When the bottom dropped out of the ethanol market,
VeraSun Energy Corp. filed for bankruptcy protection and its 17 MidWest corn-to-fuel conversion plants were put on maintenance-only program as they awaited buyers.
In a feel good story of sorts, at least with layoffs abounding, all employees were kept on the payroll, including the 40 workers at the Woodbury plant, about 30 minutes west of Lansing.
On March 18,
AgStar Financial Services of Mankato, Minn., a rural bank of sorts, successfully bid $324 million for six of VeraSun’s plants, including the one in Woodbury, which went for $30 million. The acquisition is expected to be completed by mid-April. Then, AgStar hopes to find buyers within 60 days, says Heather Leiferman, AgStar spokesperson.
Throughout the seven-month and running process, the Woodbury employees continue to get their paychecks.
“We’re fortunate VeraSun and AgStar realize the value of our people. A
new owner will get experienced staff. There are not a lot of people
with ethanol skills,” says Debbie Blundy,
commodities buyer at Woodbury, speaking from her office in the
community little bigger than a blink.
The 38-acre plant sits among the product it processes. “Here I am, surrounded by corn
fields,” Blundy laughs. The plant can go through 18 million bushels of corn in a year. And it is the falling price of corn that caused some of VeraSun’s problems, says Blundy.
A year ago, a bushel of corn brought $7. Last week, the price was in the $4.80 range, she says. VeraSun, however, was locked into the contracts with the higher prices. Meanwhile, the price of gasoline dropped.
“Ethanol has experienced recent volatility but remains a viable industry,” said Paul DeBriyn, president of AgStar. “Our goal is to have these plants sold as quickly as possible. This is vital so that corn will again be purchased from local sources, jobs will be brought back to rural America, and the renewable fuels industry as a whole will be reinvigorated.”
DeBriyn notes the Congressionally-approved
Renewable Fuels Standard requires 10.5 billion gallons of corn-based ethanol to be blended into the U.S. fuel supply in 2009.
At a time when capital resources are said to be frozen, AgStar does not fit the stereotype.
“Access to funding for new loans is ample. We never got into subprime lending,” says Leiferman. Her company boasts 13,000 stockholders. It has expertise in the corn, soybean, swine, dairy and bio-energy industries and carries rural home mortgages.
Source: Heather Leiferman, AgStar
Gretchen Cochran, Innovation & Jobs editor, may be reached
here.
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