Enzyme firm plans to double the ethanol related plant near Blair

As the ethanol industry struggles, a Danish company plans to double the original size of its ethanol-related plant near Blair, where it will hold a groundbreaking ceremony today.

The long-term outlook for fuel is strong, said the head of Novozymes A/S's North American division, not only for ethanol made from corn but also for ethanol made from corncobs, stalks and, before long, "energy crops" such as switch grass.

He calls the current ethanol slump a "speed bump" that will give way to rapid growth in making ethanol from cellulose in addition to grain.

"It's going to be a big wave over the U.S.," said Lars Hansen, president of Novozymes North America. "It will create a lot of jobs, providing a road toward energy independence and reducing greenhouse gases. We'll have the technology ready for that in 2010."

That's when Novozymes expects to begin production at what will be a $200 million plant on a 30-acre site near First and Sheridan Streets on the southeast edge of Blair, making millions of gallons of liquid enzymes used by ethanol companies to produce fuel.

Cargill Inc.'s nearby ethanol plant is a potential buyer of Novozymes' enzymes and one of the reasons the Danish company chose Blair as the plant site. Cargill also could supply raw materials used to make enzymes.

The 4 p.m. groundbreaking will include company executives, the crown prince and crown princess of Denmark and Nebraska Gov. Dave Heineman.

In the past few months, cheap crude oil has pushed gasoline prices below $2 a gallon and dampened ethanol demand and grain prices. Just last week, a federal bankruptcy judge approved the sale of most of ethanol giant VeraSun Energy Corp.'s assets, including three plants in central Nebraska.

Some companies have encountered trouble financing their ethanol plants, but Novozymes is financing its own project at a cost between $160 million and $200 million.

"In the long term the world is running out of energy," Hansen said. "The U.S. is going to want energy independence and more environmentally friendly solutions."

SOURCE: tradingmarkets