CENTENNIAL, Colo. -- Penford Corporation, a global leader in ingredient systems for food and industrial applications, today announced the groundbreaking of its new ethanol production facility in Cedar Rapids, Iowa.

Penford previously announced an investment of $42 million for approximately 40 million gallons of ethanol production capacity at its Cedar Rapids, Iowa, facility. The company expects the facility to be producing ethanol by the end of 2007.

"On June 28 we announced plans to enter the growing bio-fuels market," said Tom Malkoski, Penford Corp. president and CEO. "We are progressing as planned, and project milestones have been obtained.

"We have contracted with three industry-leading firms for the design, engineering and construction to help assure that the process and cost profile will be optimal for the site. Bid packages for the longer 'lead-time' items have been issued. We have received requisite permits for construction, and water and air emissions."

Obtaining the air permit was a significant achievement for Penford, said Tim Kortemeyer, president of Penford Products Company. "The permit allows the Cedar Rapids facility to increase grind capacity by 30 percent over historical levels.

"The ethanol facility is being designed to efficiently produce between 25 and 45 million gallons of ethanol per year. The increase in grind rate, along with the range of ethanol production, should allow for flexibility in the product mix of industrial starch and ethanol based upon market conditions and customer needs."

Malkoski added: "Additionally, we believe the fermentation platform will extend the potential of our Cedar Rapids bio-processing asset by expanding our range of starch modification reactions and by opening up opportunities for high-value-added industrial chemicals over the next several years."

Penford Corporation develops, manufactures and markets specialty natural-based ingredient systems for various applications, including papermaking, textiles and food products. Penford has nine locations in the United States, Australia and New Zealand.

SOURCE: Penford Corporation via Business Wire.