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Published September 21, 2010, 08:19 AM

Alchem ethanol plantto go on auction block

FARGO, N.D. — Harold Newman’s former Alchem Ltd. ethanol plant at will be sold at auction. It was one of two ethanol plants to get North Dakota on the map in the business in the mid-1980s.

By: Mikkel Pates, Agweek

FARGO, N.D. — Harold Newman’s former Alchem Ltd. ethanol plant at will be sold at auction. It was one of two ethanol plants to get North Dakota on the map in the business in the mid-1980s.

Steffes Auctioneers Inc. of Fargo, N.D., describes it as a “two-day absolute auction.” The plant and fixtures will be sold at 10 a.m. Sept. 29, and the personal property items will go Sept. 30, also at 10 a.m.

The Steffes website says the Alchem ethanol plant is reported to have a nameplate capacity of 9.5 million gallons. An industry trade publication said the plant produced at 10.5 million gallons a year, although it was producing 8.5 million gallons at the end. The company had more than 30 employees in 2007. Then, Newman had hinted about expanding to 18 million gallons a year, but instead, he closed it because of high corn costs and low ethanol prices.

Plant’s history

The plant is small in comparison to most modern corn ethanol plants, which typically are designed at 100 million to 120 million gallons a year.

The oldest operating plant in the state now remains in Walhalla, N.D., operated by Archer Daniels Midland as ADM Corn Processing, at 28 million gallons per year.

Alchem started as a potato flake plant in 1983 by Borden’s and was converted to an ethanol plant in December 1985 — first as a 3.5 million-gallon-per-year facility. It was upgraded, but was shuttered in October 2007.

“Recently, millions of dollars have been spent to upgrade the plant with an automation system, particularly with the coal-fired boilers and steam generating system,” the Steffes advertisement says. “The thermal oxidizer system has never been operated, but should prove to be a valuable addition. The methonator system installed has been a valuable improvement as well as the carbon dioxide scrubber, a new re-boiler, chiller and other items.”

The 111,000-square-foot structure, a total of all of the buildings, includes a scale building, office, dryer section and heated shot, dried distiller’s grain building, fermentation area, distillation/evaporation area, coal shed with more than 700 tons of coal, cook room, boiler room, grain unloading building, storage and unloading building.

A portion of the building caved in because of snow in 2009 to ’10, but the property is being sold in its present condition.

Wastewater at one time was a problem for the plant, but it now has a backup lagoon system a mile north of the facility, and those lagoons are included in the sale.

“Since the methanator system was installed, the lagoons were not utilized and the wastewater has been discharged to the city of Grafton,” N.D.. with the lagoons as backup.

The advertisement says Rainbow Gas Co. had supplied gas from the MDU Pipeline, but the company turned to coal because the gas supply was “inadequate and inconsistent.”

An article in August 2007, just two months ahead of its closing, had said that three factors — age, size and distance from plentiful corn — didn’t stand in the way of Alchem’s success.

“Efficient workers and good ownership keep this industry-starter in the fuel- and money-making game,” the Ethanol Producer Magazine article said. At the time, Newman said “virtually all of our equipment is new.”

The sale marks an end to Newman’s first ethanol enterprise. The plant came online when the federal government first was throwing incentives at ethanol in the wake of the 1970s energy crisis.

The plant started with potatoes, wheat and then corn as a feedstock. It was a market for U.S. corn grown within 90 miles, and the dried distiller’s grains went largely to Canadian beef producers. Newman started with eight other investors but eventually bought them out, according to the Ethanol Producer article.