Flint Hills Resources, Koch Industries' refining and chemical unit, said Thursday that it has agreed to buy two more ethanol plants.
The company, based in Wichita, now owns four ethanol plants, all in Iowa, in addition to its extensive collection of petroleum refineries, chemical plants and terminals.
Flint Hills bought the plants from Hawkeye Renewables, which emerged from bankruptcy in June and has been restructuring its operations.
No price was disclosed, but it will be all cash.
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The plant in Iowa Falls has capacity to produce 100 million gallons a year; the plant in Fairbank has capacity to produce 115 million gallons. The plants were designed by ICM and built by Fagen.
In September, Flint Hills bought Hawkeye-built plants in Menlo and Shell Rock, each of which produces 110 million gallons a year.
Koch has formed a new subsidiary, Flint Hills Renewables, to manage the new plants. The acquisitions give the company the potential to make about 3 percent of U.S. ethanol production.
"This acquisition enhances our existing renewables business and contributes to our market leadership in producing transportation fuels," Flint Hills president Brad Razook said in a statement.
Flint Hills has said it is entering the ethanol business as a way to capture more of the automobile fuel market. It has also said it believes that the cost to produce ethanol is competitive with the cost to make gasoline.
Ethanol producers got a boost in October when the federal Environmental Protection Agency raised the maximum blend of ethanol in automobile fuel from 10 percent to 15 percent for cars and light trucks built in 2007 and after.
This week, the National Petrochemical and Refiners Association — of which Koch Industries is a member — the International Liquid Terminals Association and the Western States Petroleum Association filed a lawsuit asking the U.S. Court of Appeals for the District of Columbia Circuit to review and overturn the EPA decision.