US' Archer Daniels Midland to build new ethanol plant in Iowa

New York (Platts)--10May2006

Large US ethanol producer Archer Daniels Midland will build a dry corn
milling plant with an annual capacity of 275 million gallons in Cedar Rapids,
Iowa, as part of a two-step project to boost its output of the gasoline
additive, the company said Wednesday.

The cost of the plant, to be built adjacent to an existing corn
processing facility, was not disclosed. The company said it expected the new
plant to be in operation in the second half of 2008, pending government
approvals.

ADM previously announced plans to construct a corn milling plant in
Columbus, Nebraska, also with a capacity of 275 million gallons/year.

"Biofuels are an important part of America's current and future energy
mix, and we believe it is important to invest in expanded ethanol production
to meet growing demand," Edward Harjehausen, ADM's senior vice president for
corn milling and bioproducts, said in a statement.

Corn is the primary feedstock for ethanol produced in the US.

The federal mandate requiring the use of an oxygenate in gasoline expired
Monday, meaning refiners no longer need to blend their product with MTBE, a
suspected carcinogen that has been found to leak from underground storage
tanks into drinking water supplies.

Makers of MTBE were not granted a liability waiver in last year's energy
bill, further discouraging use of the chemical.

But with refiners still needing an oxygenate to boost the octanes in
gasoline, ethanol has become the preferred replacement to MTBE.

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