During the evening, Manager Rick Davis commented, "It has been a blessing that the board suspended the progress of the plant in order to take another look at the feasibility of it's success. If it had gone forth as the plans called for them, the plant would not be profitable and be shut down as others who don't have the latest technology."
Price of soybeans and the economy made it difficult to complete the financing. The board was able to raise $31,968,000 towards the construction of a 30 million gallon per year biodiesel plant. In July 2007, phrase one of construction (dirt work) began. By November 2007, the board wasn't able to complete raising the required amount of financing as the economy had changed. The board suspended operations to do further research.
The board spent much time researching and visiting other plants who used corn oil. Weekly meetings with potential lenders helped the board come up with a viable plan.
During this time, they reassessed various technologies to help them towards their goal. They believe Best Energy's technology was the option to pursue. It would allow the plant to use 100 percent of corn oil as feedstock as well as using vegetable oil, animal fat, or soybean oil. Best Energy will oversee the construction of and warranty the plant and process. They will also provide the Process Manager for the first year of production.
The size of the plant has been reduced from 30 to 15 million gallons of biodiesel a year. The explanation for reducing the size has to do with being able to easily finance for that capacity. The plant will be built in such a fashion, that it could easily be added onto to increase it to a 25 million gallon plant.. This reduces the debt load considerably to save on construction costs.It will take about 12 months to construct the proposed plant.
Soy Energy and Best Energy have discussed a multi-year corn oil contract. This will help Soy Energy obtain the margins needed to make the plant operate with a profit. The board already has contracts to sign with ethanol plants and others anxious to work with Soy Energy. Corn oil is a low cost feed stock, readily available to the plant and a long-term supply.
Best Energy has the chemical technology to remove the wax in the corn oil. Corn oil contains 10-15 percent free fatty acid which need an esterification unit to convert the free fatty acids into biodiesel. This is a big deal as Best is able to increase the efficiency of using corn oil as the plants' feedstock to 93 percent where other companies usually run from 75 to 80 percent. The plant will call for 7 1.2 million galllons of corn oil which needs to be contracted ahead of time.
It will take about a year to build the plant. The board announced that Fagen INC. will partner with Best to build the Soy Energy plant. Best Energy will provide training for the process manager at Cashton, Wisc. In addition, Best Energy is contributing around $5,000,000 to building the plant. The board believes Best Energy has defined their dedication to make this plant profitable. Soy Energy will have the newest technology which will aid Soy Energy into becoming a successful plant. The proposed cash flow plans works with the board being conservative with sale estimates and expense estimates high. It was estimated that in the first year, investors will receive an 18.3 percent return.
A vote was taken by all investors with a 95 percent approval to go forth with the new 15 million gallon plant. They now have the money, technology, and land to begin building.
Serving on the board: Chuck Sand as President; Ron Wetherell as vice president; Doug Lansink as secretary; Dallas Thompson as treasurer; Darrel Downs, Bob Engel, Carol Reuter, Daryl Haack, Steve Leavitt; Chuck Getting, and Dave Langel. Rick Davis is manager.