The City of South Bend has a price to pay if it wants to see production resume at the ethanol plant.
Today, a representative of the company that bought the plant last July, Noble Americas, talked publicly for the first time about modernization plans.
The South Bend plant is the oldest dry mill ethanol facility in the United States. It was built in 1984, and is clearly showing its age.
But perhaps the reason the plant was built here in the first place is the same reason why it’s poised to be re-built now.
“It’s in a great location for an ethanol plant. When we talk about location, it’s access to roads and utilities and corn and markets for the products, so this site has all of that,” said Bernie Punt with Noble Americas. “The rest we can fix.”
Punt came to today’s meeting of the South Bend Redevelopment Commission to discuss plans to reopen the plant by July 1st.
“You know, the technology out there is pretty outdated, there’s been a tremendous amount of progress in the technology that’s used to make ethanol, grind up corn and make it into ethanol,” said Punt.
In the next four months, $20 million worth of plant improvements are scheduled to be made.
Over the next four years, Noble Americas plans to make $40 million in plant improvements.
“Noble Americas is really focused on long term viability of the plant so we don't run into the same issues that we ran into with the last operator,” said Chris Fielding, South Bend’s Director of Business Development. “And that's very important for us.”
So important, that the city redevelopment commission today approved the concept of contributing $2 million to the project through the purchase of a corn oil extraction unit.
“It removes about six tenths of a pound of corn oil per bushel of corn milled and that's very high value and it can be sold for lots of different purposes, and so that will add between $4 and $6 million of revenue for the facility each year,” said Punt.
“So the ability for us to help purchase a piece of equipment that will add a fourth revenue stream and stabilize long term for the community that's very valuable,” added Fielding.
While the city’s investment will start out at $2 million, $500,000 of that is being structured as a loan that would be paid back by the company over the next five years.
When the plant reopens as many as 65 employees are expected to be on staff.
While that’s fewer than were employed at the plant during the last owner’s heyday, the average wage at Noble Americas will be $27 per hour.
The company also expects to file a tax abatement request.