MGP Groundbreaking in August 2001
Midwest Grain Processors (MGP) began within Ag Ventures Alliance as a Corn Processing Committee. Following a year of research, several AgVA members made a commitment to turn the idea of a farmer-owned ethanol plant into reality and created MGP as a new legal entity in April of 2000. While MGP developed business plans for the ethanol plant as part of a new agricultural industrial park, Ag Ventures Alliance helped develop plans for the membership drive. Beginning in November of 2000 and extending into the spring of 2001, AgVA sponsored informational meetings all across Iowa. In addition, Producers Alliance sponsored a series of MGP meetings in Illinois . The end result for MGP was a membership base of 1,000 farmers committing a supply of corn and $17 million of equity.
After extensive analysis, a 230-acre site was selected near the town of Lakota in north central Iowa. Site grading began in the summer of 2001 with construction beginning in the fall. The 45 million gallon per year ethanol plant began operations in November of 2002 and has been running smoothly ever since. The plant employs about 35 people and processes 17 million bushels of corn per year into ethanol, distiller's grain and CO2. Including some of the infrastructure for the industrial park, the total project cost was about $60 million.
At the outset of the project, the initial Board of Directors decided upon the slogan “MGP… Ethanol and More” because of the focus on seeking new technology to diversify the product line and to attract synergistic businesses to the industrial park. Now that the plant is operational, MGP is spending more of its energies on pursuing these goals.
MGP received a value-added agriculture matching grant for $150,000 from USDA Rural Development to explore bio-diesel production or the expansion of the ethanol facility. As a result of this study, MGP decided to expand. Lurgi PSI Inc. is serving as general contractor on this 12-month, $52 million project. A doubling of plant capacity will be accomplished by building a process line parallel to the existing line. Construction is expected to be complete by December of 2005.
MGP's growth plans include building, acquiring &/or merging with other ethanol plants in order to reach 200 mgpy capacity by 2006 and 300 mgpy capacity by 2008. With expansion at Lakota underway, the next step is expected to involve the construction of another 50 mgpy facility at another location followed by expansion of that facility to 100 mgpy. Funding this growth will require additional equity and MGP plans on obtaining the majority of its equity capital from farmers.
Midwest Grain Processors recently completed a successful stock offering, selling 7.0 million shares to farmers. The $17.5 million in equity raised will be used for the plant expansion that is currently under way, as well as construction or purchase of a second site.
Dave Nelson
President, Board of Director
641-444-4635
nelsond@kalnet.com
MGP Groundbreaking in August 2001
MGP Plant
MGP Plant
View more pictures of the MGP ground breaking.
For more information visit their web site at http://www.mgpethanol.com/.