Gevo Enters into Joint Venture with Redfield Energy
News Jun 17, 2011
The retrofit is expected to commence by year end 2011, and Gevo expects to begin commercial production of isobutanol at the facility in the fourth quarter of 2012.
“This transaction demonstrates the attractiveness of our joint venture model for potential partners. Isobutanol production creates more value, and across diversified markets. Our partners see that and value it,” reflected Patrick Gruber, Ph.D., CEO of Gevo. “Redfield is an exceptionally well-run and profitable plant. We appreciate the vision and leadership of the Redfield board and its cooperative membership and look forward to working with them on this business.”
Gevo will provide the technology and capital necessary to retrofit Redfield’s existing 50 MGPY ethanol facility and, in exchange, will receive an equity interest in Redfield. This JV validates the attractive economics for both Gevo and Redfield and is consistent with Gevo’s business plan.
“Isobutanol provides an excellent opportunity to expand our potential markets, improve our profit margins and create a more predictable and sustainable business,” said Tom Hitchcock, CEO of Redfield. “We are very happy to be working with Gevo to upgrade our facility to a second-generation biorefinery.”
Gevo broke ground on its first plant retrofit on May 31, 2011 in Luverne, MN, and is expected to bring its isobutanol capacity online in the first half of 2012. The Redfield plant will become Gevo’s second production facility and is expected to bring total annual isobutanol capacity for 2012 to approximately 60 MGPY. In May 2011, Gevo announced a letter of intent for its third plant, also a JV, for an additional expected 50 MGPY of isobutanol production. Gevo plans to have approximately 110 MGPY of isobutanol capacity online in 2013.