SIOUX CITY | Planned construction at Ag Processing Inc. will enable the company to perform all the steps needed to create biodiesel at its plant south of Sioux City.
AGP is moving forward with a $38 million expansion of its biodiesel plant in the Port Neal facility. At the same time, a $90 million vegetable oil refinery will soon begin taking shape near the existing facilities. Construction on both projects is expected to begin in coming months, said Matt Caswell, vice president for member/corporate relations.
"We're still in the final engineering stages. We're fully committed," Caswell said.
Caswell said AGP would not disclose costs for the projects, but they represent "a very significant investment."
Completion is anticipated for 2017.
"This expansion reflects our commitment to the biodiesel industry and soybean farmers as we continue to invest in this important value-added market," AGP CEO Keith Spackler said in a statement last fall.
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The Port Neal facility was the nation's first commercial-scale biodiesel plant when it opened in 1996. The plant currently produces up to 30 million gallons of the soy-based fuel per year, and the upcoming expansion is expected to double production to 60 million gallons annually, Caswell said.
In November, Woodbury County and the state of Iowa adopted a package of incentives to help finance the biodiesel expansion, which is expected to create three new jobs.
The Iowa Economic Development Authority in Des Moines approved $308,000 in added incentives, with $24,000 in loans and $280,000 in increased tax credits.
Earlier in 2015, the state board approved $152,000 in forgivable or interest-free loans and $810,000 in various state tax credits for the vegetable oil plant, which is expected to create 20 new jobs. The state's total incentive package totals $1.27 million.Â
The project qualified for the state's High Quality Jobs Program, since the new jobs all exceed the $20.66 hourly wage threshold.
The Woodbury County Board of Supervisors in November approved an exemption in county property taxes of $2.7 million, through 2024.
At the time, then-board chairman Mark Monson said the project was great news, since it would mean more locally grown soybeans would be processed in Siouxland.
Omaha-based AGP, the world's largest farmer-owned soybean processor, also operates a bean crushing facility at the Port Neal site near Sergeant Bluff. Once the vegetable oil plant at Port Neal is completed, Caswell said AGP will have the ability to refine soybean oil at the location, finally bringing a fully integrated platform in place to crush soybeans, refine the oil and turn it into biodiesel all at one location.
Caswell 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.
AGP also is finalizing plans to build a soybean processing plant in Aberdeen, South Dakota. It will be the co-op's first in that state.
Some of the soy oil processed in Aberdeen will be shipped to the Port Neal plant to be refined, Caswell said.
