Koch Industries’ energy arm to invest $50 million in Nebraska ethanol plant

Source: By Russell Hubbard, Omaha World Herald • Posted: Thursday, January 19, 2017

The renewable energy arm of conglomerate Koch Industries said Wednesday it has made another multimillion-dollar investment tied to Nebraska’s ethanol industry — this time related to fish and chicken farming.

Kansas-based Flint Hills Resources said it plans to invest more than $50 million in the ethanol plant it operates in Fairmont, about halfway between Lincoln and Hastings.

The new equipment will allow the plant to produce a high-protein fish and chicken feed from corn leftovers created by the motor-fuel distillation process. Making ethanol from corn creates such residual grains, mostly used for cattle feed.

But now, scientists with Flint Hills and Fairmont partner Fluid Quip Process Technologies are tweaking the leftover grains to maximize amino acid content to appeal to fish and poultry farmers who need high-protein rations for their operations. Markets will be domestic and export, Flint Hills says.

The export opportunities open up economic development prospects in central Nebraska from lifestyle changes thousands of miles away. In developing countries in the next 15 years or so, according to the United Nations, chicken consumption is forecast to rise more than tenfold. And fish farms — with their voracious appetites for high-protein feed — now account for about half of the seafood processed worldwide.

“Ethanol plants are an excellent production platform for a diverse variety of food, feed, fiber and fuel products,” said Todd Sneller, administrator of the Nebraska Ethanol Board. “The investment in feed product technology and production by Flint Hills Resources is another example of the opportunities for ethanol plants to diversify their product slate in response to growing international markets.”

Mark Kruse, general manager of grain and feed ingredients at Flint Hills Resources, said the feed is composed of spent yeast and the protein called corn gluten. It will be sold in the United States and overseas, with Asia getting special mention for its concentration of fish farms.

“Protein needs are growing across the globe,” he said. “This was our vision when we got into the ethanol business six years ago.”

The Fairmont investment follows the $100 million spent by Koch on a biodiesel plant in Beatrice. Koch is owned by politically active brothers Charles Koch and David Koch. Flint Hills acquired the plant in disuse some years ago and last year began producing what will eventually be 50 million gallons a year of diesel fuel made from corn oil, another leftover from ethanol production.

The new process at Fairmont will require about a year of construction, including the addition of a new building and two protein dryers. The project is expected to create about 120 construction jobs. The plant will remain in operation during construction.

The Fairmont plant, which employs about 60 people, is in the middle of America’s ethanol belt — Nebraska is the nation’s second-largest producer, Iowa the first, by dint of the enormous corn crops produced in those states.

Kansas-based Koch Industries is the nation’s second-largest private company, with about $100 billion in annual revenue from energy, agriculture, manufacturing and other commercial endeavors. It operates five ethanol plants in Iowa.

russell.hubbard@owh.com, 402-444-3133