Aventine delays restart of Illinois plant

By Holly Jessen | September 15, 2011

A 38 MMgy ethanol plant idled since March 2010 won’t be restarted this fall, as originally hoped. Aventine Renewable Energy Holdings Inc. announced Sept. 12 that the plant it purchased in Canton, Ill., won’t begin producing ethanol again until early 2012.

Aventine purchased the plant for $16.5 million last summer. The former Riverland Biofuels plant has had a complicated and difficult history. It started out as a farmer co-op called Central Illinois Energy, which filed for bankruptcy in 2007 before construction was even completed. The ethanol plant was then revived as Riverland Biofuels, with production happening intermittently between December 2008 and March 2010. It is located about 25 miles from Aventine’s 160 MMgy plant in Pekin, Ill.

The reason for delaying startup of the Canton plant has to do with help it needs from a third-party technical and engineering company, Aventine said. “This plant relies on an integrated boiler system and co-gen unit to supply the necessary energy for the plant,” said interim CEO John Castle. “To ensure a higher degree of success in the start-up of this facility the company needs the support of the third party who designed this system. Their support will not be available in the time frame needed to get the plant going prior to the potential for winter weather to set in.” He added that Aventine fully expects to start up the plant in early spring and that the third-party company is on board with the new schedule. The name of the third-party company was not mentioned in the press release and requests for additional information from Aventine were not answered.

Aventine emerged from bankruptcy in early 2010 and resumed construction at two 110 MMgy plants, Aventine Renewable Energy-Mt. Vernon LLC in Mt. Vernon, Ind., and Aventine Renewable Energy-Aurora West LLC in Aurora, Neb. In all, the company owns five ethanol plants with a total capacity of 463 MMgy. Of those, three plants are currently operating—in Pekin, Ill., Mt. Vernon, and the one of Aventine’s two plants located in Aurora. Construction on the Aurora West plant is completed but the plant has yet to start up. The company said previously that it learned some things when starting up its Mt. Vernon plant in December 2010 and wanted to apply them to the Aurora West plant. The company has yet to announce when the Aurora West plant will begin the commissioning process.

In August, Aventine announced its second quarter financial results, which included increased net losses when compared with the same time period last year. Aventine experienced a net loss of $23.9 million, or $2.71 per diluted share. In the second quarter of 2010 the company has a net loss of $9.3 million, or $1.06 per diluted share. “This was a challenging quarter for the company with industry wide margins falling through most of the period,” said Thomas Manual, then-CEO of the company. “Operationally we continued to experience production problems at our Mt. Vernon facility leading to an extensive shutdown taken in July.” Just 11 days after the company’s second quarter financial results were announced, Aventine announced the retirement of Manual and appointed Castle, former chief financial officer and chief operating officer, as interim CEO.

On a positive note, Aventine said production had stabilized in August at the Mt. Vernon facility for the first time since plant startup. The company also reported making “significant strides to improve co-product yields” at the Pekin plant. Finally, the Aventine/Nebraska Energy plant restarted after being shut down for fermentation improvements from late April to late July. “We expect to see improvements in our profitability over the next several quarters assuming industry wide margins are maintained at the current levels,” Manual said in August. “With the upturn in the margin environment we have been able to lock in profitable margins on approximately 12 percent of our current production for the remainder of the year.”