With $21 million in shares held by local investors and $32 million by an Irish corporation, this week Plymouth Energy, LLC announced the completion of the $97.9 million financing to start construction of a 50-million gallon plant north of Merrill.
The Irish group, Fleming Holdings USA of Cork, Ireland, has been part of the picture since December, according to David Hoffman, chairman of Plymouth Energy.
"We had one of our advisors in Minneapolis had a mutual friend looking to invest in renewable fuels in the U.S.," Hoffman said. "They looked at several sites and several projects, and chose Plymouth Energy as the most likely to succeed."
The Merrill plant is Fleming Holdings USA's first step into biofuels although they are not new to energy investments.
"They put up one of the first wind farms in Ireland," said Craig Arnold, chief executive officer of Plymouth Energy, LLC.
John Fleming is the chairman and president of Fleming Construction, owner of Fleming Holdings USA. Jim Galvin is the general manager of Fleming Energy. Michelle Fleming, John's daughter, is a director of Fleming Group. Fleming Construction does about $515 million in business a year, according to Arnold.
"They're very good people," Hoffman said. "John Fleming was a farmer, then got into construction in a big way."
He said the group had been looking at renewable fuel investments in Europe, but the only place they found they felt had a sustainable supply was in Ukraine, and they did not feel comfortable investing there due to the political situation. Both John Fleming and Galvin have made several trips to the U.S. to work with Plymouth Energy.
"As a large investor but more than 4,000 miles of ocean away, they wanted to know us, and we wanted to know them," Arnold said. "We wanted to know if our values and theirs lined up, and they did very nicely."
Hoffman pointed out that while Fleming Holdings USA have invested $32 million, they do not have voting control of Plymouth Energy. John and Michelle Fleming and Jim Galvin will be members of the board of directors, bringing the total to eight directors.
"We will decide thing on a two-thirds vote. We still have local control," Hoffman said. "And that was John Fleming's goal -- to see the support completed but not have control of the company."
The senior loan partner, with a commitment for $45 million in debt financing, is Chad Gent, v.p. Farm Credit Services of America of Omaha.
Plymouth Energy received their letter of commitment on Wednesday, and Hoffman said they'd been working together for the past eight months.
"As our senior loan partner, they'll administer the loan, which includes several banks -- Farm Credit Services, Co Bank, Ag Star and a host of local banks."
Local banks involved include Primebank, Premier Bank, Iowa Prairie Bank, Iowa State Bank, American Bank and Coop Credit.
The $21 million in local dollars comes from 330 investors -- Hoffman said primarily farmers from the area plus other businesses and families.
"About 95 percent are from northwest Iowa," he said.
The founders of the plant also invested $3.55 million.
Plymouth Energy announced the completion of their fund drive Wednesday in Le Mars at the first annual meeting of shareholders. They are the first of three planned ethanol plants in Plymouth County to announce the completion of their capital drive.
"We're elated," Hoffman said. "We're happy to be going forward and look to be a great asset to Plymouth County. We'll create good quality jobs and support the farm markets."
Construction should start in earnest within a couple of weeks, Arnold said.
"The Merrill plant's commencement date was March 15, 2007 and its substantial completion date is May 15, 2008," he added. "We have provided notice to Agra Industries, our contractor in Merrill, and we anticipate that they will mobilize in the next few weeks."
The plant, once completed, will create 35 local jobs, 23 which must meet standards for Iowa's high quality job program for Plymouth Energy to receive tax incentives.
Plymouth Energy's aim, Hoffman said, is to bring in about $150 million a year. Their main loan is on a ten-year payback plan, but they hope to pay it back sooner, he said.
The plant will pull corn from a 40-60 mile radius, Hoffman said.
"Five percent of the corn in the U.S. is grown within 50 miles of Merrill," he added.
The plant will be located on county road K-42, about half a mile north of Merrill.
"We've had a lot of support from the mayor and city council of Merrill, and really good support from the citizens of Merrill," Hoffman said. "Our goal is to make this business one the county can really be proud of."
Plymouth Energy's board of directors includes Hoffman, John Becker, Greg Popkes, Rob Plendl, Dave Bierman, and soon John and Michelle Fleming and Jim Galvin of Cork, Ireland.