Biodiesel plant changes name to REG Newton

The Central Iowa Energy biodiesel plant in northeast Newton is now REG Newton. Renewable Energy Group in Ames announced the completion of asset purchase and consolidation agreements with the commercial-scale biodiesel plant in Newton, as well as Blackhawk Biofuels in Danville, Ill., on Tuesday. The consolidation makes REG the largest wholly-owned biodiesel manufacturing and marketing source in North America.

Shareholders with Central Iowa Energy and Blackhawk Biofuels voted in late February to an all-stock transaction, making their facilities wholly-owned by Renewable Energy Group. The Newton facility’s 30-million gallon per year capacity and Blawkhawk’s 45-million gallon per year capacity brings REG’s manufacturing capacity to 122 million gallons yearly.

REG’s chairman and chief executive officer Jeff Stroburg, in a press release issued Tuesday, cited demand by major petroleum distributors and oil refiners as a key factor in the decision to move forward with plant consolidation. The consolidation transactions were originally announced by REG in May 2009.

REG’s SEC registration took effect on Jan. 19, 2010.

“With the Renewable Fuels Standard (RFS) now in effect, the distillate market is demanding technical expertise, dependable supply, more efficient distribution and creative pricing options from major biodiesel partners,” Stroburg said.

Daniel Oh, REG’s president and chief operating officer said the process of consolidation has been a complex one, bringing together boards of directors, legal teams, accounting teams, financial partners and shareholders. He said this was a particularly difficult time for the industry, referring in part to the lapse of the federal blenders tax credit and original delay of the Renewable Fuels Standard.

“We believe this consolidation brings greater economies of scale, streamlined central management of complex ligistics and decision-making processes, and enhanced risk-management opportunities for these two new wholly-owned REG facilities as they join REG’s other wholly-owned facilities,” Oh said.

In addition to the Newton and Danville facilities, the REG network also includes plants in Ralston and Algona, Iowa, and Houston, Texas.