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Al-Corn Expansion on-Budget, Under-Schedule, CEO Says

  • Tuesday, 12 September 2017 11:28

Owatonna People's Press

September 7, 2017

By William Morris

Al-Corn Clean Fuel is ahead of schedule on the major expansion of its Claremont ethanol plant, and approaching a final decision as well on whether to remain a farmer-owned cooperative or switch to a different type of legal organization.

The plant broke ground last year on a $146 million expansion project that, when completed, will more than double the plant’s capacity from 50 million to 120 million gallons of ethanol per year. The project originally was slated for completed next July, but now, CEO Randy Doyal said, they’re anticipating wrapping up work in March or April.

“They do a really good job of [project management],” Doyal said of general contractor McGough Construction. “They work really well with our engineering firm, KFI, also out of the Cities. This is very much a Minnesota project. That’s pretty cool.”

On a tour around the property, Doyal can point out numerous new features under construction: a retention pond that will ensure the project releases even less runoff after completion than when it was farmland; a massive rail loop to the west of the plant, large enough for three 110-car trains to load or offload; the 300-ton and 550-ton cranes, and in particular three giant concrete silos and grinder units erected in one non-stop 90-hour pour, Doyal said.

“They form the steel and then start pouring the concrete. It’s a very slow pour, so the amount of concrete they’re using isn’t coming super fast,” Doyal said. “It’s a quick-setting concrete, and they pour it around in the ring, and do the next set of steel, the next set of concrete, and they’re lifting the ring about ¾ inch every 2 minutes. It’s one continuous pour.”

The project is right on budget as well, he said, and should remain that way short of some major equipment issue. And in August, the Environmental Protection Agency certified that the completed plant will produce ethanol with 22.4 percent fewer greenhouse gas emissions than equivalent gasoline energy, beating the 20 percent threshold needed to sell ethanol for domestic fuel production. And Doyal said the agency’s baseline figures are probably conservative.

“In real numbers, it would probably be 50 percent below gasoline,” he said.

Since its founding, Al-Corn has been a cooperative, required by law to receive at least 50 percent of the grain it processes from its members. The expansion was almost derailed in 2015, when shareholders rejected a vote to issue additional shares to cover the increased capacity for the expanded plant, and went forward with several question marks still remaining about how the plant would be supported.

The new plan, which Doyal said is currently awaiting voting from members, is to convert Al-Corn into a limited liability corporation, which would convert existing shares into ownership units and relieve owners of the obligation to supply corn each year.

“We’re waiting on the vote on that right now, but I’ve had a lot of members saying, ‘Thanks, this is exactly what I was looking for,’” Doyal said.

A big appeal of the LLC model is that it makes it easy for aging farmers, some of whom have been with the cooperative for 25 years, to pass on or dispose of their shares as they retire.

“They want something where it’s easier to get out, easier for estate planning, and I think the vote will be positive,” Doyal said.

Ballots for that vote are due back Sept. 19.

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