May 24 (Reuters) – Gevo Inc started production at a
converted ethanol plant in Minnesota, bringing on line the
world’s first commercial-scale facility to make advanced
biofuels and renewable chemicals. Shares rose more than 9
percent.
Gevo said it had flipped the switch on the plant, which will
produce isobutanol from corn starch, on Wednesday and it expects
to ship the first rail cars of the chemical to its customer
Sasol around the end of June.
Sasol will use the isobutanol as a feedstock in its chemical
products, although the organic compound can also be used as an
alternative to gasoline.
Chief Executive Officer Patrick Gruber told Reuters the
company would begin production slowly at the new facility
located in Luverne, Minnesota and planned to increase output to
about 1 million gallons per month around the end of the year.
In addition to the isobutanol sales, Gevo will sell the corn
by-products into the animal feed market.
Gevo retrofitted the ethanol plant to use its own yeast and
fermentation technology to produce isobutanol. The company is
currently engaged in a legal dispute with Butamax, a joint
venture of BP Plc and DuPont over the technology.
The company is planning to start another larger facility in
Redfield, South Dakota next year.
Investors, who have been wary of shares in the new advanced
biofuels makers, welcomed the news pushing its share price up
9.5 percent to $5.86 per share on the Nasdaq.
Analysts have attributed some of that market wariness to the
company’s plan to raise an estimated $75 million to $100 million
around mid-year.
“We still have to raise money this year, and it’s question
of when we pull that trigger,” Gruber said.
© Thomson Reuters 2012 All rights reserved
