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Biodiesel takes a $100 million leap forward

Agriculture.com Staff 08/15/2006 @ 8:20am

Renewable Energy Group, Inc., a biodiesel and biodiesel plant construction business that evolved from West Central Cooperative in Ralston, Iowa, Monday announced new investment of $100 million that will allow it to increase its production by 640 million gallons by 2009.

That's a huge increase, considering that at the end of 2004 the United States produced just 25 million gallons of fuel made from soybean oil and other vegetable and animal fats. At the end of last year U.S. production was an estimated 75 million gallons and production may triple again to about 225 million gallons by the end of this year, Joe Jobe, CEO of the National Biodiesel Board told Agriculture Online.

"I would say the announcement today is one of, if not the most important economic announcements of the industry," Jobe said.

Renewable Energy Group's expansion involves big players, including Bunge North America, which made a minority investment in REG. Bunge is part of Bunge Limited, the an international grain and food business that is the world's largest processor of soybeans.

But farmers and other local investors in two limited liability companies formed much of the new investment, said Jeff Stroburg, CEO of REG.

"The company will be owned primarily by Iowa investors," he said. And those individual investments were $25,000 or more, he said.

REG plans to build 15 new biodiesel plants, Stroburg said. Some will be operated independently, some will be co-located at Bunge facilities, including one at Cairo, Ill.

Other investors in REG's expansion include E D & F Man Holdings, Ltd, Natural Gas Partners VIII, L.P., the Sargents, and West Central Cooperative. The $100 million financing is one of the largest investments in biodiesel in North America.

Renewable Energy Group, Inc., a biodiesel and biodiesel plant construction business that evolved from West Central Cooperative in Ralston, Iowa, Monday announced new investment of $100 million that will allow it to increase its production by 640 million gallons by 2009.

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