Omaha-based Green Plains Inc., is permanently closing its 60-million-gallon ethanol plant in Hopewell, Virginia, according to a news release from the company, as continued declining profit margins in the industry led to the decision.
Jim Stark, vice president of investor and media relations at Green Plains, said the ethanol industry continues to struggle.
"Continued low-margin environment," Stark told DTN. "When we acquired Hopewell we knew the value of the equipment was worth more than we paid for it three years ago. We did make investments in the plant, did improve its efficiency, but the margin environment has not been helpful to continue to operate the destination location. Our plan is to take that equipment and improve other plants in our platform."
The company said in a news release on Thursday that it will begin to part-out the facility.
"A significant portion of the 60-million-gallon-a-year capacity plant will be dismantled during the decommissioning process, with most of the equipment being transferred to other Green Plains facilities," the company said in a news release. "The company is also currently determining the best uses for any remaining equipment and the land.
"The closure results in a workforce reduction of approximately 31 employees who will be provided severance and healthcare support. A handful of staff will remain to oversee the decommissioning of the plant, which is expected to take 12 to 18 months."
Green Plains became the third operator of the East Coast plant, taking over operations in October 2015. Osage Bio Energy originally owned the plant, producing ethanol using barley. Future Fuels LLP was the second owner, buying the plant from Osage in 2013.
Within the first six months of taking over the plant, Green Plains invested millions of dollars in upgrades.
During the week of Oct. 8, 2018, Green Plains announced the sale of three ethanol plants to Valero Renewable Fuels, as part of a company-wide plan to control costs.
In a $328 million deal, Valero acquired about 280 million gallons of production capacity in purchasing GP plants in Lakota, Iowa, Riga, Michigan, and Bluffton, Indiana.
Todd Neeley can be reached at email@example.com
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