Rex: Production resumes at One Earth Energy ethanol plant

By Erin Voegele | May 28, 2020

Stuart Rose, executive chairman of Rex American Resources, announced on May 28 the company’s One Earth Energy ethanol plant in Gibson City, Illinois, has resumed operations after idling earlier this year due to market impacts caused by the COVID-19 pandemic.

Rose discussed the current status of the plant during a May 28 earnings call held to discuss the company’s financial results for the fiscal first quarter, which ended April 30. Rex’s NuGen Energy plant in Marion, South Dakota, remains idle.  

During the call, Rose said Rex’s ethanol business is currently losing money, but said the second quarter loss is expected to less than the first quarter loss. Increased ethanol prices have allowed the One Earth Energy plant to resume operations, Rose said, adding that he hopes all of the company’s ethanol plants will be operational by this fall. Earlier this year, Rex announced the NuGen Energy plant has been idle since October due to a lack of corn availability. 

Zafar Rizvi, CEO of Rex, provided an update of the carbon sequestration project the One Earth Energy facility is pursuing with the University of Illinois. The project has received grant from the U.S. Department of Energy. According to Rizvi, a feasibility study has been completed for the project. Seismic testing has also been completed and extra land has been purchased for the project. He also cautioned that the project is at a very early preliminary stage.

Moving forward, Rose said the corn harvest looks good and the company is benefiting from provisions includes in the CARES Act. Rose also indicated Rex continues to look for quality ethanol plants to acquire, but stressed the price would have to be very good. No acquisitions are imminent at this time, he added.

Rex 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.

Rex reported $83.25 million in net sales and revenue for the fiscal first quarter, down from $104.58 million during the same period of last year. Gross loss was $9.33 million, compared to a gross profit of $3.65 million. Net loss attributed to Rex common shareholders was $7.64 million, compared to a net income attributable to Rex common shareholders reported for the first fiscal quarter of 2019.