Tuesday, August 17, 2010

On Schedule

An ethanol plant located at LifeLine Foods, Inc. in St. Joseph, Missouri is on schedule to get a make-over to a cellulosic biorefinery. Ethanol plant designer ICM, Inc. (private) is using $25.0 million from a Department of Energy Grant to fund construction and operation of a demonstration cellulosic ethanol plant using corn fiber from LifeLine’s dry corn mill processes. Switchgrass and so-called energy sorghum are also in the plans for feedstock alternatives. I first wrote about the grant award in the March 30, 2010 post ”Corn Ethanol Hangover.”

In June 2010, ICM announced they had come to terms with the DOE on the next step in the project and expects to have construction completed by the end of 2010. Achievement of this goal would allow ICM to going into operation at the converted plant in 2011. The idea is to operate this plant as a demonstration. If successful we expect ICM to use it as a foundation for production-scale plant in other locations.

This project is one of many attempting an efficient cellulosic ethanol process. First of all, it is encouraging that the project is on schedule. The flexibility in acceptable feedstock is also a plus as it is difficult to predict whether corn price will always lead to a favorable economic equation for ethanol production.

ICM still has an investment opportunity section at its web site, but appears to be turning a cold shoulder toward offers of capital. We expect that its business model as an engineering firm has supported a profitable operation. Given no driving need for capital and a weak IPO market, do not expect an initial public offering any time soon.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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