Rex idles One Earth Energy plant in Illinois

By Erin Voegele | April 06, 2020

Rex American Resources announced on April 1 it has idled its Illinois-based One Earth Energy ethanol plant due to market conditions caused by the COVID-19 pandemic. The facility is the second owned by Rex to idle.

Rex made the announcement in a document filed with the U.S. Securities and Exchange Commission. In the filing, Rex said COVID-19 and related efforts to contain the virus have lowered ethanol demand. Low ethanol prices were also a factor in the decision to idle the One Earth Energy plant.

Rex officials discussed the possibility of idling the facility during a March 26 earnings call held to discuss financial results for fiscal year 2019. During that call, Rex CEO Zafar Rizvi said stay-at-home orders issued by the governor of Illinois and declining margins were factors that could cause the company to idle the facility.

The company’s 150 MMgy NuGen Energy plant in Marion, South Dakota, is also idle. That facility has struggled to obtain an adequate supply of corn for several months. In response to COVID-19 and the current challenging industry environment, Rizvi said Rex made the decision in mid-March to keep the plant are hard idle until the threat of COVID-19 is reduced and the gross margin increases.

Rex made a similar statement in its April 1 SEC filing, noting that the company would reopen the One Earth Energy and NuGen Energy facilities “when management deems market conditions have improved to satisfactory conditions.”

The company currently holds ownership interest in six ethanol plants, including 75.2 percent ownership interest in Gibson City, Illinois-based One Earth Energy LLC, 99.5 percent ownership interest in Marion, South Dakota-based NuGen Energy LLC, 10.3 percent ownership interest in West Burlington, Iowa-based Big River Resources West Burlington LLC, 10.3 percent ownership interest in Galva, Illinois-based Big River Resources Galva LLC, 5.7 percent ownership interest in Dyersville, Iowa-based Big River United Energy LLC, and 10.3 percent ownership interest in Boyceville, Wisconsin-based Big River Resources Boyceville LLC.