07/17/11 — Biofuels company eyes Mount Olive site for plant

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Biofuels company eyes Mount Olive site for plant

By Steve Herring
Published in News on July 17, 2011 12:14 AM

MOUNT OLIVE -- The town's industrial park is one of two sites being considered by an international company for a $160 million pioneering technology ethanol biofuels plant that would create 65 new and mostly local jobs with average salaries of $48,415.

The site selection could be made this month.

County and company officials declined comment on the specifics of the site and their nregotiations since they have yet to be discussed in public. However, a company official confirmed that the industrial park is a potential site for the facility.

"We have definitely looked at Mount Olive as a possible site," said Allana Whitney, project manager for Chemtex International. "Chemtex worked with N.C. Southeast Economic Development and N.C. Eastern Economic Development to identify sites in the Duplin, Wayne, and Sampson County region that met our site requirements (such as rail access)."

Chemtex and its parent company, M&G, are building a facility in Italy that will use the same technology to convert high-energy grasses into ethanol. Founded in 1958, Chemtex has a location in Wilmington.

It was the abundance spray fields used by swine producers to disperse swine lagoon wastewater that make the area so attractive for the project, Ms. Whitney said.

The company has an informal agreement with major companies such as Murphy Brown, Prestage and Goldsboro Milling to commit a certain tonnage of raw materials from the spray fields.

The proximity of the spray fields to the plant will be a deciding factor in site selection because of transportation costs, Ms. Whitney said.

"As part of our process to obtain financial closing, we would need to have contracts in place for the supply of the feedstock," she said. "We anticipate financial closing taking place around March 2012."

Ms. Whitney said there is not a large market for the Bermuda grass that is now grown on the spray fields. That grass would be replaced by high-energy species of grasses. The farmers could harvest the grass and sell it to Chemtex or the company could harvest it directly, she added.

The grass would be used instead of the traditional corn to create ethanol.

There are 100,000 acres of spray field for hog lagoons in Wayne, Duplin and Sampson counties producing about 300,000 dry tons of raw materials annually, Ms. Whitney said. Depending on the type of grass grown, Chemtex would require only 30,000 acres, she said.

The feedstock will be delivered by truck, and the ethanol product will be shipped out via rail & truck.

Even if Mount Olive is not selected, southeastern North Carolina and northeastern South Carolina are still good locations for what she expects will be a proliferation of the plants in coming years, Ms. Whitney said.

Chemtex has applied for funding through the USDA 9003 Advanced Biofuel/Bioproduct Loan Guarantee Program that goes to companies to help jump-start such ventures.

It will be September before the company knows if its application is successful. Ms. Whitney said the company hopes to have all of the financing finalized before March of next year. However, in order to do so it must have the land.

"I think December is a possibility (to have the land)," she said.

Construction would start July 2012, would last 18 months, with the plant becoming operational in January 2014.

The company originally looked at sites in Wayne, Duplin and Sampson counties as well as in other states.

"The two areas that we most focused on were Wayne and Sampson counties," she said.

She declined comment on whether the Mount Olive site was a viable contender to the 166-acre Sampson County site that is located just outside the Clinton town limits.

However, the Sampson County Board of Commissioners last week voted unanimously to offer a performance-based incentives package for Chemtex.

"Since the incentives with Wayne County have not been discussed in a public forum, I am not able to provide details," Ms. Whitney said. "But I can say that the Sampson County and Wayne County incentive offers are comparable."

It is not the first time that Mount Olive has courted a biofuels facility. A company had looked at developing a plant on a site across the Old Mount Olive Highway from the Mt. Olive Pickle Co. distribution center. However, height restrictions because of the nearby airport forced the company to look at a site on Northeast Church Road.

The plans fell through and the project was never developed.

While it has not been directly linked to the Chemtex proposal, the Development and town of Mount Olive are splitting the cost of a $60,000 study of the town's water system.

Also, during a March meeting of the town's Compre-hensive Land Use Planning Committee, Mayor Ray McDonald Sr. said an industry that has been looking at Mount Olive had indicated it would require a steady stream of truck traffic.

In his motion to enter the agreement with the county, Commissioner Gene Lee said the study would "... ensure that water needs of existing and future businesses and industries can be met."

The improvements would focus around the town's No. 3 well on Northeast Church Road, indicating that the area being considered is north of town in the general vicinity from the Mt. Olive Pickle Co. Distribution Center to the industrial park on the Old Mount Olive Highway.

Town officials said the improvements would make the area more attractive to a business or industry.

The agreement was approved at an April special town board meeting that was the continuation of an earlier meeting that was recessed following a one-hour closed session held to discuss industry/business relocation or expansion.

The study must be completed before the town can receive a $2 million grant/loan from the state Drinking Water Revolving Trust Fund.