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Flint Hills to buy two Hawkeye ethanol plants in Iowa

Flint Hills said the facilities, including this one at Menlo, are "high-quality, second-generation" ethanol plants

Kansas chemicals company Flint Hills Resources is to buy two ethanol plants in Iowa for an undisclosed amount, it said this week.

The company, a subsidiary of Koch Industries, Inc., signed a deal on Monday to acquire plants in Menlo and Shell Rock, Iowa.

The facilities each produce up to 110 million gallons of ethanol a year, with 50 staff. Started up in 2008, the plants were formerly part of the troubled company Hawkeye Growth.

The acquisition deal agreed with Royal Bank of Scotland, the agent acting for Hawkeye’s lenders, is expected to close in September.

Flint Hills said it will conduct a full evaluation of each plant’s operations, but “does not anticipate making any immediate changes”.

“High quality”

Brad Razook, president of Wichita-based Flint Hills Resources, said: “These are high-quality, second-generation ethanol plants that are well-positioned to serve major U.S. fuels markets. Both Menlo and Shell Rock have highly valued, professional workforces, which was an important aspect of our decision to acquire these facilities.”

Flint Hills Resources already operates a fuel terminal in Iowa – at Bettendorf – and runs asphalt plants in Algona, Davenport and Dubuque.

The company says it is the largest purchaser of ethanol in Minnesota, where it has distributed fuels since the mid-1990s with a refinery near St Paul.

“This acquisition enhances our base business and allows us to compete more completely in the fuels market,” Mr Razook said. “It puts us in position to create value for our customers in a segment of the fuels market that is becoming increasingly important.”