Shuttered biodiesel plant in Crawfordsville to be auctioned

A four-year-old biodiesel plant in Washington County that has been closed since 2009 will be placed on the auction block April 12.

Riksch Biofuels of Crawfordsville joins a growing list of biodiesel plants being auctioned off to satisfy creditors.

The biodiesel industry has suffered a series of setbacks, including high prices for soybeans - a primary ingredient for manufacturing biodiesel - and a lengthy lapse in a federal tax incentive for biodiesel, which was extended retroactively at the end of 2010.

Riksch Biofuels closed before the tax incentives lapsed, but high soybean prices did not help its cash flow situation, according to Vice President Brad Ray of Monmouth, Ill.-based Midwest Bank of Western Illinois, which is having the plant auctioned.

“The economics of the plant, from planning to inception, kind of got turned on its ear,” Ray said. “They were dumped in reverse in every way possible, and the company had limited working capital.”

Midwest Bank of Western Illinois provided a construction loan to Riksch Biofuels and later received a 80 percent USDA loan guarantee. Ray said Riksch was the only biofuels investment for Midwest Bank of Western Illinois, although it also has investments in some ethanol plants.

“It (renewable energy) is certainly an industry we believe in as a bank,” Ray said.

Ray said the bank has received some interest from potential buyers in acquiring the plant and continuing to operate it with a different feedstock than soybean oil. He said the plant is equipped so that it can produce biodiesel from animal fat or used cooking oil.

Riksch Biofuels closed in March 2007, only 15 months after manufacturing its first ASTM 6751 biodiesel.

Maas Companies of Rochester, Minn., will auction the plant. The entire facility will be available for purchase with real estate and all equipment before the auction, the company said. The Crawfordsville facility is well equipped to remain a biodiesel facility, or its indoor “tank farm” could be modified for a fuel or oil distribution and storage facility, the company said.

At the auction, bidders will be able to bid separately for plant real estate and various types of equipment and machinery.

The auction will take place at 11 a.m. April 12 at 3187 320th St., Crawfordsville, with viewings planned from 10 a.m. to 5 p.m. on March 22 and April 11, and from 9 a.m. to 11 a.m. on sale day.