Less than a year after pumping out the first gallon of ethanol, Exol has decided to double the flow.

Thursday, September 09, 1999

Less than a year after pumping out the first gallon of ethanol, Exol has decided to double the flow.

The cooperative’s members voted Wednesday to proceed with their board’s plans to double the plant’s production.

&uot;It’s very exciting,&uot; said Exol President Gary Pestorious.

With 280 of the group’s 500 members voting unanimously for the change, the plant executive board will proceed with plans to secure the $16 million needed for construction.

Pestorious said they already have a verbal agreement for financing.

&uot;It’s actually the same lender that would have been our original lender,&uot; he said.

While the lender backed out of financing the original plant, Pestorious said an agreement is being worked out for the bank to cooperate with Stearns County Bank, the lender for the original $21 million project.

&uot;According to the last conversation we had with them, it’s a go,&uot; he said of the new lender.

He said he’s not worried about past problems with obtaining financing. Things are different now.

&uot;We have a plant; we have a track records and we have cash flow,&uot; he said.

Additionally, he said terms will be different. Instead of taking the $16 million all at once, Exol will simply gain access to what is needed as planning and construction proceeds during the next 15 months.

Another change, however, will be pumping the next 15 million gallons of ethanol without state subsidies. The Minnesota Producer Payment is capped at 15 million gallons.

Pestorious said that shouldn’t be a problem since there’s a demand for the product and larger production comes without doubling price.

&uot;A bigger plant actually cash flows better than a smaller one,&uot; he said.

With a doubling in size, Pestorious said the Glenville plant will likely begin pumping out an annual 30 million gallons of ethanol by March of 2001.

The plant is already running at full capacity, 125 percent of earlier projections.

&uot;15 million gallons is wide open,&uot; he said.

The doubling of size will also mean a need for more corn. While the plant is currently processing 5.5 million bushels a year, it will increase to 11 million with the expansion.

Pestorious said that shouldn’t be a problem, since shareholders have already committed that much grain. He said the change simply means farmers will start bringing all their committed corn to the plant in 2001.

&uot;We’re going to try to add value to twice as many bushels,&uot; he said.

He added that the Exol plant isn’t the only one expanding. Several Minnesota ethanol plants are doubling size.

As for current production, Pestorious said all is going as planned.

&uot;Everything is working real well,&uot; he said.

And, it will keep going well during construction, which will start after an estimated five months of engineering and permitting. Pestorious said the plant will not be shut down during new construction, since most of the needed pipe is already in place.