This Week’s Headlines
Green Plains purchases Hopewell plant
By JONATHAN CRIBBS
HOPEWELL, Va. (Nov. 3, 2015) — An ethanol plant and significant grain buyer in eastern Virginia has its third owner in as many years.
Green Plains, an Omaha, Neb., ethanol producer announced last week its purchase of the Hopewell plant roughly two months after Vireol Bio Energy of England — its previous owner — said it was temporarily shuttering the facility due to cratering oil prices.
Green Plains owns 12 other plants across the nation — eight of which it acquired over the last six years — and paid $18.25 million for the Virginia plant, said Jim Stark, a vice president and spokesman for the company.
“We are opportunistic buyers of assets,” he said. “[That region] is a good fuel market that blends a lot of ethanol into the fuel supply in the Mid-Atlantic region.”
The company also plans to invest between $6 million and $7 million into renovations for the plant, including the addition of corn oil extraction technology, Stark said. That technology would allow Green Plains to extract about seven-tenths of a pound of corn oil from each bushel the plant processes, he said, adding 4 to 5 cents of operating income per ethanol gallon.
Green Plains also sought the plant due to its semi-coastal location. The company hopes to be able to use the site to gather distillers grains produced during the ethanol production process at Hopewell and other plants across the country along Norfolk Southern rail lines and load them onto containers destined for export markets. Hopewell is close to nearby deepwater ports.
The Scoular Co., another Omaha company that handled Vireol’s grain purchasing, will continue working for the plant through the remainder of its contract, Stark said. Though the majority of the plant’s grain is sourced in the Midwest, the company did buy grain from regional producers, such as farmer Bryan Taliaferro, who said he earmarked roughly 50,000 bushels of corn for Vireol this year from the 300,000 to 350,000 bushels he produced yearly on nearly 4,000 acres in Essex County.
“I am delighted and excited,” Taliaferro said of the plant’s ownership change. “It’s going to reinvigorate the economy and give us another outlet for our corn crop.”
The Hopewell plant is set up to produce about 60 million gallons of ethanol per year, the largest plant on the East Coast and a bit of an oddity considering the vast majority of ethanol plants are located in the Midwest around the nation’s major grain corridor.
Including Hopewell’s production, Green Plains will now be able to produce about 1.1 billion gallons of ethanol per year.
Vireol purchased the plant — initially known as the Osage Bio Energy ethanol plant — in January 2013 for about $13 million. Its previous owners were focused on processing barley, which failed. Vireol initially planned to move the plant to England but decided to keep it in Virginia and focus on corn after a Harvard University study showed its viability.
Most of the plant’s ethanol is shipped to Richmond-area mixers in the production of gasoline.
The Richmond area alone consumes about 110 million gallons of ethanol per year, and the state consumes about 410 million gallons.
The Hopewell plant should be producing by the end of the year, Stark said, and producing corn oil by the second quarter of next year.