DowDuPont has announced plans to sell its 30-million-gallon-per-year capacity cellulosic ethanol plant in Nevada, Iowa, less than two years to the day after the company held a
The $225-million plant, which was still in the start-up process at year’s end, was expected to demand some 375,000 tons of corn stover from about 500 local farmers within a 30-mile radius of the plant. The facility was expected to create 85 full-time jobs and more than 150 seasonal jobs. The company intended to sell the fuel in California as part of the state’s low-carbon fuel standard.
In a statement provided to DTN/The Progressive Farmer, DowDuPont says it will continue to be involved in the broader cellulosic ethanol industry, focusing its business on enzymes and yeasts.
“As part of DowDuPont’s intent to create a leading specialty products company, we are making a strategic shift in how we participate in the cellulosic biofuels market,” the company reports. “While we still believe in the future of cellulosic biofuels, we have concluded it is in our long-term interest to find a strategic buyer for our technology, including the Nevada, Iowa, biorefinery.”
The statement emphasized DowDuPont will continue to participate in the overall biofuels market through specialty offerings including biofuel enzymes and engineered yeast solutions that improve yield and productivity for biofuel producers.
“We plan to work closely with local, state and federal partners to assure a smooth transition as we pursue the sale of the business. All affected employees will receive support services during this transition.”
The company’s decision to sell is part of an ongoing cost-reduction strategy undertaken following the DuPont and Dow merger.
According to a filing with the U.S. Securities Exchange Commission, the company’s board of directors approved a “synergy program” that is “anticipated to deliver run rate cost synergies” of about $3 billion within 24 months.
“The synergy program includes certain asset actions, including strategic decisions regarding the cellulosic biofuel business reflected in the preliminary fair value measurement of DuPont’s assets as of the merger date,” according to the SEC filing.
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