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Ethanol Plant Planned in C.R.

Expansion By ADM Will Be Boon for Corn

George C. Ford

The Gazette

May 11, 2006

[Note: This material is copyright by The Gazette, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of The Gazette.]

    CEDAR RAPIDS — Archer Daniels Midland Co. has selected Cedar Rapids as the site of a $348 million ethanol manufacturing plant that will produce 275 million gallons of the fuel annually.

    The Decatur, Ill., company said it would build a dry corn-milling plant adjacent to its corn-processing plant. The new facility, which will reportedly employ about 80, will be on land ADM has acquired at 60th Avenue and Locust Road SW.

    ADM’s capital investment will be the largest in Cedar Rapids since Weyerhaeuser Corp. and a partner invested $500 million in the Cedar River Paper Co. recycled cardboard plant in the mid-1990s.

    ADM already has an ethanol operation in Cedar Rapids.

    The new ethanol plant will require 250,000 additional bushels of corn a day. That will be ‘‘a tremendous boost’’ for cash corn prices in Cedar Rapids and will ripple outward for a couple of hundred miles, said Bill Havertape, commodity broker and coowner of Midwest Strategic Investments in Cedar Rapids.

    Havertape estimated the Cedar Rapids corn price would climb by 5 cents to 10 cents a bushel.

    The expanded ethanol production also would increase the number of railcars and trucks delivering corn. Each railcar can carry 5,000 bushels of corn, and trucks usually carry 900 bushels.

    Iowa leads the nation in ethanol production, turning out 1 billon gallons a year, according to the Renewable Fuels Association, which is based in Washington, D.C.

    The additional corn grinding capacity at ADM would elevate Cedar Rapids to the No. 1 city in America in terms of what is ground daily. The ADM, Cargill and Penford Products plants will have a total grind of 1 million bushels of corn a day.

    ADM, which employs 330 at its ethanol and corn sweeteners processing plant at 1350 Waconia Ave. SW, said construction of the new plant, scheduled for completion in the second half of 2008, is subject to applicable government approvals.

    Mark Seckman, president of Priority One in Cedar Rapids, said the ADM plant represents a partnership of the city of Cedar Rapids, the Iowa Department of Economic Development, Priority One and ADM. Priority One is the economic development arm of the Cedar Rapids Area Chamber of Commerce.

    ‘‘We’ve proven day in and day out that this community is an excellent location for this type of production,’’ Seckman said. ‘‘I think ADM sees this on a daily basis and it put Cedar Rapids front and center for this project.’’

    Seckman said the Iowa Department of Economic Development Board is expected to consider ADM financial incentives at its June meeting. The board will be asked to approve an investment tax credit, a research and development tax credit, a sales tax refund on construction materials and tax benefits under the state’s High Quality Jobs Program.

    The Cedar Rapids City Council reportedly will be asked to approve a 10-year urban revitalization property tax credit.

    ADM also will be seeking air quality permits from the Iowa Department of Natural Resources.

    The Cedar Rapids project is the second new dry corn-milling ethanol plant announced by ADM this year.

    In February, the company said it planned to build a plant in Columbus, Neb., that would produce 275 million gallons of ethanol each year. That facility is expected to be operational in the first half of 2008.

    ‘‘Biofuels are an important part of America’s current and future energy mix, and we believe it is important to invest in expanded ethanol production to meet growing demand,’’ said Edward Harjehausen, senior vice president for corn milling and bioproducts, in a news release Wednesday announcing plans for the Cedar Rapids plant.