Press Releases

Alltech receives incentive approval for rural community biorefinery

[Lexington, KENTUCKY] - Alltech is pleased to announce the first step for Alltech's vision for rural Kentucky and ultimately America.? Alltech is moving forward as it received approval from the Kentucky Economic Development Finance Authority (KEDFA) for financial incentives for its rural community biorefinery project, the first such model in North America that integrates feed, food and fuel production. The incentive is the first of its kind to be awarded by the Commonwealth.

The incentive will total $8 million and will be based on a sales tax refund for building and equipment costs, a state income tax wage reduction for new employment and a credit against state income taxes. Alltech will receive the benefits under the Incentives for Energy Independence Act, enacted during the Second Extraordinary Session of the 2007 Kentucky General Assembly.

"This project and technology could have far reaching implications, not just for the state but for the country as a whole," said Dr. Pearse Lyons, president and founder of Alltech. "Alltech is committed to the future of agriculture and making Kentucky a national leader in that area and this incentive represents a big step toward making that happen."

In addition to the above? funding and incentive schemes,? there is also a Department of Energy (DOE) grant application pending to further enable development in this exciting area is expected to be announced in February 2008. Thereafter the project will get under way.

As part of the DOE proposal, Alltech's rural community biorefinery will be the first in the United States to utilize cellulose, such as switch grass, corn cobs and corn stover, at levels up to 30 percent of its raw material for conversion to ethanol and other value-added products. The facility, estimated to cost approximately $40 million, will be located in Springfield, Kentucky and is expected to employ 93 people when operating at full capacity.

"This plant goes beyond a typical ethanol facility by utilizing Alltech's existing expertise in the area of Solid State Fermentation," said Governor Ernie Fletcher.? "It will enable Alltech to take fiber left from corn after producing ethanol and convert it into a usable product.? This is the kind of facility we envisioned when drafting Kentucky's Incentives for Energy Independence Act."

In addition to ethanol production, the biorefinery will have an impact on Kentucky's production agriculture by housing dairy and beef cattle to be branded under the Kentucky Proud label. Such actions could be a significant step toward addressing Kentucky's $250 million milk deficit and this concept has already drawn interest from the Netherlands, Ireland, South Africa and China.

The facility will also have the capability to produce algae, a plant that needs little besides sunlight and carbon dioxide. According to National Geographic, algae can theoretically produce 5,000 gallons of biofuel per acre per year, whereas corn can produce 400 gallons per acre.? Additionally, algae can absorb up to 450 tons of carbon dioxide per acre when grown commercially.

The biorefinery also presents an opportunity to forge partnerships with regional universities, giving students and faculty the opportunity to be actively involved with the state's emerging energy economy through research and development.? As part of the project's research component, Alltech will coordinate R&D activities with the University of Kentucky and the University of Cincinnati.? Researchers will work to identify and address process improvements, develop economically and environmentally-sound technologies, as well as use process simulation to reduce raw material costs and optimize energy utilization.?

The business strategy in proposing a Rural Community Integrated Biorefinery is to commercially proliferate the facility and license the technology for the construction of replicate plants in an additional 10 or more geographically separated rural locations. This approach has many other advantages along with the lignocellulosic feedstock conversion, some of these being:

(1) The time and technical uncertainty involved in a 10-fold design scale-up are avoided

(2) Replicates of the demonstration facility can be constructed and operational within 18 to 24 months

(3) The small scale, coupled with a process design that is flexible and self-tailoring to a variety of lignocellulosic feedstocks, is conducive to commercial application over a broad geographic area in rural environments

(4) Transportation and other infrastructure requirements are minimized compared with those associated with large-scale facilities

The incentive for the rural community biorefinery was given with the support of the Commonwealth of Kentucky, the Governor's Office, the Cabinet for Economic Development and the State Legislature.? Alltech also received approval for state incentives in 2006, which led to the construction of the industry's first Nutrigenomics Center due to open on December 6.

Alltech is the proud sponsor of the Alltech FEI World Equestrian Games 2010(TM) to be held at the Kentucky Horse Park September 25-October 10, 2010 and has its headquarters in Nicholasville, Kentucky.

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Photo Caption (l-r): Nathan Hohman, Vice President of Finance, Alltech; Dr. Talina Mathews, Executive Director, Governor's Office of Energy Policy; Robbie Rudolph, Secretary, Governor's Executive Cabinet; Dr. Pearse Lyons, President and Founder, Alltech; John Hindman, Secretary, Economic Development Cabinet