Alchem ethanol plant in North Dakota heads for auction block

Harold Newman’s former Alchem Ltd., ethanol plant in Grafton, N.D., will be sold at auction on Sept. 29.

The plant was one of two ethanol plants to put North Dakota on the map in the business in the mid-1980s.

The sale marks an end to Newman’s first ethanol enterprise. The plant came on-line when the federal government was first offering incentives for ethanol in the wake of the 1970s energy crisis.

The plant started with potatoes, wheat, and then corn as a feedstock. It was a market for U.S. corn grown within 90 miles, and the dried distillers grains went largely to Canadian beef producers. Newman started with eight other investors but eventually bought them out, according to an Ethanol Producer article.

Steffes Auctioneers Inc. of Fargo describes the sale as a “two-day absolute auction.”

The plant and fixtures will be sold at 10 a.m. on Sept. 29, and the personal property items will sell Sept. 30, also at 10 a.m.

The Steffes website says the Alchem ethanol plant is reported to have a capacity of 9.5 million gallons. An industry trade publication said the plant produced 10.5 million gallons a year. Before it shut down it was producing 8.5 million gallons.

The company had more than 30 employees in 2007. Then, Newman had hinted about expanding to 18 million gallons a year, but instead he closed it because of high corn costs and low ethanol prices that October.

The plant is small in comparison to most modern corn ethanol plants, which typically are designed at 100 to 120 million gallons a year.

The oldest operating plant in the state now is at Walhalla, N.D., operated by Archer Daniels Midland as ADM Corn Processing, at 28 million gallons per year.

Alchem started as a potato flake plant in 1983 by Borden’s and was converted to an ethanol plant in December 1985.

Millions of dollars were been spent to upgrade the plant with automated systems, particularly with the coal-fired boilers and steam generating system.

The 111,000-square foot structure, a total of all of the buildings, includes a scale building, office, dryer section and heated shop, dry distillers grain building, fermentation area, distillation/evaporation area, coal shed, with more than 700 tons of coal, cook room, boiler room, grain unloading building, storage and unloading building.

A portion of the building caved in because of snow in 2009/2010, but the property is being sold in its present condition.

Wastewater at one time was a problem for the plant, but it now has a back-up lagoon system a mile north of the facility, and those lagoons are included in the sale.

source: grandforksherald