Alliance Bioenergy subsidiary purchases closed Ineos facility

Alliance Bio-products Inc., a subsidiary of Alliance Bioenergy Plus Inc. (ALLM), West Palm Beach, Florida, announced it has received approval from the United States Department of Agriculture (USDA) Office of Rural Development (USDA Rural Development) for the collateral purchase of the closed ethanol facility in Indian River County, Florida. The approved purchase includes the fully functional plant, more than 143 acres that the plant resides on and all related equipment and vehicles.

The company made an offer to purchase the 8 million gallons per year ethanol facility with the intention of converting the current process into its patented cellulose to sugar (CTS) process under an agreement with Alliance BioEnergy. By renovating the plant and using the fermentation and distillation system already in place, and with an abundance of free feedstock such as wood, agricultural green waste and residential and commercial yard waste available, Bio-products says it can increase production capacity and profitability to create an alternative to petroleum-based fuels and other products. The plant also sits on a large parcel of land that would allow Bio-products to expand as demand increases.

“Through renovation and the implementation of our revolutionary CTS process, we’ll be able to expand our production capacity while also shortening turnaround times—a key to ramping up production quickly and bringing our product to market at scale,” says Ben Slager, chief technology officer, Alliance Bio-products. “We have long had the most innovative technology on the market in regards to biofuel production, but did not have the means to fully utilize its potential until now. Combining our industry leading technology with a plant of this capacity will allow us to meet the growing needs of the market.”

The company’s CTS process is designed to allow it to produce biofuels for less than $1 per gallon that are 100 percent carbon dioxide (CO2) neutral because of the process, and have 85 to 95 percent less greenhouse gases than petroleum-based products. Bio-products says it will be able to begin production at the plant by summer 2018, potentially generating $25 million in earnings before interest, tax, depreciation and amortization (EBITDA). The company says it will then will look to double capacity to 16 million gallons per year, potentially generating $54 million in EBITDA in 2020 before maximizing capacity of 34 million gallons per year, generating $112 million in 2023.

“We are thrilled to have been awarded approval to purchase this plant and take this significant step forward toward commercialized production at scale. By purchasing and renovating an already built facility, we’ll reduce our capital expenditure significantly allowing us to market years ahead of building from scratch,” says Daniel de Liege, chairman, Alliance Bio-products. “We have received tremendous support through our 506(c) equity offering and expect the opportunity to close quickly now that the purchase has been approved. In combination with some of our other production partnerships in place, we believe we are in a strong position to begin generating significant revenues and bringing increased value to our shareholders.”

The plant purchase is set to create approximately 100 permanent jobs in the short term, with additional employment opportunities created as production expands. The purchase of the plant is being funded through a mixture of debt and equity. The equity portion of the investment is being done via a 506(c) filing that is still open for investor consideration to reduce as much debt as possible.