Grain Journal - January/February 2009 - (Page 114) Ethanol Plants Struggling DECLARE BANKRUPTCY, HALT PRODUCTION DUE TO TIGHT MARGINS, FINANCING The last half of 2008 wasn’t kind to the ethanol industry as producers battled volatile feedstock costs and declining ethanol prices. The impact is carrying over to 2009 as ethanol plants declare bankruptcy or halt production. Here is an summary of recent media reports: Panda Ethanol. On Jan. 23, Panda Ethanol, Dallas, TX, took it’s Hereford Biofuels sibsidiary into Chapter 11 bankruptcy as construction neared completion on its 105-million-gallon-per-year (MMGY) plant in Hereford, TX. “Over the past six months, we have worked diligently to successfully overcome a number of challenges,” said Panda Ethanol CEO Darol Lindloff. According to Panda Media Director Bill Pentak, the plan is to sell the plant which is approximately 90% completed. Other Struggling Plants Other struggling plants include: • Plainview Bioenergy, Plainview, TX, announced a temporary shutdown Jan. 23 of its 110-MMGY plant, which began production in April. • Greater Ohio Ethanol, Lima, OH, which declared bankruptcy in late October, is trying to auction off its 54-MMGY plant. The goal since mid-December has been to find a buyer for the $150 million plant and, hopefully, cover some of the bills left from construction and five months of operation. However, three attempts to sell the plant have failed. The bankruptcy judge extended the deadline to Feb. 18 for the owners to sell the plant or be forced into Chapter 7 bankruptcy. • Show Me Ethanol, Carrollton, MO, announced Jan. 21 that Plant Manager Greg Thomas had been replaced by Dennis Alt. According to a U.S. Securities and Exchange Commission (SEC) filing Dec. 30, the company had fallen to a 27% assets-to-total-equity ratio, below the SEC’s required 35%. • Northeast Biofuels, Oswego County, NY, may be forced to liquidate to pay its creditors, according to media reports Jan. 17. Beset by construction delays and operating problems, officials at the ethanol plant have been trying to raise new capital to fix what they say are design flaws in the facility. The plant began operation in August and is seeking reorganization financing help with the bankruptcy court. • Boot Hill Biofuels may convert from Chapter 11 to Chapter 7 bankruptcy status if it cannot meet a deadline of Feb. 5 from one of its creditors. Construction never began for a planned 110-MMGY plant in Wright, KS. • Pacific Ethanol’s Madera, CA 40-MMGY plant suspended operations Jan. 9. The company cited extended unfavorable market conditions for producing ethanol. • Husker Ag, Plainview, NE, suspended operations Jan. 6 and resumed Jan. 28. The company announced net losses of $6 million in the first 10 months of 2008. • The Pine Lake Corn Processors ethanol plant in Steamboat Rock, IA shut down operations in early December due to rising feedstock costs. Myke Feinman, associate editor Response No. 1141 114 GJ J/F http://www.johnsonsysteminc.com http://www.johnsonsysteminc.com
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