August 14, 2013 10:51:50 AM
KiOR officials say they are considering building a second plant next to the current facility in Columbus.
The news came late last week when Fred Cannon, the Texas-based alternative fuel company's president and CEO, took part in a conference call to announce the year's second quarter financial results for the biorefinery.
The company's initial plan was to get the first Columbus site -- a 500-ton per day facility located at the Island -- up and running before beginning construction on a bigger, 1,500-ton per day facility in Natchez.
The Columbus site, a Biomass Fluid Catalytic Cracking Unit, began converting wood chips to fuel earlier this year. What the company has learned from getting that plant going has officials thinking of building a second plant in Columbus before moving ahead with its plans in Natchez.
"In essence, this alternative would involve the construction of a second 500-ton per day facility adjacent to our existing 500-ton per day facility in Columbus," Cannon said. "While we are still in the early stages of evaluating this option, we are excited about this alternative."
After getting the first Columbus site going, Cannon said the company has a better understanding of its plant operating efficiency and incorporating that knowledge into a second identical plant would serve to enhance reliability and yield at the facilities, as well as reduce cost and time for design and construction.
At the same time, the company has seen potential developments of new feedstocks.
"We are beginning to see traction on the commercial development of feedstocks other than Southern Yellow Pine, including hardwood, energy crops and waste products such as used railroad ties, all of which we expect to be able to produce at lower prices without negatively impacting the overall growth to drain in the basin," Cannon said.
Constructing a second plant in Columbus could "allow us to be cash-flow positive more quickly," Cannon said.
Preliminary figures suggest the second plant would cost $175 million to $225 million to build. The Natchez facility, Cannon said, will cost between $560 million and $600 million but KiOR is still ironing out design plants for the potential Adams County site.
"This quarter, our goal is to make a decision -- do we do Columbus Two first, get us to a cash flow positive position in the company much sooner...then do Natchez? Or do we do Natchez first?" Cannon said.
He said KiOR will continue to evaluate both alternatives in coming months and have a "clear plan forward by the end of this quarter."
The current Columbus plant employs about 100 people. With the second plant only a possibility at this point, officials could not offer how many people would be employed.
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