SEMO Milling on Wednesday announced plans to build a 100-million-gallon-per-year ethanol plant next to the corn mill it is building on 30 acres at the Southeast Missouri Regional Port Authority in Scott City.
The plan is a joint venture with Kansas-based Ethanex Energy North America Inc., which designs and develops ethanol plants, said Dan Fetherston, director of administration for SEMO Milling.
Site work is expected to begin in August with production beginning in late 2007, Fetherston said. The site of the ethanol plant is just off Harbor Road.
Construction of the corn milling operation is expected to be finished in September.
The time line is not unrealistic, Fetherston said. "Everything's going to move significantly faster with this project," he said. "It's not a situation of 'if the money is raised.' The financing is already in place, the money is there. We have the land. We're going full-speed ahead."
Fetherston would not yet reveal the financial investment. He said most of the investors live outside Missouri.
He expects the ethanol plant to create 30 to 40 new jobs.
Mitch Robinson, executive director for the business recruiting group Cape Girardeau Area Magnet, said his reaction is the same as with the previous announcements of the other two area ethanol plants.
"It's like with all of them right now: We'll see what happens," he said. "It's a matter of who gets the spade in the ground first. It looks like we're going to be covered up with them."
Still, Robinson said demand for ethanol is increasing with gas prices skyrocketing. He noted that Gov. Matt Blunt last month signed a new law requiring most Missouri gasoline to contain a 10 percent ethanol blend. The requirement kicks in Jan. 1, 2008. The requirement applies only when the price of ethanol-blended fuel is equal to or drops below the price of regular gasoline. Premium-grade fuel will be exempt from the requirement.
Missouri now has ethanol plants in Craig, Macon and Malta Bend. A fourth is expected to begin production in Laddonia this fall. Combined, the four plants are expected to produce about 156 million gallons of ethanol annually.
Gas stations in Missouri sold 3.27 billion gallons of gas in 2005, according to the Missouri Petroleum Marketers and Convenience Store Association -- meaning 327 million gallons of ethanol would have been needed to meet the mandate if it had been in effect last year.
Two other ethanol plants are in the planning stages in Southeast Missouri. Developer Phil Danforth of Leawood, Kan., hopes construction on more than 100 acres along Nash Road starts in late summer and that the plant will be fully operational 18 months later. The site is in Cape Girardeau County near the airport.
Late last year, Bootheel Agri-Energy LLC, headed by Chaffee farmer David Herbst, announced its intention to build a $205 million plant near Sikeston. All three local plants plan to produce 100 million gallons of ethanol each a year.
Danforth said he's not worried about three ethanol plants being located so close together. "I'm not concerned because it's not built yet," he said referring to the SEMO Milling plant. "Everybody has high hopes and high aspirations, and they're going a million miles an hour in a million different directions. We'll see. It's not built yet. We'll see."
The new ethanol plant has come around faster than anyone expected, said Dan Overbey, executive director at the port authority. Overbey said the port authority board of directors considered whether ethanol is simply a fad.
"You just scratch your head and wonder: Is this where we really want to be or not?" Overbey said. "We're seeing a big shift in the economy right now with fuel and so forth, and when you see some of the bigger companies in the grain industry moving over to ethanol, it tells you it's not just a flash in the pan."
Oberbey said getting SEMO Milling's corn milling operation going before building the ethanol plant would have been preferable. "It would have been nice for them to get up and running and have a year or two of success before doing this," Overbey said. "Sometimes events don't work out that way."
Having so many ethanol plants in the area could be a mixed blessing, said Gerald Bryan, an agronomist with the University of Missouri Extension office in Jackson.
Southeast Missouri corn growers could benefit because of greater demand for their product, which could also drive up prices. But he points out that Southeast Missouri does not grow nearly enough corn to support three ethanol plants.
The Missouri Agriculture Statistics Service estimates that the Southeast Missouri counties of Butler, Cape Girardeau, Dunklin, Mississippi, New Madrid, Pemiscot, Scott and Stoddard generate 64 million bushels of corn a year. A 100-millon-gallon plant requires 36 million bushels a year. That means some corn will have to be brought in from outside Southeast Missouri, a point Fetherston acknowledged, though he didn't know how much.
Bryan also would prefer more local investors were involved so the profits stay in the area.
"It is exciting news," Bryan said, "but I myself have to wonder if there's room enough for them here. I think three of them are going to overload the area, on a lot of levels. But bringing in corn from the outside and shipping profits out of the state, I don't see that quite as beneficial."
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