IPO worth roughly $95.7 million, pricing the stock at $15 per share.