POET to invest $5 million in Cloverdale plant

A new process to remove corn oil from the byproduct of ethanol production is moving POET Biorefining to make a $5 million investment in its Cloverdale production facility.

The Putnam County Council gave its blessing on a seven-year tax abatement for the investment during Tuesday evening's monthly meeting.

POET plant manager Dave Brooks and Greencastle/Putnam County Economic Development Director Bill Dory made the request and explained some of the process to the council during the meeting.

"POET is always looking for ways to make our co-products better," Brooks said.

As production currently works, the starch from corn is used to produce ethanol, with the remaining corn product ground and sold as livestock feed, which POET markets as Dakota Gold.

The new process will add a middle step in which corn oil is extracted from the byproduct before it is processed into animal feed.

The extracted corn oil can then be used in the production of corn diesel fuel.

POET is moving quickly on installation -- Brooks expects to be producing corn oil at the facility by the first week of December.

The project will not create any new jobs, but should help with the retention of 47 employees. Brooks said this summer's drought and the resulting low yields and record high corn prices have not been easy on the industry, making new processes like this even more important to the company's plans.

Additionally, 18 POET plants already have a similar process, so many of the bugs have already been worked out of the operation.

The abatement will result in a seven-year phase-in of property taxes on the new equipment. During the period, an estimated $120,000 in taxes on the equipment will be collected.

As an illustration of the amount of tax revenue the biofuel plant has brought into Putnam County, Dory presented the following information: For 2011, $220,393 in property taxes was collected on the property. For 2003, the year before former owner Altra Biofuels built the plant, collections on the property were $4,469.