Bufffalo Lake ethanol plant returns to production

Source: By DEE DEPASS , Star Tribune • Posted: Tuesday, September 16, 2014

A Buffalo Lake, Minn., ethanol plant has partly reopened after a long journey through bankruptcy court, closures and new owners.

With fresh capital and new equipment acquired by the latest owner — West Ventures LLC — Buffalo Lake Advanced Biofuels reopened several divisions of its ethanol plant last week with roughly 35 workers.

“We have stuck with it as we wanted nothing more than to keep the local people employed and the plant running,” Jed Latkin, an executive with West Ventures, a unit of the New York-based investment fund Platinum Partners, said in an e-mail.

Once fully operational, the plant is expected to produce 18 million gallons of ethanol a year.

“I am ecstatic,” said interim general manager Joe Winckler.

The plant’s reopening is the latest incarnation for an ethanol refinery that has faced multiple woes. Built in 1997, it soon doubled its production to 18 million gallons a year but still struggled to maintain a profit and closed in 2009.

It opened briefly in 2012 as Purified Renewable Energy with new management and investment by West Ventures. But Purified filed for bankruptcy in March 2013.

West Ventures, then a creditor, bought the plant out of bankruptcy court a year ago. It since has repaired equipment, gotten sections of the plant back online and even installed some new technologies.

“We are very excited,” said Chris Hettig, director of the Renville County Housing and Economic Development Authority. “This is one of the oldest ethanol plants in the state. As it’s gone through different owners, they have each added different technology to upgrade it. And they are doing things now in this plant that will help it be quite profitable. So we are very pleased this is happening. It’s reopening, coming on line and hiring people in our area.”

The trade journal Ethanol Producer Magazine reported that West Ventures recently installed new solids-separation technology at Buffalo Lake that processes corn into fuel with less need for large evaporators or centrifuges.

Buffalo Lake Mayor Joyce Nyhus lives just down the road from the plant and has watched the progress of its renovations from her kitchen window. In recent months and weeks, the plant installed a new scale, new grain bin, an arched storage unit and replaced an old massive evaporator unit. The company did not disclose its investments, but city officials believe it could be “multiples of millions,” Nyhus said. “It’s exciting. We are a very small town. We are just 733 people. So this is so cool.”

Buffalo Lake, about 100 miles west of the Twin Cities, is not alone in beefing up its biofuel capabilities. Minnesota has 21 ethanol plants. Of those, plants in Luverne, Lamberton and Little Falls have made or are considering upgrades and retrofits to produce an alternative alcohol called biobutanol, said Tim Rudnicki, executive director of the Minnesota Bio-Fuels Assocation.

The investments are happening as many ethanol makers report profitable refining margins — a turnaround after high corn prices in 2012 forced the closure of 20 ethanol factories nationwide.