Tyson, partner launch work on biodiesel plant
Posted on Tuesday, October 7, 2008
A partnership between Tyson Foods Inc. and a fuel manufacturer broke ground Monday for a Louisiana fuel production facility that will turn chicken grease and other animal fats into biodiesel.
Dynamic Fuels LLC, a joint venture between Springdalebased Tyson Foods and Syntroleum Corp. of Tulsa, marked the start of construction on a fuel plant expected to be completed late next year in Geismar, La., just outside Baton Rouge.
The plant will use a patentpending technology developed by Syntroleum to make highgrade biodiesel and jet fuels from Tyson-produced nonfoodgrade animal fats such as beef tallow, pork lard, chicken fat and greases, a news release from Tyson stated.
Jeff Webster, senior vice president and general manager of Tyson Foods’ renewable products group, said the demand for biofuels should remain steady despite recent reductions in the price of crude oil and refined gasoline.
Crude oil closed at $ 88 a barrel Monday, an eight-month low. Oil has fallen 40 percent since the July contract peaked at $ 147. 27 a barrel on July 11, according to the New York Mercantile Exchange.
“The demand is partially driven by fuel prices, but the larger factors are energy independence and national security concerns about relying on foreign imports,” Webster said Monday.
Jeffrey Bigger, director of the Dynamic Fuels LLC management committee, said the plant is the first such fuel production facility in the United States.
The Dynamic Fuels plant is scheduled to begin production in 2010 with a total capacity of 75 million gallons per year, the news release states.
The $ 138 million plant will employ 45 people and will generate an annual payroll of more than $ 4 million. It will also have positions for 20 full-time maintenance contractors, the release states.
Geismar is in Ascension Parish.
Ascension Parish has a 2006 population estimate of 97, 335, according to the U. S. Census Bureau. Its median household income in 2004 was $ 48, 789, compared with Louisiana’s $ 35, 216. It is part of the Baton Rouge Metropolitan Statistical Area.
Capital funding is expected to include $ 100 million in Gulf Opportunity Zone Bonds approved by the Louisiana State Bond Commission. The balance, $ 38 million, is being split between Tyson and Syntroleum.
Gulf Opportunity Zone bonds are an inexpensive way to finance projects in Louisiana because of their federal and state tax exemptions. President Bush approved the funding program in late 2005 to help the Gulf Coast recover from hurricanes Katrina and Rita.
Catharina Milostan, an analyst for Chicago-based Morningstar Inc. who follows Syntroleum’s performance, said she has concerns about that company’s ability to secure funding for the plant.
“This is definitely a step forward. I’m just waiting to see how they are able to pay for it in this credit market right now,” Milostan said.
Until last year, Syntroleum was losing millions of dollars annually to excessive overhead and high research costs. The company reduced staff from 141 in mid-2006 to 22 at the end of 2007.
Syntroleum reported net income of $ 1. 64 million for the quarter that ended Dec. 31. It reported a net loss of $ 1. 89 million for the quarter that ended June 30, according to the company’s income statement. Shares of Syntroleum closed at 91 cents, down 4 cents or 4. 21 percent, Monday on the Nasdaq. Tyson shares closed at $ 11. 75, up 7 cents or 0. 6 percent, on the New York Stock Exchange.
To contact this reporter: sroberts@arkansasonline. com
FEEDBACK:
Something to say about this topic? Submit a Letter to the Editor online
