A British biotech company on Tuesday finalized the purchase of a central Minnesota ethanol plant that it will modify to produce chemicals, rather than fuel, from corn.
The deal marks the second time that one of Minnesota's approximately 20 ethanol plants will be changed to produce higher-value alcohols.
Green Biologics Ltd. is buying Central MN Ethanol Co-op in Little Falls from its member owners. Terms weren't disclosed, but Green Biologics executives said the company will spend $60 million to $70 million on the deal and refurbishment of the plant, which now produces about 21 million gallons of ethanol annually.
The plant, which will be renamed Central MN Renewables, will continue making ethanol next year as construction crews add new equipment. Its staffing level will remain unchanged.
When the construction is done in early 2016, instead of mixing corn with yeast to produce ethanol, Green Biologics will mix corn with other bacteria to produce normal butanol, also called n-butanol, and acetone. They are ingredients in paints, adhesives, cosmetics and other products.
"One of the reasons why Central MN Ethanol Co-op was very attractive is we can do all of the repurposing while we're producing ethanol," said Joel Stone, chief executive of the Ohio-based U.S. unit of Green Biologics.
With the changeover is complete, Central MN Renewables will be one of the first producers of renewable chemicals in the state. Such chemicals are produced from agriculture and forestry materials rather than oil and its byproducts.
To encourage the industry's development, Minnesota lawmakers next year will consider a bill to create production incentives similar to those that were in place at the start of the ethanol industry. Green Biologics earlier this year received a $500,000 grant from the state agriculture department for its work to develop new uses for Minnesota corn.
