FREMONT - A $109 million ethanol plant planned on the site of a former sugar-beet processing factory in Fremont is unusual in that the owner of a big chunk of the plant will be a cooperative of sugar-beet growers who are, in effect, financing a facility that will benefit corn farmers.
The proposed Ohio Renewable Fuels LLC plant, scheduled to begin production in 2009, is designed to pump out 50 million gallons of the alternative fuel annually, using corn as the raw material. Although some ethanol is produced from sugar beets, industry experts and the U.S. Department of Agriculture say corn ethanol is more profitable.
The venture is good news for Fremont, especially because it brings new life to a largely unused facility that once employed hundreds.
"We're excited about it," Michael Jay, Fremont's economic development director, said yesterday. "We've got [a new tenant for] a facility that's not producing a product like it once did. And they will use a lot of water, which is good for the city, and they will pay taxes."
Officials of Michigan Sugar Co., of Bay City, did not respond to Blade requests for information. The cooperative has nearly 1,300 growers who will own up to 20 percent of the ethanol plant.
These plants make a vehicle-fuel mix of ethanol and petroleum, much of it having 85 percent ethanol and known as E85, which can be used in a variety of cars and sport utility vehicles.
It is cheaper than regular gasoline but gets gasoline but gets poorer mileage.
Ohio's Department of Development said the Fremont project includes an investment of $8 million for land and building acquisition and $79 million for construction, machinery, and equipment.
In addition, the agency said, the newly formed firm will invest $21.7 million in design, administrative, and other costs involved in renovating a 100,000-square-foot facility.
It is to have 37 jobs paying an average of $13 an hour.
The site, which has been used until recently for packaging sugar, has been partially cleared, but more work is needed before construction can begin.
Perhaps the biggest hurdle, though, is financing.
The owners plan to finance 80 percent of the costs, or $87 million, through selling stock to private investors.
Michigan Sugar has hired Fagen Inc., of Granite Falls, Minn., as the contractor.
Fagen has built dozens of such plants around the country.
Michigan Sugar, which dates to 1906, said it is the largest sugar-beet processor east of the Mississippi River and the nation's fourth largest.
It acquired the Fremont plant in the mid-1980s and quit processing sugar in 1996, at which time the plant employed 138 full-time and up to 300 seasonal employees.
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