CHICAGO, ILLINOIS, US – Archer Daniels Midland Co. (ADM) announced on Oct. 21 that it has reached an agreement to sell its ethanol production complex in Peoria, Illinois, to BioUrja Group, a Houston, Texas, US-based company.
Juan Luciano, ADM’s chief executive officer, said the sale of the Peoria facility was an important element of the strategic review of its dry mill ethanol assets.
“By reducing our ethanol capacity by 135 million gallons and redeploying the resulting capital to other strategic growth investments, we’re continuing the dynamic transformation of ADM’s business portfolio that we began a decade ago,” Luciano said. “We continue to execute on our strategic priorities, and we are excited about the opportunities ahead of us as we drive sustainable growth.”
Amit Bhandari, chairman and CEO of BioUrja, said the acquisition of the plant was an important step for the energy and agricultural commodity trader and supplier.
“As a leading supplier of biofuels, we are excited to enter into the bio-ethanol production sector and become more vertically integrated,” Bhandari said. “We are enthused about the growing beverage-grade and highly-distilled industrial alcohol markets, which are the focus of the Peoria plant, and are glad to absorb supplemental fuel ethanol into our existing supply capabilities.
“This is an opportunity for us to continue our growth in the renewables sector and participate in the global energy transition. It’s a double bottom-line deal for us because of the strong financial performance of the plant and its contributions to our ESG strategy.”
The transaction is expected to close in the coming weeks. ADM said it will work closely with BioUrja to ensure a smooth transition of the approximately 150 employees at the Peoria plant.
In 2017, ADM reconfigured the Peoria plant to focus on what Luciano described at the time as “the more profitable, higher-grade industrial and beverage alcohol, and also export fuel.”
The transition reduced the company’s ethanol capacity at that time by more than 100 million gallons.
ADM had put the Peoria plant up for sale in 2016 but pulled it off the market after failing to find a buyer.
The company has pivoted in recent months to investments in green diesel. In July, ADM announced plans to build a $350 million dedicated soybean crushing plant and refinery in Spiritwood, North Dakota, US.
“We expect the demand for US green diesel to continue securing a higher rate of growth, increasing by about 1 billion gallons per year and reaching up to 5 billion gallons by 2025,” Luciano said during a July 27 earnings call. “Vegetable oils will be a key feedstock to meet that growing demand, and when you consider that it takes about 7.5 lbs of soybean oil to produce 1 gallon of renewable green diesel, you can appreciate the large potential opportunity and why we are investing to grow our participation both in North Dakota and with our expanded oil refining capacity in Quincy, Illinois.”