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Group Raising Funds for Ethanol Plant Near Obion

Posted on: Tuesday, 13 December 2005, 18:00 CST

By Joe Walker, The Paducah Sun, Ky.

Dec. 13--OBION, Tenn. -- A 33-farmer business venture plans an initial public offering of its shares to raise up to $75 million for an ethanol plant in rural Obion County.

Slated for next spring, the stock-like offering of equity units would raise the equity portion of the estimated $150 million in capital needed for Ethanol Grain Processors LLC. The company plans to build a 60-employee dry-mill plant next year that would produce 100 million gallons of ethanol annually, starting in early 2007.

"It just picks the whole economy of the area up," said Jim Cooper, Obion County economic development director. "All the jobs would be in the $14- to $15-an-hour range, plus supervisory and salaried positions earning about $50,000 a year."

Company officials say they plan to file a registration statement with the Securities and Exchange Commission to register the units within 60 days. Chief Operating Officer Gary West said he could not comment further because of SEC restrictions.

Although the current farmer-owners are from northwest Tennessee, the offering is designed to expand ownership opportunities to Kentucky and other neighboring states.

"We'll be able to seek investors throughout the region and the country," said board member James Byford, dean of the College of Agriculture and Applied Science at the University of Tennessee at Martin.

He said the factory would be the only one of its type "this side of Hopkinsville and the southernmost plant in the country."

Planned for about two years, the plant would be built in the community of Rives, just north of Obion, a farming town of about 1,200 with little industry. It is expected to produce 700 spin-off jobs with support firms and suppliers, according to an application for U.S. Department of Agriculture Rural Development funding. Construction would funnel $142 million into the local economy, followed by $110 million a year from operations.

Rural Development approved a $150,000 grant to help develop the plant, which will turn corn into ethanol fuel for sale nationwide.

"This was the number one-ranked application in the country," said Michelle Martin of the Rural Development office in Nashville. She said there were 366 applications nationwide, and the Obion County plant was the leader largely because of its economic impact and meeting President Bush's bio-energy initiative.

Plant owners expect to boost the area economy by increasing the market demand for corn by 36 million bushes and raising local corn prices, said James Sanders, Rural Development area director. The company plans to buy corn from Obion, Weakley and Gibson counties, each of which produces more than 7.5 million bushels annually.

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Copyright (c) 2005, The Paducah Sun, Ky.

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Source: The Paducah Sun

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