Advanced BioEnergy, LLC announced it will sell its Fairmont ethanol plant to Wichita, Kan.-based Flint Hills Resources. The transaction is expected to close later this year and is subject to regulatory approval.
The Fairmont ethanol plant began production in October 2007. With an annual capacity of more than 115 million gallons, the plant produces more than 320,000 tons of dried distillers grains each year, as well as more than18 million pounds of non-food grade corn oil. The plant has about 50 employees.
Advanced BioEnergy decided to solicit interest from potential buyers of the Fairmont facility after being approached by a potential buyer earlier this year. The company believes the transaction will be beneficial to all parties, including its more than 1,200 unit holders, says Richard Peterson, CEO of Advanced BioEnergy.
"The announcement today underscores the value we have created over the past four years developing the Fairmont plant into a superior ethanol production asset," Peterson says, "Maximizing the value of our business has been a priority in the face of continuing market consolidation and compressed operating margins as the industry works toward long-term alignment of supply and demand."
Advanced BioEnergy will continue to operate its two ethanol plants in Huron and Aberdeen, S.D., after the transaction closes.
Flint Hills Resources is a refining, chemicals and biofuels company with operations primarily in the Midwest, Texas and Alaska. Its biofuels business includes four Iowa ethanol plants with a combined capacity of 435 million gallons, a biodiesel plant in Texas and investments in biofuels technology and feedstock development.
"We feel very fortunate to add Advanced BioEnergy's Fairmont plant to our biofuel business," says Brad Razook, chief executive officer and president of Flint Hills Resources. "This is a best-in-class operation located in one of the highest corn-producing regions in Nebraska."
Flint Hills Resources is a wholly owned subsidiary of Koch Industries, Inc., which is one of the largest private companies in the world.