VeraSun ethanol plant in Montgomery County ceases operations

By Barry Lewis, The Paper of Montgomery County Assistant Publisher

LINDEN - More signs of tough economic times may have hit Montgomery County as the VeraSun Energy Corp. ethanol plant has ceased operations - at least temporarily.

According to employees the last cook was completed at 5:30 a.m. Thursday. The facility stopped accepting corn Wednesday. It is not known if this is a short-term or long-term cease in operations.

Calls to the local facility were referred to the corporate headquarters in Brookings, S.D. Repeated calls to company officials went unreturned all day Thursday.

It is no secret that the company has been for sale. Last month the company announced that it hired Morgan Stanley to help it "evaluate strategic alternatives."

While the plant may be down at this time, business will be as usual at the local Cargill elevator, according to Marc Mears an official at Cargill.

"Nothing has changed for us," he said.

The $100 million facility in Linden opened in July of 2007 and was sold to VeraSun Energy the following month as it took over on Aug. 20, 2007. The Linden site was one of three VeraSun bought from ASAlliances Biofuels, LLC for $725 million. The other two facilities were in Albion, Neb., and Bloomingburg, Ohio.

The company has opened three new ethanol facilities since July. On Sept. 5 the company opened a 110-million-gallon-per-year ethanol biorefinery near Dyersville, Iowa. At the time of the opening the Dyersville production facility marked the 14th VeraSun biorefinery in operation, increasing the company's annual production capacity to more than 1.4 billion gallons. Earlier this summer the company also opened a facility in Hartley, Iowa, and on July 22 a facility was opened in Hankinson, N.D.

VeraSun has 16 ethanol plants in eight states. The company markets E85, a blend of 85 percent ethanol and 15 percent gasoline used by flexible-fuel vehicles.

The company had a record second quarter this year. In August the company reported revenues of $1.015 billion. The revenues represented a 499 percent increase over the second quarter of 2007. However, with the rapidly decline in corn prices, the company had come into some difficult times. As a result it was estimated the resulting third-quarter loss was somewhere between $63 million and $103 million.

VeraSun's stock plummeted 73 percent in September to close at $1.41 per share. It was as high as $17.75 in the past year. Last week, it was announced that VeraSun Energy Corp. sold nearly 15.9 million shares to asset manager Invesco Ltd.