BY DOUG LEDUC, Greater Fort Wayne Business Weekly
dougl@fwbusiness.com
It took four years of planning and courting ethanol industry investment to get to the site preparation work finally under way for a $177-million plant on 419 acres along South Adams Street in Bluffton.
Garry Jones, chief executive officer for Wells County Chamber of Commerce/Economic Development, said he began working that long ago to attract ethanol-plant investment because he knew the county had everything such a plant would require.
The site Indiana Bio Energy selected is served by Norfolk Southern and Wabash Central rail lines and can connect easily with all the water and natural gas it will need. Best of all, it will be able to get all the corn it needs from within a 50-mile radius.
After South Dakota-based Broin Companies announced last month it also would locate a $110-million ethanol plant in the county, Jones said the company's decision validated his analysis of the area's suitability for ethanol production.
Indiana Bio Energy was formed by area investors to capitalize on the business opportunity presented by the abundant resources for ethanol production, and its general manager, Edgar Seward, became acquainted with the group after running into one of its directors at an industry conference.
The two kept in touch, and Seward said he provided some coaching from a distance as the investors became more serious about establishing an ethanol plant in the county. Eventually, the relationship resulted in his recruitment for the project.
Seward said he has worked in the industry for more than 16 years, including employment at some of the largest ethanol organizations in the country.
"I've staffed and started several facilities and provided technical support to seven or eight facilities over the years," he said.
An ethanol plant is a good investment because the United States is positioning itself to rely less on imported energy and because the price of energy is going to rise at a much more rapid pace than the price of resources needed to make ethanol, he said.
The world has seen a rapid rise in demand for petroleum, particularly in the Far East with the economic growth of China and India, and there is "a world peak on oil production everyone agrees is coming," he said.
Seward is not predicting the country will ever produce enough ethanol to come close to replacing its gasoline, but even supplying a small part of the nation's energy needs can have a favorable impact on prices when the United States consumes 25 percent of the world's petroleum, he said.
"It's only one piece of a dynamic energy puzzle."
Beyond its 60-employee payroll and the amount it adds to the county's property-tax base, the plant will benefit the area's economy by increasing area farm incomes, Seward said.
The Indiana Bio Energy plant will need enough corn to produce 100 million gallons of ethanol annually, and the Broin plant will need enough to make 60 million gallons each year. Seward said farms in the area would produce more than enough corn for both facilities.
During 2005, farmers within 50 miles of Bluffton produced 215 million bushels of the grain, and at that production level, Indiana Bio Energy would need about 18 percent, he said.
Average corn yields have been trending upwards over the years, and "the region has the ability to grow a lot more corn," Seward said.
Purchasing for ethanol production is expected to increase the per-bushel price of corn between five cents and 10 cents. For a farmer growing 1,000 acres of corn with an average yield of 150 bushels per acre, the boost would mean $7,500 extra per year.