Another area biofuel company delays construction

By Gabriel Monte, Freedom New Mexico

An Australian company that plans to turn animal fat into biodiesel is delaying the construction of a plant in Clovis by two to three months, company CEO Ross Garrity said Monday.

The company was scheduled to start construction this month.

Garrity said an increase in the price of animal feed stock and the task of raising capital has caused the delay.

“We’re targeting to start the project’s construction in sort of a June-July time frame,” he said.

Dallas-based American Renewable Fuels, part of Australian Renewable Fuels, is the second biodiesel plant that has postponed construction because of market and capital reasons.

Clovis Biodeisel halted construction on an $18 million plant located at the Clovis Industrial Park that was scheduled to open by March. Officials said they hope to open the plant with a year.

Plans for a third alternative fuel plant, Clovis Ethanol, was canceled after its parent company, ConAgra Foods, decided the ethanol market was too volatile to continue constructing the plant.

Garrity said his company has finished the engineering of the plant and received an air-quality permit from the New Mexico Environment Department.

American Renewable Fuels plans to build a 75 million gallon-a-year biodiesel plant on 25 acres of land in Clovis Industrial Park. The plant will create about 50 jobs and will use animal feed stock such as beef tallow to produce the alternative fuel, company officials have said.

Garrity said the lending market reeling from the effects of too many sub-prime mortgages has made it difficult to get the capital it needs for the plant.

“We’re sort of facing the same issues with everyone else is as well with the credit market the way it is right now,” he said.

And like most biodiesel plants, the company faces an inflation of prices for its feed stock, Garrity said. But he said animal feed stock prices have not climbed as high as the price of soy bean, which most plants use as the main ingredient for its product.

“They’ve gone up, but not at the extent soy beans has,” he said. “We’re still competitively priced for producing biodiesel right now.”

American Renewable Fuels and Clovis Biodeisel were recruited by Clovis Industrial Development Corp.

Clovis Biodiesel, which will make biodiesel from soy bean and canola oil, was about 80 percent complete when construction was halted. The plant would bring in about 13 jobs and produce about 15 million gallons of biodiesel a year, company officials have said.

CIDC executive director Chase Gentry said the city’s economic development branch has promised incentives such as a 15-year tax exemption and 25 acres of land to the American Renewable Fuels once the company amasses the capital it needs to build in Clovis.

“But that deal is not done: there’s no land that’s been transferred and there’re not Industrial revenue bond that’s been approved,” he said.

Gentry said despite the setbacks of the alternative fuel industries, the CIDC plans to bring diverse industries to Clovis regardless of market conditions, as long as companies have the capital and would bring new jobs to the city.

“I don’t see us being discouraged,” he said. “If there’s a company that’s looking (to build) and it looks like they’ve got their financing together and they’re going to bring jobs to community, I think we’re going to pursue that prospect.”