Biocat Fuels Seeks Private Funding For Biodiesel Derived From Rancid Waste Oil

By Bob Geiger

(Finance and Commerce, November 20, 2009) Citing the need for energy independence and environmental protection, Andover-based BioCat Fuels this week kicked off a $7 million private placement funding drive to increase production of biodiesel fuel. BioCat Fuels’ private placement memorandum, or PPM, follows a successful $3 million private placement for Ever Cat Fuels, a sister company that began producing biodiesel fuel from rancid waste oil in September using a proprietary “McGyan process.”

Both BioCat and Ever Cat Fuels use the McGyan process, which converts non-food waste oils into biodiesel. The process is notable because it uses no water, has no hazardous waste stream and uses oils unsuitable for human consumption.

In a news release announcing BioCat Fuels’ private placement, Ric Larson, BioCat Fuels’ CEO, said, “We now know the cutting-edge McGyan technology works, and it is proving to be clean, efficient and dependable. The time is right to increase biodiesel production using this process. It’s good for the environment. It’s good for the nation.”

The $7 million BioCat Fuels PPM indicates that the company wants to increase biodiesel fuel using the McGyan process.

Larson said that BioCat’s plans include building a new plant in Illinois or possibly retrofitting a closed biodiesel plant for the new process. Currently, the company’s existing plant, located in Isanti, is capable of producing up to 3 million gallons of fuel per year.

Advertisement BioCat’s partner, Anoka-based McNeff Research Consultants, developed the McGyan process and opened the Isanti demonstration plant in September.

Ben Harris, chief operating officer of BioCat, said the company is considering building a McGyan process biodiesel fuel plant near Freeport, Ill.

The company’s PPM indicates that BioCat plans to use the $7 million to open the biodiesel plant in Illinois in 2010, and that BioCat could purchase or retrofit an existing biodiesel factory to accomplish that.

A money saver?

What could prove intriguing about BioCat’s plans for expansion is that the raw materials used to make the biodiesel are rancid oils, waste oils, oils with contaminants in them and below-spec oils from food-processing plants.

In business terms, rancid translates to lower prices that BioCat can charge for the finished fuel product – a hefty 37-cents-per-gallon advantage over traditional biodiesel fuels. Click here to read more…