Alabama Green Lubricants (AGL) announced that it has completed the debt financing phase for its 32 million gallon per year re-refining project in Alabama, which is expected to cost $49 million to build and will employ 25 people at full employment.
“There are over a billion gallons of used motor oil collected in United States each year, and of that, only about 20 percent is recycled,” said John Redmond, president of AGL. “The balance gets burned as fuel. By bringing it back into a plant such as ours, we can remove the contaminants and sludge and return it to base oil, which is the fundamental building block of oil lubricants.”
Redmond said motor oil is generally 90 percent base oil and 10 percent additives.
“We will basically produce base oil and light distillate fuel, which we can use at our plant or sell to other blenders. About 15 percent of what comes in will be heavy, viscous materials known as asphalt flux, and we hope to be able to sell that to roofing and shingle manufacturing companies and asphalt companies for road building and construction projects.
“So 70 percent of the material is recovered as base oil, 15 percent as light distillate fuel and 15 percent as asphalt flux,” Redmond said. “We will create useable products out of everything that comes in.”
Alabama Green Lubricants looks to partner with existing used oil collectors throughout the mid-south for its supply of used oil, according to a press release from the company. “With a national re-refining rate of less than 30% of all lubricants collected, AGL will provide a high-value, reliable market for collected used oil that has been negatively impacted over the last several yearsby changes in the traditional ‘burner’ markets,” the press release said.
Redmond said the federal government and automotive manufacturers have endorsed the use of recycled motor oil to conserve resources and reduce waste.
The recycling plant will be AGL’s first, but there are eight others operating in the United States and 28 in Europe, Redmond said. “We have a long way to go to catch up with the Europeans. They started re-refining long before we did. We will be number nine in the United States, and we hope to move the recycling percentage up from about 20 percent to north of 50 percent as soon as possible.
“We’re looking forward to it,” Redmond said “This project has been in the works for the better part of two years.
“Once we execute this business model and meet all the expectations we’ve got for this project, we think there is great demand and opportunity in the United States for this type of product,” Redmond said.
“We’re very happy that they’ve chosen Childersburg and Talladega County as the site for their new facility,” said Calvin Miller, executive director of the Talladega County Economic Development Authority.
“They’ve been working on this for a couple of years, but here it’s only been about six months. They contacted us in May and visited the site, then optioned the site in June of 2013,” Miller said.
“They have been doing due diligence on it. The city of Childersburg had wetland studies done, and a portion of the site has been cleared of trees. There’s rail nearby, and they will build a rail spur to the site,” Miller said.
He said AGL looked around Alabama for existing sites that would’ve been suitable, but ultimately building a new facility at the Childersburg site best suited the company’s needs.
The press release said AGL selected Childersburg due to its central location in the company’s targeted service area, exceptional transportation infrastructure, and the pro-business environment demonstrated by the City of Childersburg, Talladega County, and the State of Alabama.
In a meeting in early September, the Childersburg City Council supported exempting the company from paying state and local property taxes not earmarked for schools for 10 years, as well as construction-related sales taxes and mortgage and recording taxes.
At that time, the council was told the company will employ 25 people and provide a $2 million payroll after two years of operation.
“We’re glad to have them coming,” said City Council President Jimmy Payne. “We will do everything we can to keep them satisfied – whatever it takes to get them here and make them feel welcome.”
Payne said the company’s announcement is one payoff for the city’s ongoing efforts to fill the industrial park with diverse industries, and more could be on the horizon. He said he expects the re-refining process to be a clean operation.
AGL hasÊselected Chemical Engineering Partners (CEP) as the provider of its used oil re-refiningÊprocess andÊtechnology.
“With its proven track record of providing re-refining technology for 10 operating plants across a wide range of geographies, including the United States, Europe and South America, CEP showed us that they have the expertise required to provide AGL with the technology necessary to compete in a global industry,” Ramki Srinivasan, CEO and founder of Alabama Green Lubricants, said in the press release.
Redmond said the company would likely bring in a refining manager from outside the area, but hire mostly local people for plant operations.
He said a ground-breaking ceremony will be announced.
Contact Bill Kimber at email@example.com