American Ag Fuels plans plant upgrade to 6 MMgy

By | December 01, 2005
From day one, Defiance, Ohio-based American Ag Fuels planned on expanding its operation. It appears the company is sticking to its word.

On July 1, American Ag Fuels completed phase one of its construction process and came on line with an initial capacity of 1 MMgy. By early November, the plant had produced 100,000 gallons of B100-a key milestone for the company-and was moving ahead with a second round of construction. The second phase of building will expand the plant's production capacity to 6 MMgy and is expected to get underway soon. "We are finalizing some decisions about the expansion and expect to begin shortly," American Ag Fuels CEO Steve Lankenau said.

Besides more than tripling the plant's production capacity, the upsizing will make the plant somewhat unique by adding a second process technology. Currently the plant uses a batch system. When the expansion is complete, American Ag Fuels will be able to produce biodiesel from both batch and continuous systems. "It was a conscious decision", Lankenau said about using two process systems. "We wanted to have the ability to supply those who just want soy-based biodiesel as well as supply a biodiesel product that is lower in cost [and] derived from other feedstocks." Another reason American Ag Fuels went with the dual process system was for the sake of profitability. "By using two systems, we were able to get into production quicker and started generating cash flow," Lankenau said. "It will also allow us to stay in production while one (system) is down."

American Ag Fuels wants to stay competitive with the local petroleum diesel markets. According to Lankenau, the company will tag its biodiesel rack price at the same price as the local petroleum rack price. "In the end, we want users to get the product in their tank at the same price [as diesel]-day in and day out," Lankenau said.

The final construction cost has not been determined due to some final unresolved details. Lankenau is confident that the expansion and upsizing will be completed, and the plant operational, by mid-2006.
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