SERGEANT BLUFF | Two expansion projects at Ag Processing Inc. will enable the company's Port Neal plant to make production of biodiesel more efficient and also increase the production capacity.
Construction of a $90 million vegetable oil refinery is nearly complete, and initial operations have begun. With the refinery's completion, AGP will now have the ability to refine soybean oil at the site, bringing a fully integrated platform in place to crush soybeans, refine the oil and turn it into biodiesel all at one location.
"We have started operation of some of the equipment in the refinery, and we are definitely on schedule," said Wayne Johnson, regional marketing manager at the Port Neal facility, located near Sergeant Bluff.
While finishing touches are made on the refinery, a $38 million expansion of the biodiesel plant is ongoing and should be finished by midsummer and begin production shortly after that. The plant currently produces up to 30 million gallons of the soy-based fuel per year, and the expansion is expected to double production to 60 million gallons annually.
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"Anytime that you're with a company that there is growth and expansion, that's pretty exciting," Johnson said.
It's the fourth expansion of the Port Neal biodiesel plant, which was the nation's first commercial-scale biodiesel plant when it opened in 1996.
The expansions are expected to create more than 20 jobs, Johnson said.
Omaha-based AGP, the world's largest farmer-owned soybean processor, also operates a bean crushing facility at the Port Neal site. That facility was built by Farmland Industries in 1974 and purchased by AGP in 1983.
Johnson said the refinery will cut freight costs, because all soybean crushing, processing and production will be done at one site rather than having refined oil shipped in from somewhere else.
Johnson said much of the oil that is refined at Port Neal will stay on site to be used for biodiesel production. The soy oil also will be sold to food markets. Soy meal from the crushed soybeans is sold into the local animal feed market.
Demand for biodiesel remains strong, Johnson said, and he expects demand to continue to grow.
"Certainly we've seen positive growth in biodiesel across the U.S.," he said.
A sure sign of that expected growth will take place this spring, when AGP will break ground on a new soybean processing plant in Aberdeen, South Dakota. When completed in 2019, the plant will send some of the soy oil processed there to the Port Neal plant to be refined.
