Press Releases

GLE expands to Aberdeen

By Terry O'Keefe, Staff Writer of Watertown Public Opinion
Friday, February 10, 2006 10:09 AM CST

In another sign the industry is ready to grow and expand to meet the increasing market possibilities of renewable fuels, Glacial Lakes Energy of Watertown has announced plans to build another ethanol plant near Aberdeen.

GLE CEO Tom Branhan told the Public Opinion Thursday he is looking at three possible sites outside Aberdeen and would like to start site work this spring and construction by fall.

“Aberdeen Energy will either be a 50- or 100-million gallon per year ethanol plant,” Branhan said. “The deciding factor will be the results of a feasibility study being performed by a company called ProExporter.”

In a telephone interview from Pierre Thursday, Branhan said GLE looked at the Aberdeen area for a new operation because of the opportunities available in that area.

“The main reason is, there's very few prime sites left in our state (for ethanol plants),” Branhan said. “These sites have everything we need - good roads, natural gas, rail service and enough land.”

Branhan said if GLE goes with a 100-million gallon plant, construction costs would be about $140 million, while a 50-million gallon plant would carry a price tag of about $80 million. He said equity drive meetings will be scheduled sometime this spring and investment in the new operation will be open to the general public, including people outside of South Dakota.

Branhan said GLE, which is wholly owned by the Glacial Lakes Corn Processors cooperative, will be the managing partner in the new plant. In that capacity, GLE will oversee the equity drive, construction and operation of the plant, with Branhan as CEO.

Branhan also recently announced an expansion at GLE's Watertown facility which will take ethanol production at that plant from about 50-million gallons a year to 100 million gallons. The company also has ownership interest and management contracts with Granite Falls (Minn.) Energy and with Redfield Energy, a 50-million gallon a year plant currently being built north of Redfield.

Branhan said GLE holds 22 percent ownership at the Granite Falls operation, 8 percent in the Redfield plant and will likely have about a 5 percent interest in the Aberdeen ethanol plant, along with being the managing partner.

That, Branhan said, will eliminate the need for any duplication of management or support staff that is already in place through the Watertown operation.

“The existing GLE board will stay in place, there won't be a new board,” Branhan said. “What a wonderful opportunity for GLE.”

He said Fagen, Inc., of Granite Falls has been secured for construction of the new plant. Fagen also built the plants in Watertown and Granite Falls and is building the Redfield plant.

“Aberdeen Energy will benefit from all the economies of scale by being a strategic partner with Glacial Lakes Energy, Granite Falls Energy and Redfield Energy,” Branhan said. “The GLE board is working on a business structure for direct investment into this new plant that will not dilute the ownership of current investors in GLE/GLCP.

“Existing GLE/GLCP shareholders will also be given preference in the event that Aberdeen Energy shares are over sold.”

Branhan said the GLE board paid a 25-cent per share cash dividend to its shareholders last month and has approved the payment of another 21-cents per share payment from retained earnings from fiscal years 2003 and 2004 in hopes current investors in GLE will use that cash to invest in Aberdeen Energy.

“There is huge investor interest, not just locally (in Aberdeen), but also from Watertown and the Redfield areas,” Branhan said. “It's the result of the reputation we've developed and the trust they have in our ability to run these plants.”

Branhan said GLE has an agreement in place with the WEB Water System for water supply, the Aberdeen sites are near the Northern Border natural gas pipeline and located close to a major rail line for transportation.

Although there is a small ethanol plant already operating in Aberdeen and a 50-million gallon plant at nearby Groton, Branhan said corn supply is not really a concern because of increasing technology that is expanding the corn-growing area in South Dakota.

“New drought-resistant corn will help push the corn area further to the west,” he said. “We feel the boundary will be west of Aberdeen where there will be good corn crops.”

Branhan said GLE has been looking at expansion opportunities, including some outside of South Dakota, but chose the Aberdeen site because of the local connection.

“We want to position GLE to manage as many plants as possible in close proximity to Watertown,” Branhan said. “I have had offers to construct and manage plants outside of South Dakota, but I wanted to stay here - this is our home.”

Branhan said a 50-million gallon plant would create 35 to 40 new jobs in the Aberdeen area, while going to 100-million gallons a year would mean 50 to 60 new jobs.