Full steam ahead

Full steam ahead
They came from near and far, but all 3,400-plus subscriptions in the recent Glacial Lakes Energy (GLE) ethanol offering came from South Dakota. GLE officially closed their equity offering on Aug. 29, raising $95 million during their three-day investment meeting run.

� "It went incredibly well," said Tom Branhan, CEO of GLE, of his cooperative's success in raising the necessary capital to build two new South Dakota ethanol plants and expand the current Watertown-based GLE to 100 million gallons per year (mgy). "We have over 3,400 investment subscriptions following our three-day equity drive. We took the risk that South Dakotanswould support us and they came through."

The minimum investment in South Dakota's latest ethanol opportunity was $10,000 and with that minimum, participants are invested in the following:

  • a new 100 mgy plant in Aberdeen;
  • a new 50 mgy plant near Vermillion; and
  • the expansion of GLE in Watertown to 100 mgy.

    � Thousands showed up for the first equity meeting Aug. 22 in Watertown and the momentum continued through Friday. Branhan said that every qualified subscriber who had their application and money submitted by 5 p.m. on Friday, Aug. 25, was accepted.

    "The fact that we set the minimum at $10,000, made it possible for nearly anyone who wanted to get in. We got investors that maybe would not have been able to invest at a higher level," said Branhan. "Without knowing all the percentages, I would say the majority went with the minimum investment."

    � Being a cooperative organization, GLE prides itself on maintaining a South Dakota-owned identity.

    "We had the mentality of these being corn-grower invested, South Dakota-invested ethanol plants," said Branhan. "We could have reached outside of South Dakota for investors or set the minimum higher but we saw this as a great opportunity for the 3,400 South Dakota investors who are now invested in these plants. We're proud that we made that happen in South Dakota."

    Dirt work is set for this fall on the Aberdeen plant with Fagen, Inc. mobilizing for construction in early 2007. The plant is expected to be under construction for an estimated 14 to 18 months with start up in early-to-mid 2008. Dirt work is also scheduled to begin this fall on the Vermillion site with start up expected by early 2008.�GLE, which is wholly owned by the Glacial Lakes Corn Processors (GLCP) cooperative, will be the owner and manager in the new plants.

    An organizer for a proposed 50-million-gallon ethanol plant west of Meckling said an equity drive will likely reach its goal, paving the way for launching the project this fall.

    "The plant will get started in October doing dirt work, and actual construction will start sometime this winter. We plan to work all through the winter months," said Craig Johnson, a Vermillion farmer. "We are looking (to begin ethanol production) by the end of 2007 or in 2008."

    Johnson chaired Missouri Valley Renewable Energy (MVRE) before it merged with Watertown-based Glacial Lakes Energy. Johnson said he will soon become a member of the Glacial Lakes board of directors.

    Glacial Lakes Energy sought to sell up to $95 million of its common stock at $2 per share. Glacial Lakes closed its equity drive Tuesday, Aug. 29, meaning shares are no longer available for purchase.

    "Our (equity) meetings have been really successful. We were right at an estimated 800 to 850 people at our Vermillion meeting (Aug. 24)," Johnson said. "We were looking at raising between $65 million and $95 million."

    Investment priority was given to existing GLPC members and Aberdeen and Vermillion/Missouri Valley area residents, subject in all cases to GLCP's right to accept or reject any subscription in whole or in part for any reason.

    The construction of new ethanol plants is part of building the state economy, particularly in rural areas, Gov. Mike Rounds said last week.

    During a town hall meeting in Wagner, Rounds pointed to value-added agriculture as a key to creating more jobs and raising incomes. In turn, more jobs will attract more residents and bolster communities and schools, he said.

    "Grow your own economy, which is all part of our 2010 Initiative. That includes increasing our visitor spending and increasing the gross state product," the governor said.

    "The (Clay) county zoning board has approved a change from an agriculture to a heavy industrial site, and the Clay County Commission voted last week to approve the change of the permitting and zoning," Johnson said. "The site has all the permits and local and county approval."

    In addition, GLE and MVRE have secured the land option and received the results from a feasibility study.

    "We are all ready to go. We are getting the final engineering and design done on the plant," Johnson said.

    The Missouri Valley site contains the five crucial ingredients for an ethanol plant, he said. Those factors include a good supply of corn, a reliable supply of natural gas, access to rail service, a dependable supply of water and a good road system or infrastructure for delivering corn to the ethanol plant.

    While ethanol plants are springing up in South Dakota, including the southeast part of the state, Johnson said a feasibility study showed the region will produce the needed corn for the Missouri Valley plant.

    "Some corn will come out of Nebraska, but the majority will come out of southeast South Dakota," he said.

    The merger with Glacial Lakes Energy provided the needed resources – particularly management – to make the Meckling plant a reality, Johnson said.

    "Glacial Lakes Energy has a proven track record and is a leader in the industry," he said. "MVRE will benefit from GLE's resources, experienced team and leadership in the ethanol world."

    Johnson also credited the federal energy bill and renewable fuel standard, along with rising gas prices, as factors fueling the ethanol demand and construction of the MVRE plant.

    The new plant anticipates hiring 35 to 40 people, Johnson said. "There will be all types of people, from a chemistry background to an accounting background to a general background. There will be a variety of employment," he said.

    The MVRE plant will exert an economic effect before it even opens, Johnson predicted.

    "This will have a positive impact on all of southeast South Dakota. The construction period alone of 12 to 14 months will have people coming to work on the plant, with a lot of need for rooms and food. Locally, the construction period itself will have a big economic impact."

Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>