Home » NEWS » Ergon, Bunge North America building state-of-the-art plant

Ergon, Bunge North America building state-of-the-art plant

VICKSBURG — An ethanol plant being built in this historic Mississippi River city will be part of the solution to America’s search for more renewable energy and less dependence on foreign oil. Flowood-based Ergon and Bunge North America, one of the nation’s leading agribusiness firms, have joined forces to build the largest ethanol plant in the southeastern United States in the Vicksburg Industrial Harbor. Ground was broken last month for the facility and production is expected to begin in November or December 2007.

Ethanol, made from ground corn, can be mixed with 15% gasoline to make an alternative fuel that many vehicles can use. It is also in demand as a gasoline additive. The state-of-the-art plant will have an annual capacity of at least 60 million gallons, producing a clean-burning fuel that will require 21 million bushels of corn or more each year, creating new markets for regional corn growers. It will also generate corn-based co-products which are excellent feed ingredients for area poultry and livestock.

The facility will provide a key link between handling facilities in Mississippi and Louisiana and Ergon’s petroleum refining assets. It is Ergon’s first investment in renewable energy, according to Don Davis, executive vice president, but the energy company has been studying production of ethanol and other renewable fuels for several years.

“The Energy Policy Act of 2005 created a renewable fuel standard that requires petroleum refiners to either physically use their proportionate share of renewable fuels in their product slate or purchase credits from refiners that do physically use them,” he said. “We recognized that this would create a new paradigm for the use of renewable fuel. Our studies of renewables have shown us that ethanol was the lowest cost and therefore more viable of all renewable fuels.”

In addition to the benefits of turning corn into fuel, the plant will have an economic impact, but Davis says the company has not yet run an economic impact model on this investment with specifics from the project. “However, we expect to be doing that soon with the assistance of the Mississippi Development Authority,” he added. “We expect the impact to be very positive and significant.”

Between 120 and 180 people will be employed in the construction of the plant with 32 to 34 employees after it goes into production. “There will be numerous people working in transportation of the feedstock corn that will be delivered to the plant and the products (ethanol and dry distillers grain) taken away from the plant,” Davis said.

He said Ergon and Bunge North America will make excellent partners in ethanol production because the two companies can leverage their strengths to do something that they could not do as well without each other. The St. Louis-based Bunge North America is a large factor in agribusiness worldwide and is particularly strong in the Southeastern states in corn purchase, storage and resale.

“They have expertise in marketing to animal feed producers and animal nutrition,” he said. “Bunge will be the marketing agent for dry distillers grain and the agent for the purchase of corn. Ergon has a strong position in marketing, storing and distributing petroleum products in the Southeast as well as petroleum refining. These technical skills will add value to the process of turning corn into ethanol.”

Ergon’s subsidiary, Ergon Ethanol Inc., will be the exclusive marketing agent for the ethanol produced at this plant, which can be distributed by barges on the Mississippi River and the Intercoastal Waterway.

“Currently, a large market for ethanol is open in the Houston, Texas, area and this plant can deliver ethanol there with lower freight costs than Midwest plants that depend on rail transport,” Davis said. “Ethanol can also be loaded on rail cars and truck trailers for sales nearer the plant. The dry distillers grain, which is a co-product with the ethanol, will be sold mostly to Mississippi animal feed producers.”

Tim Gallagher, senior vice president of Bunge North America, said the firm is a leading grain originator in North America with a strong domestic network of elevators on the Mississippi River and its tributaries.

“Our relationships with farmers and our experience in grain origination and merchandising will ensure that the new venture has a ready supply of corn,” he said. “Ethanol production will also bring new feed ingredient opportunities for our poultry customers.”

U.S. Sen. Trent Lott called the plant’s groundbreaking a milestone moment and a bright, promising day for the state and nation. “Soon it will be turning bushels of corn into gallons of fuel for our cars and trucks,” he said. “It will be a self-sufficient operation without any government subsidy.”

He said the country must become less dependent on unstable foreign countries for energy. “If we fail to find more domestic energy resources, we’ll be importing almost 80% of our energy from foreign sources by 2025,” he said. “That’s scary, and it could prove devastating for our economy.”

The senator added that the ethanol plant will be particularly good for rural farmers with the potential to use more than half of Mississippi’s annual corn crop. “As America begins to fully enact ethanol production with plants like this, it’s estimated that more than a quarter of the nation’s corn crop could be used for fuel, giving farmers a huge new market,” he said.

Ergon was founded in 1954 as a petroleum retailer with two employees. It has evolved into a network of diverse companies employing more than 2,500 people. Today, the company is involved in refining and marketing, asphalt emulsions, transportation and terminaling services, oil and gas operations, embedded computing and real estate development.

Bunge North America is a vertically integrated food and feed ingredient company, supplying raw and processed agricultural commodities and specialized food ingredients to a wide range of customers in the livestock, poultry, food processor, foodservice and bakery industries. The company and its subsidiaries operate grain elevators, oilseed processing plants, edible oil refineries and packaging facilities and corn dry mills in the U.S., Canada and Mexico.

Contact MBJ contributing Lynn Lofton at llofton656@aol.com.


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