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Start-up biodiesel firm plans Illinois plant
BioCat Fuels hopes to raise $7 million to finance a plant that uses a process developed by EverCat Fuel.
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BioCat Fuels plans to raise $7 million through a private stock offering to buy or build a biodiesel plant in Illinois that will use a patented process to produce biodiesel fuel from waste oils.
BioCat, a start-up, would use technology developed by its sister company, EverCat Fuel, which has patented a process that converts waste fats and oils into clean biodiesel while consuming little energy and water and producing less waste. The planned 6 million-gallon-a-year Illinois plant is modeled after EverCat's plant in Isanti, Minn., which opened in September.
BioCat wants to demonstrate that EverCat's "Mcgyan" technology can economically produce biodiesel from non-edible substances, which the company says eventually will include oily forms of algae and weeds.
BioCat CEO Ric Larson, 63, is a former community banker who helped EverCat's owners finance the Isanti plant. Larson said the time is ripe because dozens of soybean-to-fuel oil plants were shuttered in 2008-09, thanks to the combination of heavy debt and soybean prices that went through the roof during the commodity-price boom. Yet demand is growing, partly because of government mandates to increase production of renewable fuels.
"We can use U.S. Small Business Administration [loan guarantees],'' Larson said. "It's tough to find a bank to lend, because there are too many bad biodiesel and ethanol loans on their books. Ironically, the survivors are doing well because corn and soybean prices are down.''
The Isanti plant was built after two years of a pilot project at SarTec, a 25-year-old farm-chemicals company owned by the McNeff family of Anoka County. Clayton McNeff, 40, the CEO of EverCat, is a chemist who worked with scientists at SarTec and his alma mater, Augsburg College, to produce the Mcgyan process, which uses a metal-oxide catalyst inside a stainless-steel pressure vessel to refine fuel in a low-energy, continuous-flow process. Raw materials include waste greases and fats that can be procured for less than $1 per gallon.
Clayton McNeff is chairman of the BioCat board. Larson said 21 other investors in BioCat have invested $20,000 to $350,000 in equity. McNeff Research Consultants sold BioCat a license to use the Mcgyan technology in return for 15 percent of profits and losses. Larson said BioCat expects to build or retrofit several biodiesel plants over the next several years.
Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com
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