FAIRMONT - Green Plains Renewable Energy announced Tuesday that the ethanol producer is purchasing BioFuel Energy's two plants for $101 million and restarting the facility in Fairmont by the end of 2013.
The local plant has been shut down since September 2012, when BioFuel cited the high cost of corn, a widespread drought and an ethanol glut as reasons to idle operations until market conditions improved. Most of the workers were initially kept on staff, but in February, the plant cut 40 jobs.
Rather than foreclose on its two plants, one in Fairmont and the other in Nebraska, BioFuel transferred the deed for the plants to its lender group, which in turn is selling the sites to Green Plains.
The plan, according to a written statement from Green Plains, is to fund the $101 million purchase with about $77 million in term debt and the balance in cash. The transaction is expected to close in the fourth quarter of 2013, after which the company will work to restart the Fairmont plant.
The news of the purchase received a warm welcome at City Hall in Fairmont.
"Green Plains Energy is an excellent company, one of the largest ethanol producers in the country," said Mike Humpal, Fairmont's economic development director and city administrator. "And seeing as how our economy is based on agriculture, additional value-added ag business can only be a good thing."
Green Plains is the fourth-largest ethanol producer in North America. With the purchase of the two BioFuel facilities, the company will increase its production capacity by 28 percent, allowing it to make more than 1 billion gallons of ethanol, 2.9 million tons of distillers grain, and 230 million pounds of corn oil in a year.
"Our growth strategy remains focused on right location, right technology at the right price for ethanol production assets and this acquisition meets all three criteria," said Todd Becker, Green Plains president and CEO, in a written statement. "We have become very proficient in operating multiple process technologies and adding these two ethanol plants continues to drive greater economies of scale in our marketing, risk management and back office operations."