The Andersons Inc. has finished a project to double ethanol output at a southern Michigan plant it co-owns with Marathon Petroleum Corp.

With an annual capacity of 130 million gallons, the plant is now one of the largest ethanol production sites in the country.

The company embarked on the expansion in late 2015, when oil was trading at its lowest levels in more than decade and there were significant questions about near-term profitability of ethanol production. Even so, low corn prices and other market factors helped push The Andersons’ ethanol group to a solid year in 2016.

“We got a nice bump in ethanol demand over this last year. That’s really made the economics work really well,” said Mike Irmen, president of the company’s ethanol group.

The ethanol group reported an operating profit of nearly $25 million last year.

“That’s a pretty solid year for us and we’re every bit as optimistic about that this year,” he said. “We expect with a little bit more capacity, so some improvement from last year is our expectation”

The Andersons, which is based in Monclova Township, produced 387 million gallons of ethanol last year. With the newly expanded plant in Albion, Mich., now up and running, the company has a total ethanol production capacity of about 450 million gallons.

The Andersons and Marathon opened the Albion plant through a joint venture in 2006. Officials with The Andersons said the two companies are essentially equal partners, though The Andersons oversees operations.

Officials said Marathon is the single largest customer, though it buys ethanol at the same current market rate that any other customer would pay.

A spokesman for Findlay-based Marathon Petroleum declined to comment. Marathon has a large refinery in Detroit.

The Andersons declined to say how much the upgrades in Albion cost, only that they were borne by the limited liability corporation formed by them and Marathon. However, a news release from the Michigan Department of Transportation announcing roadway upgrades outside the plant put the total investment at $105 million.

U.S. ethanol production has been consistently growing since 1980 and has more than doubled over the last 10 years. Production was up 3.5 percent last year to 15.3 billion gallons.

“Generally speaking, we are absolutely seeing increased demand here and abroad,” said Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, an industry advocacy group based in Washington.

According to data from the U.S. Energy Information Association, U.S. producers exported more than 1 billion gallons of ethanol last year. That’s the second highest level on record, trailing only 2011.

There are some threats to that, though. Brazil recently proposed a 16 percent tariff on ethanol imports.

“Anything that would undermine export markets is something that would have an impact, but most of what we are producing is being sold domestically so it wouldn’t be a big deal. I think we are pretty bullish about the future,” Mr. Dinneen said. “Companies like The Andersons and others are expanding their existing facilities. They wouldn’t be doing that if the industry wasn’t seeing increases down the road.”

Most of what The Andersons produces is sold domestically. Mr. Irmen said all of the company’s Michigan production is sold and used within that state. (The raw material also is wholly from Michigan, with 100 percent of the corn coming from within 50 miles of the Albion plant.) About 70 percent of what the company makes at its Greenville, Ohio, plant is sold in Ohio.

Mr. Irmen said the expansion in Albion created 12 jobs, bringing total on-site employment to about 50 people. Albion is about 105 miles northwest of Toledo.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.

First Published April 13, 2017, 4:00 a.m.