Golden Grain Energy LLC, an ethanol plant in Mason City, Iowa, began construction in late April to double its nameplate capacity from 40 MMgy to 80 MMgy. However, post-expansion production is expected to exceed 80 MMgy, according to Walter Wendland, company president and CEO.
"We've done a lot to increase our production above nameplate already," Wendland said, intimating the benefits of the incremental production increases his company made over the past two years. Golden Grain Energy recently received a Title V permit to produce up to 150 MMgy of ethanol at its Mason City site.
Production will continue as Fagen Inc., the design-build team expanding the original Fagen/ICM Inc. plant, continues work through spring 2007. Production will follow in early summer.
As of late May—a month after the expansion began—Wendland said the new grain bin foundations were complete, and the erection crew was ready to take it from there. "Fagen is mobilizing on-site, and the fermentor foundations are being poured," he told EPM.
The $46 million expansion is being funded not with an equity drive, but with retained earnings and bank financing. "We were able to save all the costs associated with doing an equity drive and keep the dilution of shares to an absolute minimum," said David Sovereign, Golden Grain Energy board chairman. "Our owners will own the same percentage of a company that has more than twice its previous capacity and earning potential." Golden Grain Energy has more than 750 owner-members. Wendland said the cost of an equity drive would have been around $300,000. The profitability of ethanol in the current U.S. marketplace with high ethanol prices and the relatively low cost of corn—along with Golden Grain Energy's own success in making a profit—allowed for this avenue of financing to be utilized for the expansion.
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