Plans to use waste from sugarcane crystallize in Lafourche

By Susan Buchanan
Contributing Writer

You’ve driven down Highway 90 and passed fields of cane around Raceland, 40 miles southwest of New Orleans in Lafourche Parish. Plans are to use the bagasse or fibrous waste from that cane to produce industrial sugar for food and personal care products. Stora Enso in Finland, the parent of North Carolina-based biotech firm Virdia Inc., is investing $43 million in a new facility that will operate next to Raceland Raw Sugar Corp., starting in 2017.

Last week, Raceland’s general manager Dan Duplantis confirmed that Virdia has agreed to buy bagasse from the company, which is part of M.A. Patout & Son in Jeanerette. Meanwhile, a not-yet-announced firm might link up with Virdia in Raceland.

Virdia’s plant will be a demonstration and market development site, Stora Enso spokeswoman Kirsi Seppalainen in Helsinki said last week. Stora Enso and Virdia will use the facility to assess extraction and separation technologies, developed by Virdia, to convert cellulosic biomass—including agricultural waste and wood—into highly refined sugars. Stora Enso, a pulp and paper manufacturer, will consider whether Virdia’s technology can be adopted on a larger scale, possibly in some of Stora’s mills.

Seppalainen said Virdia’s plant won’t produce biofuel. That contrasts with a Sept. 2 announcement from state-agency Louisiana Economic Development in Baton Rouge that biofuel will be one of the Virdia site’s products. Seppalainen also said the company’s Raceland operation will consist of one new plant, not plants as the Jindal administration said last month. And she said it will create about 40 jobs, differing from LED’s projection of 81 new direct jobs.

Plans by the as-yet-unannounced firm might explain these discrepancies, however. While Stora Enso will build one demonstration plant, “the reason for the plural form in the governor’s release is that there might be another facility by another company as well,” Seppalainen said.

Virdia’s managing director Otavio Pontes last week confirmed that talks with another firm were under way. “We’re in negotiations with a third company that will use part of the material produced in the demo plant,” he said. “As soon as we finish the negotiation, we’ll be able to publicly announce it.”

When asked if this other firm might be NFR BioEnergy in New York, Stora Enso and LED wouldn’t comment. In September, NFR BioEnergy announced plans to invest $312 million to build ten bio-refineries near Louisiana cane mills to convert bagasse into energy pellets. NFR’s intended markets are electrical power plants in Europe, followed by commercial and residential pellet users with heating needs.

Meanwhile, what’s the outlook for producing ethanol from Louisiana cane? On the face of it, the local crop would seem to be a promising feedstock. Half of Brazil’s giant cane output is used for ethanol to fuel domestic cars and for foreign export. But hopes for cane ethanol in Louisiana, dating to the 1970s and earlier, have been dashed by crop-damaging freezes and hurricanes, inadequate investment in facilities, and shifts in federal support for alternative fuels. Bagasse is used for electricity to power Louisiana sugar mills, however.

Regarding cane-ethanol prospects, “a business plan that looks good on paper may end up not being successful in the real world,“ Louisiana State University agricultural economics professor Michael Salassi said last week. “Many different factors must come together at one time, including business plans of the biofuel producer and the feedstock provider, capital availability to initiate the project and opportunities in biofuel-product markets.” When the timing of these factors is right, a new venture has a good chance of success, he said.

LED said Virdia will start hiring in Raceland next year, and its demo plant should be complete by 2016’s end. The agency said NFR BioEnergy will hire in Louisiana on a significant basis in 2016, with that company’s capital investment likely to be complete by late 2018.

LED began talking with Virdia in August 2012 and with NFR BioEnergy in March of last year. The state offered Virdia an incentive package that includes a performance-based, $1 million Economic Development Award Program grant to offset infrastructure costs. The state offered NFR a package with a $500,000 EDAP grant. Both companies have access to the state’s industrial tax-exemption program and its workforce development services.

This article originally published in the October 27, 2014 print edition of The Louisiana Weekly newspaper.