By Mary Gales Askren, Staff Reporter, courtesy of Madison Daily Leader
Construction is currently under way for a $13.6 million expansion at Dakota Ethanol, LLC, south of Wentworth.
The plant went online in 2001 and has been producing around 50 million gallons of ethanol annually, according to CEO and General Manager Scott Mundt. With the expansion, the ethanol plant will increase production to 90 million gallons annually.
"It's a significant expansion for us. It's pretty exciting," Mundt said.
When the plant was built, it was considered the largest in North Dakota, South Dakota and Minnesota -- and the eighth largest in the nation. Now, according to the Renewable Fuels Association, five plants in South Dakota alone produce more than 100 million gallons annually, and corporations such as Archer Daniels Midland Co. have plants in several states that produce 300 million gallons.
The scale of the operation affects profits, according to Mundt.
"He who has more gallons has more profits," he said.
The company has been working with a Sioux Falls company, Nelson Engineering, on the project. According to its website, Nelson Engineering provides engineering, procurement, construction and contracting services to the biotech industry, including ethanol.
Mundt explained that by increasing the scale of production, the plant will increase profits by improving operational costs.
"Our goal is to return maximum profits to our investors," Mundt said. With the expansion and increased production, the plant will increase the amount of corn needed from 17 million bushels to 31 million bushels. Most of it will come from the surrounding area -- within a radius of 20 to 30 miles, according to Mundt.
Producers will find that the increased traffic has been taken into consideration in planning the expansion. A third scale is being added to ensure they will not have long waits.
"We have a commitment to customer service, both to our corn producers and to our feed customers," Mundt said.
The expansion includes cooling towers, tanks for fermentation and the latest technology -- which is one reason the expansion will bring only a modest increase in jobs for the area. By installing the technology in conjunction with an expansion, the company is able to reduce operational costs without sacrificing jobs. Currently, Dakota Ethanol employs 39 people.
"I have a good, strong employee base with low turnover," Mundt said.
When the facility was first built, Lake Area Corn Processors, LLC, the investor group, sought support from Lake County for site development. By declaring the site a Tax Incremental Financing (TIF) district, the county essentially funded site development through the sale of bonds which mature this year. The county, Chester Area School District and other entities supported with property tax revenue will see an increase from this project for the first time in fiscal year 2019.
Dakota Ethanol is funding this expansion with traditional bank financing and with operational cash, according to Mundt. A tax increase will not be seen by the county or other entities until fiscal year 2020.
The plant expects to increase production next spring. Mundt said the increase will not be implemented incrementally, but will simply step up from 50 to 90 million.