Pacific Ethanol, Inc., continues to remake its company, announcing on Monday it has sold grain-handling facilities at its Magic Valley Burley, Idaho, ethanol plant.
Pacific Ethanol entered into an agreement with Liberty Basin, LLC, to sell 134 acres, rail loop and grain-handling assets for $10 million in cash, according to a news release.
Pacific Ethanol will retain the ethanol plant and terminal on the remaining 25 acres and is expected to enter into agreements with Liberty Basin for delivery of grain to the plant.
The sale is expected to close by Nov. 30, 2020.
"Liberty Basin provides a great strategic alliance for managing grain delivery to the renewable fuel plant and to meet animal feed demand in the Idaho markets," Mike Kandris, PE chief executive officer said.
"Pacific Ethanol will continue to own the ethanol plant with the intent to upgrade product value prior to restarting production. As we have said in our recently announced strategic realignment toward a business focus in specialty alcohols and essential ingredients, Pacific Ethanol will repurpose or sell its idled plants. This sale is a first step toward the objective to add value to our Magic Valley plant. We will continue with our strategic realignment plan and anticipate communicating additional transactions in the future."
Pacific Ethanol announced in October plans to continue to sell off some ethanol assets and to rename its company to realign its business toward specialty alcohols and "essential ingredients."
In addition, the company said it will be selling or repurposing three ethanol plants, two in Stockton and Madera, California, and one in Columbia, Oregon. The California plants are idled and the Oregon plant continues to operate.
During the past 10 months Pacific Ethanol said it expanded production of specialty alcohols used in consumer products and reduced fuel-ethanol production. The company said it shifted from 85% ethanol and 15% specialty alcohol production, to a 50-50 mix by the end of September 2020.
"Specialty alcohols used in consumer products sell at a premium to fuel-grade ethanol and require systems, processes and certifications to produce them that are not required for fuel-grade ethanol," the company said in an October news release.
The company will expand production of specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizer, disinfectants and cleaners, grain-neutral spirits used in alcoholic beverages and vinegar as well as corn germ used for corn oils, yeast, corn gluten and distillers grains used in commercial animal feed and pet foods.
Pacific Ethanol bought Illinois Corn Processing, LLC, in 2017, to expand into specialty-alcohol production.
Pacific Ethanol also continues to operate two fuel-ethanol plants in Illinois, two in Nebraska and one in Idaho.
In the third quarter of 2020, Pacific Ethanol reported a decrease in net sales of $161 million. In addition, the company said it had reduced debt by about 15% from June 30 to Sept. 30.
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