October 19, 2007- The Messenger

VeraSun Will Invest $30 Million

Corn oil extraction project in Fort Dodge will be first of its kind in the ethanol industry
By BILL SHEA, Messenger staff writer

A revolutionary corn oil process will likely be launched at the VeraSun Fort Dodge ethanol plant, creating 14 new jobs and a $30 million investment in machinery.

The oil would be removed from dried distillers grains, a byproduct of making ethanol, to create both a very high protein feed for livestock and a basic ingredient for biodiesel.

The project would be the first of its kind in the ethanol industry, according to company officials.

‘‘I think we are looking at getting really two fuels from that same kernel of corn,’’ said Keith Bruinsman, vice president for corporate development for South Dakota-based VeraSun. ‘‘We’re really adding value to that corn.’’

Bruinsman said the company is ‘‘still early in the process’’ of exploring corn oil extraction. He said the focus is now on starting the procedure at its ethanol plant in Aurora, S.D. He couldn’t predict when it might be implemented in Fort Dodge.

The project would create 14 jobs paying an average starting wage of $16.60 per hour. There are currently 69 employees at the plant west of Fort Dodge.

Also, the project would require a $30 million investment in processing machinery.

On Wednesday, the Iowa Economic Development Board awarded incentives for the project. The company received $200,000 from the Value Added Agricultural Products and Processes Financial Assistance Program.

Half of that total is a no-interest loan repayable over five years. The other half is a forgivable loan that VeraSun won’t have to pay back if it creates the 14 jobs.

It also received an estimated $1,154,875 worth of tax benefits from the High Quality Jobs Creation Program. That includes a 4 percent credit against the company’s state income tax and a refund of all sales and use taxes paid during construction.

Bruinsman described the application for state aid as ‘‘just the first step’’ in a decision-making process.

Local leaders, however, are already excited about the potential expansion.

‘‘This is a great opportunity for the citizens of Webster County and we as a board look forward to doing business with VeraSun,’’ said Webster County Supervisor Kim Motl. ‘‘We’re very committed to growing that ag industrial park.’’

Motl said the county and Fort Dodge governments worked as a team with the Development Corporation of Fort Dodge and Webster County to help VeraSun.

‘‘It’s going to be great,’’ said Webster County Supervisor Keith Dencklau. ‘‘I think it will help Webster County tremendously.’’

Dencklau and Motl both said the county will not have to build any new roads to support an expansion of the plant.

‘‘I think the county has done an excellent job of working with the company as well as the Development Corporation of Fort Dodge and Webster County,’’ said Dennis Plautz, the city’s director of business affairs and community growth. ‘‘This just shows the value of the partnerships that were created earlier and continue to be fostered.’’

John Kramer, president of the development corporation, described VeraSun as ‘‘fantastic to work with.’’

The VeraSun Fort Dodge plant began production in the fall of 2005. It makes 110 million gallons of ethanol a year.

It also produces about 350,000 tons of dried distillers grains each year. Those grains are a yellow powdery substance that’s a high protein feed for livestock. They’re also the basis for the potential expansion.

Bruinsman said the company is looking at using some new technology to extract corn oil from the dried distillers grains. The result of that process would be an animal feed that’s even higher in protein, and corn oil, he said. The oil, he said, would probably be sold to a biodiesel producer.