California bioenergy company Biodico has opened a fully sustainable biofuel facility in Ventura County, California, with capital from high net worth individuals.
Equity financing for the $12.5 million project came predominantly from individuals, in addition to a grant from the California Energy Commission, Biodico president Russ Teall told Agri Investor.
The recently opened Biodico Westside Facility is the company’s fifth biofuel plant, and will use only renewable energy for its own power. Biodico’s strategy has been to build the facility and allow venture partners to buy out its stake once a project is proved viable. At the Westside Facility, however the company plans to stay on as the long-term operator, said Teall.
“There’s more profit to be derived by building and operating these facilities than by turning them over,” he said.
The company anticipates returns in the range of 15 to 30 percent depending on the level of federal and state subsidies approved for the plant. The facility will have an annual capacity of 20 million gallons of biodiesel, produced from a variety of feed-stocks, including used cooking oil, vegetable oil and animal fats, and an additional 3 to 4 million gallons of GBX, a precursor product that converts farm waste into biogas.
Biodico’s website says the company is targeting a Nasdaq IPO some time in 2016. Teall said the company has taken steps toward a public offering, but that such a move would only be made if it was the best way to grow revenues for the company.
“Our chief objective is to grow the company,” said Teall. “Whether that involves an IPO or not remains to be seen.”
Teall added he expects most of the fuel produced at the Westside Facility to be sold in the California market, thanks to demand driven by the state’s ambitious carbon emission reduction targets. California established a goal this year of reducing greenhouse emissions to 40 percent below their 1990 levels by 2030.
Biodico began producing biodiesel in 2000, under the name Biodiesel Industries. It rebranded as Biodico in 2010 to reflect its expansion into production of other biofuels.