» Download/View a PDF of this News Article

Biodiesel Franchiser Seeking Investors

By Kaija Wilkinson
Everything Alabama - February 21, 2007

Later this week, several Alabama investors, including two from Mobile, are scheduled to fly to Orlando and hear a four-hour presentation from Xenerga Corp. about partnering in a biodiesel plant.

Anyone with $1.9 million can become a partner, according to the company. No experience is needed. Xenerga would, according to published reports, supply the German-made equipment, set up the plant, train the employees, provide used oil and animal byproducts, monitor quality and find wholesale buyers.

Based on a national and state push to reduce America's dependence on foreign oil from unstable countries, Xenerga is confident its plan -- which Dave Jarrett, Xenerga's chief communications officer, compared to a franchise situation -- will take off.

The company hopes to expand to 40 facilities in the U.S. in the next six to nine months.

Xenerga was founded last year by British-born entrepreneur Jason Sayers, who in 1996 founded FiltaFry, a franchised operation that cleans and recycles commercial and restaurant cooking grease. There are 500 FiltaFry franchises worldwide, including about 150 in the U.S., which have contracts with large chain restaurants like T.G.I. Fridays, Bennigan's and Hooters as well as caterers, casinos and schools.

It is through FiltaFry connections that Xenerga has contracts with waste oil collectors to provide feedstock for its biodiesel plant investors.

Mark Sear, Xenerga's chief operating officer, had helped open about 130-plus biodiesel franchises in Europe and Asia through another company, part of which was purchased by Xenerga, according to Jarrett.

Investors in those plants ranged from individuals to groups to companies, he said, and he believes U.S. investors will be a similar mix.

Touted as a low-emission fuel, biodiesel is made from natural oil such as animal fat or soybean. It contains no petroleum and is typically mixed as an additive to pure diesel. Traditional diesel engines can burn fuel that contain up to 20 percent biodiesel, though it can be used in its pure form in some engines.

According to the National Biodiesel Board, which counts Xenerga among its members, there are 105 plants now operating in the U.S. with an annual production capacity of 864 million gallons. Around 80 are under construction, according to Biodiesel Board.

Other Alabama cities being targeted by Xenerga are Birmingham and Montgomery. The state currently has two biodiesel facilities, one in Moundville and one in Birmingham, and one is planned in Chickasaw.

"Mobile would fit, because obviously you have feedstock in the area with cooking oil," Jarrett said. He said the company is also looking at using feedstock such as palm oil that could be "barged right into Mobile Bay" from all over the world.

Fuels like biodiesel and ethanol, the gasoline alternative made from corn, are gaining favor both nationally and locally.

President Bush during the recent State of the Union address said he wanted the U.S. to increase its alternative fuel consumption, and Alabama, in a joint effort between the state Department of Agriculture and Industries and Gov. Bob Riley's office, announced last week an Alabama Alternative Energy Committee charged with developing a comprehensive alternative energy policy for the state.

The Department of Agriculture and Industries said it has assisted in landing a grant to help a Moundville plant start producing biodiesel, and that plant is now making biodiesel for the Birmingham Airport Authority. The airport authority reported that it began last February using biodiesel it in all its diesel-powered vehicles, amounting to about 30,000 gallons annually.

Riley announced last fall that the state had been awarded a grant by the U.S. Department of Energy for $312,000 to add ethanol and biodiesel pumps at five stations along Interstate 65.

The biodiesel facilities offered by Xenerga go up quickly. Once permitting is received, a facility is up and running in about five days, Jarrett said.

The Xenerga facilities are touted as smaller, more affordable biodiesel plants, producing about 15,000 gallons a day or 5 million gallons a year, Jarrett said, compared to huge facilities in the Midwest that can produce 50 million to 100 gallons.

The facilities typically start turning a profit in a little over a year, he said.

A facility operating 24 hours a day takes about 10 employees including operators, truck drivers and a general manager, Jarrett said. Although salaries vary depending a facility's location, they earn on average $35,000 to $40,000 annually, while the general manager can earn $75,000 to $80,000 annually. "Obviously, employees in L.A. would earn more than they would in Mobile," he said. Workers undergo a week's training in Orlando, then two weeks on site.