An affiliate of a major Michigan agribusiness is purchasing a grain storage and processing facility in Riga Township in a move that could be a win for the local ethanol industry.
ZFS Riga LLC, an affiliate of Zeeland Farm Services Inc., confirmed to Michigan Farm News it had closed on a July 1 deal to acquire Valero Energy’s Riga facility, which stopped accepting grain in 2019. ZFS Riga will hire up to eight employees initially and up to 45 employees if its corn processing operation restarts. Terms of the deal weren't disclosed.
The Riga facility, now named ZFS Riga LLC, is situated on 137 acres. It can store roughly 2.3 million bushels of grain and is the former home to a cold-idled corn processing facility that crushed 19 million bushels of corn for ethanol production, distiller’s grain, and corn oil.
“ZFS Riga has begun rehabilitating the grain receiving, storage and shipping areas of the site,” Gary Brower, a spokesperson for ZFS Riga, told Michigan Farm News. “The corn processing portion of the facility has not operated in about five years and is obsolete without rehabilitation. Currently, the plant is not competitive in the industry.”
ZFS has a history of purchasing idle ethanol facilities, including a Clearfield, Pennsylvania, facility in 2012 which can process up to 40 million bushels of grain per year into 110 million gallons of ethanol and 330,000 tons of dry distiller’s grain with solubles.
Similarly, ZFS’ affiliate grain facility in Cambridge, Nebraska, can process 17 million bushels of corn per year and more than 50 million gallons of ethanol.
ZFS Ithaca LLC, another affiliate, came online in 2020 to increase soybean processing capacity and create shorter call times for farmer-customers.
Zeeland Farm Services Inc. is a diversified, 74-year-old agribusiness based out of Zeeland. Its primary divisions are in soybean processing, vegetable oil refining, grain and ingredients storage and merchandising and seed.
"We are excited about the future potential at the Riga facility,” Brower said.
“Grain receiving and storage are a start. We are also optimistic that a competitive business plan can be put together on corn processing. If that can be accomplished, we are even more excited about what the positive impact could be for the community, similar to what we accomplished with our project in Ithaca, Mich.”
ZFS Riga LLC is located roughly 30 miles south of Ann Arbor.
Valero acquired the plant from Green Plains Inc. in 2018 but due to COVID-19 and “record-low crude oil prices compounded by a 50% to 60% reduction in fuel consumption due to nationwide COVID-19 travel restrictions,” the company shuttered its processing, as Michigan Farm News reported at the time.
Ethanol, which is made by fermenting and distilling simple sugars from crops like corn, grain sorghum, wheat, sugar and other agricultural feedstocks, can be purchased by consumers at the gas pump via E10, E15, E85, and E95.
Industry leaders say the ZFS Riga move is a “win for the ethanol industry,” said Theresa Sisung, industry relations specialist for Michigan Farm Bureau.
“Anytime we add grain storage capacity and the possibility of increasing processing capacity, it is a benefit for growers,” Sisung said. “It is very exciting to see the future potential of the Riga site.”
