Friday, March 21, 2008

Bunge Sells BioDiesel Plant Before Opening

Bunge North America in 2006 began construction of a bio-diesel plant next to it's Danville, Illinois milling operation. Of course 2006 was a great year for these projects to get started and it appeared lot's of money to be made. But this week Bunge announced it was selling the plant, which was recently completed to Blackhawk Biofuels:

In 2006, Bunge and Biofuels put together the deal to build the $30 million biodiesel facility on about 7 acres adjacent to Bunge's local milling plant at 321 E. North St. in downtown Danville. Bunge negotiated the purchase of several private houses in the East Madison Street area to gain the necessary acreage to build the plant, which can produce 45 million gallons of biodiesel a year.

According to Ron Mapes, chairman of the board for the new investment group, Fifth Third Bank and Renewable Energy Group, based in Iowa, will be the lenders for acquiring the Danville operation. REG will manage the facility, Mapes said.

Blackhawk, with investors in Illinois, Iowa and Wisconsin, had been planning its own biodiesel facility near Freeport in northwestern Illinois, west of Rockford. But about three weeks ago, Mapes said, the group's lead lender withdrew its support, halting the project. Mapes would not say why the lead lender backed out except that it was that lender's decision.

Blackhawk then became aware of the opportunity to acquire the project in Danville, which was already complete. Blackhawk's board of managers made the decision on March 14 to purchase the Danville site rather than scrambling to find a lender and
continue with its original plan to build a facility in the Freeport area, Mapes said. On Monday, Blackhawk sent letters to its investors, notifying them of the plan, he said.

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