MERRILL, Iowa -- Plymouth Energy, a local member-owned ethanol company with its plant in Merrill, is asking its members to invest another $10 million so the company can take advantage of opportunities in the commodity markets, improved technologies and other operating tools it said would help ensure a timely return on shareholders' investment.

In a letter sent this week to its shareholders, CEO Dave Hoffman said that the company's managers have authorized the sale of $10 million in subordinate notes to raise working capital. The notes will return 8 percent interest at a cost to the company of less than 2 percent interest, Hoffman said.

Plymouth Energy Chief Financial Officer Steve Meyer said the company will use the money for several things: to further automate the processes to make more ethanol per bushel of corn; to lock in advantageous margins in the commodities market; and possibly for a centrifuge to extract oil from the corn syrup to add another product to returns on investment.

Meyer said the company posted a profit of $3 million for the quarter ending Sept. 30, and said the board "has a pretty strong risk policy." He said the $3.4 million in additional capital that board of directors invested earlier was used for start-up costs.

In his letter, Hoffman also noted that a new grain bin under construction will expand storage capacity from a 10-day supply of corn to a 27-day capacity, something he said will mean lower corn costs and will protect the plant from potential grain shortages.

He said the company's goals remain: pay off the bank; provide "a nice return" to investors; increase the value of agriculture in Plymouth County; and provide a "safe, career-oriented work place with good strong jobs."

In his letter, Hoffman acknowledged the plant had operating losses during its first three months of operation, which he said were due to start-up activities, but had since performed at a "higher and more efficient level." He also noted some initial problems that included the temporary loss of its grain dealer license. But, he said, the company has since renegotiated its senior lending agreement and met all the requirements of the Iowa Grain Bureau, resulting in the return of that license. Plymouth Energy was never fined for any wrongdoing.

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About Plymouth Energy

The $103 million Plymouth Energy plant is geared to produce 50 million gallons of ethanol each year. Its by-products include corn syrup and dry and wet distiller's grain used for cattle feed. Production started on May 1.

The facility sits on 92 acres and employs 34 people. It is owned 50-50 by about 330 local shareholders and The Fleming Group, an investment company in Ireland. It sells its ethanol in the United States, Canada and Mexico.