Sioux Falls, South Dakota based ethanol maker, POET, announced Wednesday that it has purchased a 90-million gallon capacity plant near Cloverdale, Indiana.
POET's CEO, Jeff Broin, said it is only the second acquisition of an existing plant after buying its first in Scotland, South Dakota in 1987.
"Twenty-six plants later, we still see tremendous opportunity in the ethanol industry," Broin said during a press conference from New York City, where he is meeting with potential investors in the ethanol industry.
The rest of POET's chain of plants that now numbers 27, were built from the ground up by the company that is the nation's largest ethanol producer.
The Cloverdale plant, built by the bankrupt company, Altra Biofuels, has been idle since late 2008.
Broin said POET expects to bring the plant back on line in April of 2011, after retrofitting it with a proprietary fermentation process and technology that improves water efficiency.
It will be the fourth Indiana plant for POET. Broin said it meets all of POET's requirements for an acquisition. "AT POET, we have literally been looking at dozens and dozens" of plants that were up for sale.
Broin would not disclose the price paid for the plant but he said asking prices have risen recently.
He said the industry currently is operating near capacity.
"Today we are up against a blend wall. We are limited to 10% of the U.S. gasoline supply," he said.
Broin said POET was disappointed the EPA didn't meet an expected June announcement of a decision to increase the amount of ethanol allowed in gasoline to 15%, but he said he's optimistic that the agency will approve the change.
The Cloverdale plant might eventually be a candidate for production of an additional 40 to 50 million gallons of cellulosic ethanol, Broin said.
He said the company's first cellulosic production, 25 million gallons at an existing corn ethanol plant near Emmetsburg, Iowa, could go online this year if the Department of Energy approves loan guarantees.
POET has been able to reduce the cost of making cellulosic ethanol from $4.15 a gallon to $2.35 a gallon, which he said is competitive with gasoline but not with grain ethanol.