Former Tennol site slightly active as buyer sought

Former Tennol site slightly active as buyer sought

July 22nd, 2011 by Ben Benton in Business Around the Region

Renewable Fuels LLC, owner of the former Tennol plant near Jasper, Tenn., pictured here in a 2006 photo, is producing a product used to manufacture biodiesel.

Photo by Tim Barber/Times Free Press.

The economic downturn might have stalled marketing efforts for the 225-acre former Tennol ethanol plant but property owners are keeping the Jasper, Tenn., site active with a small firm making fuel products.

Renewable Fuels LLC, which purchased the site in 2009 for $2.6 million, has a small operation in residence using chicken parts to make products used to manufacture biodiesel, officials said.

Renewable Fuels and SunsOil LLC, of Athens, Tenn., merged to form the operation, according to Sonny Kyle, one of Renewable Fuels' eight investors who ponied up the cash to buy the Tennol plant property in 2009.

The $72 million plant was built in 1984 by Tennol Energy. The company was projected to manufacture about 25 million gallons of fuel a year but production never got off the ground, and the plant went into bankrupted in 1988.

In 1994, AG Processing Inc. of Omaha, Neb., bought it for $10.5 million from the U.S. Department of Energy, newspaper archives show. Community Bank acquired the property in a later bankruptcy.

County officials said in 2009 that Renewable Fuels was among the last of 15 to 20 groups which eyed the site over the years.

The economic downturn came at a bad time, Kyle said. But the merger with SunsOil LLC led to a functioning plant at the site that turns chicken parts into a commodity called "fat" which is used to make biodiesel, he said.

"We're actually making the 'fat' and selling it to biodiesel companies that are up and running," Kyle said.

As the economy recovers, the company could begin fuel production as well. "We do have the capabilities of adding a little bit to our process to make biodiesel fuel, but we just haven't done it at this point," he said.

In 2009, word of the site's revival under new ownership caught the interest of a Memphis-based company called Biofuels America that was studying a $62.3 million biofuel plant at the site. But Biofuels American did not make the move to purchase, records show.

Marion County Mayor John Graham said he has visited the current operation since it started. He said there were six to eight employees working when he visited.

Graham said the operation could be dismantled or shifted if a prospective buyer wants to move in.

"We have it as what we describe as a 'tier 1' property," he said. "Tier 1 means it's got most every utility you'd need to operate any type of industry."

Add to that the proximity to the Nickajack Port Authority, interstate highways and rail access on the Tennessee River, "it's a prime site," Graham said.

Contact staff writer Ben Benton at 423-757-6569 or bbenton@timesfreepress.com.