Renewable Energy Group Inc. has struck a deal worth as much as $65 million with Tyson Foods Inc. to buy its stake in a company that turns animal waste into biodiesel fuel, the companies announced Wednesday.
The Iowa-based biofuel producer already has worked out a deal to acquire the other half of Dynamic Fuels LLC with its pending move to buy most of the assets of Syntroleum Corp.
“Upon closing, this is another milestone for REG (Renewable Energy Group) in growing our core advanced biofuels business,” CEO Daniel J. Oh said. “It gives us the opportunity to further expand our production capacity into new product lines, while growing our overall advanced biofuel manufacturing capability and bringing on other renewable chemical applications.”
Tyson and Tulsa-based Syntroleum formed the Dynamic Fuels joint venture in 2007, opening a plant in Louisiana in 2010 capable of producing up to 2,500 barrels of renewable fuel a day. The plant uses Syntroleum’s Bio-Synfining technology to produce renewable fuels from nonfood grade animal fats produced or procured by Tyson, such as beef tallow, pork lard, chicken fat and greases.
The Dynamic Fuels plant has been plagued by mechanical issues, hydrogen supply disruptions and feedstock impurities since commercial operations began, resulting in higher-than-expected costs and operating losses, according to Syntroleum’s quarterly report filed earlier this month. It has been shut down since a maintenance turnaround in December 2012.
Dynamic Fuels had sold 66.9 million gallons of renewable products such as diesel, naphtha and liquefied petroleum gas as of March 31, the report states.
“Selling our interest in Dynamic Fuels to REG provides capital for Tyson to redeploy into other opportunities,” said Andrew Rojeski, vice president of renewable energy for Tyson Foods. “REG is a long-term customer of ours, buying fats, oils and greases to make renewable fuel, and we hope to continue that relationship.”
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Selling our interest in Dynamic Fuels to REG provides capital for Tyson to redeploy into other opportunities. REG is a long-term customer of ours, buying fats, oils and greases to make renewable fuel, and we hope to continue that relationship.”
Vice president of renewable energy