Grainnet

REG to Expand Biodiesel Production to 640 Million Gallons by 2009 and Co-Locate Several Facilities with Bunge

By Susan Reidy, BioFuels Journal editor

Renewable Energy Group, Inc. (REG), Ralston, IA announced Monday, Aug. 14, new strategic partners and the completion of $100 million in financing to expand its biodiesel production to 640 million gallons at 15 facilities by 2009.

Strategic partners included Bunge North America, St. Louis, MO, a vertically integrated food and feed ingredient company and London-based ED&F Man Holdings Ltd., a major trader of fats and oils.

Other investors included Natural Gas Partners VIII, L.P., the Sargents, West Central Cooperative, and two LLC investment groups that include farmers and producers in Iowa.

As part of the partnership, Bunge will supply raw material, risk management, and logistics expertise for the planned biodiesel facilities.

Several of the plants will be co-located with Bunge oilseed processing facilities.

“It’s an exciting day for renewable fuels, an exciting day for our company, and an exciting day for Iowa,” said REG Chairman and CEO Jeff Stroburg during the Monday news conference.

REG plans to build 15 biodiesel plants over the next three years, said Nile Ramsbottom, REG president and CFO. All plants will be BQ-9000 Accredited.

The first facility under the new strategic partnership will be built in Cairo, IL and will be co-located with a Bunge facility. Five of the facilities will be built in Iowa at locations yet to be decided.

REG currently owns or manages three biodiesel plants: West Central Cooperative, Ralston; Western Iowa Energy, Wall Lake, IA; and SoyMor, Glenville, MN.

The company will own three, possibly four, of the new plants and manage the rest.

Iowa Gov. Tom Vilsack and National Biodiesel Board President Joe Jobe attended the news conference in Des Moines.

“This is another indication of Iowa’s leadership in renewable fuels,” Vilsack said.

“This is also important for our nation. We need to eliminate our dependence on foreign oil supplies.”

Partnering Benefits

REG said partnering with Bunge and ED&F ensures a dedicated supply of various raw materials, site locations, risk management, and logistics expertise that will allow the company to expand biodiesel production to meet the demands of large customers nationwide.

“As Renewable Energy Group grows, these agreements provide us an opportunity to meet the needs of current and future customers on a larger scale than ever before with greater economies of scale,” said Stroburg.

“Producing high quality biodiesel is only the first step; getting biodiesel to our customers when and where they need it is a key factor in creating a successful distribution channel.”