Ethanol Blog

Iowa Ethanol Plant Ceasing Production, Cites Poor Economics

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Ingredion Inc. announced this week it will shut down production at its 45-million-gallon ethanol plant in Cedar Rapids, Iowa. (DTN file photo by Rocky Ormiston)

Ingredion Inc. is stopping production at its 45-million-gallon ethanol plant in Cedar Rapids, Iowa, at the end of January as continued industry struggles forced the hand of the company.

In a letter sent to suppliers of the plant this week, Kevin Keiser, senior manager of commodity purchasing at Ingredion in Cedar Rapids, outlined a number of reasons for the decision.

When contacted by DTN, Becca Hary, director of corporate communications at Ingredion said, "We continuously evaluate the use of our facilities as part of our overall Cost Smart strategy to optimize our resources, streamline costs and increase our productivity levels. As the current market conditions have impacted the entire ethanol industry, we have made the decision to cease ethanol production at our manufacturing facility in Cedar Rapids, Iowa."

In the letter to suppliers Keiser said it wasn't an easy decision.

"We know this is not pleasant news," the letter said.

"Ethanol has struggled to achieve profitability. Market demand remains weak and despite improvements to the production process, we were unable to achieve profitability. As the product is not core to Ingredion's growth strategy or key markets, the company has made the difficult decision to cease production and restructure roles and responsibilities within the facility to meet future production requirements."

Keiser told suppliers the company would continue to manufacture corn-based products in starch, germs and proteins.

Hary said about 30 employees are affected by the decision. In all, the facility as about 175 employees. "Our main focus is for the respect and care of our impacted employees, and we are committed to supporting them during this transition," she said.

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