While many in the biofuels industry are continuing to dream up new concepts for alternative fuels, Texas-based Kior is doubling down on its successful venture to convert simple wood chips into a viable fuel by securing the funding to build a second biofuel plant in Mississippi. Investor Vinod Khosla, the key backer for Kior, is providing $50 million in capital in order to build a second production facility.
The new facility will sit adjacent to the company’s current facility in Columbus, Mississippi, and will cost around $225 million in total to build. Khosla Ventures’ combined $50 million investment into the project will serve as a kick-start for the funding. Assuming that Kior can secure the remaining funds, the company has stated that it can start construction within just 90 days of closing the funds.
News of Kior making efforts to build a second plant took investors by surprise, after the company recently disclosed that it had missed its biofuel production targets last month by 75 percent, sending the company’s publicly held stock lower and putting a damper on an otherwise positive outlook for the company, hit its own last November, when it began producing biofuel. However, in spite of the fact that production is underway — and has remained so — Kior isn’t expected to be profitable until at least 2015, and is running a deficit of at least $297 million as of this summer.
In spite of this new, Kior is moving forward with plans to fund and eventually launch the second plant, and believes that it will enable the company to be cash flow profitable by 2015.