ADM to close ND ethanol plant

By Kris Bevill | February 06, 2012

Archer Daniels Midland Co. announced Feb. 6 that it will close its 30 MMgy ethanol plant in Walhalla, N.D., in April, citing a need to optimize its U.S. corn processing operations as the reason for the closure.

ADM acquired the Walhalla ethanol plant in 1991. It is by far the smallest ethanol plant owned by the company and is located in the least desirable geographic position for producing corn-based ethanol. Walhalla is positioned in the extreme northeastern corner of North Dakota, just 5 miles south of the Canadian border, in a region that is more well-known for potato production than corn. ADM’s other ethanol facilities are located in Illinois, Iowa and Nebraska and each have the ability to produce between 100 and about 300 MMgy of ethanol, with the exception of one facility in Marshall, Minn., which has a capacity of 40 MMgy, according to EPM ethanol plant map data. In a statement, ADM said its total U.S. ethanol production capacity without the Walhalla plant will be approximately 1.72 billion gallons per year. ADM spokeswoman Jessie McKinney declined to offer plant-specific capacities. The Walhalla plant is currently producing ethanol, but it is unclear whether it is operating at full capacity. The company does not disclose that information for proprietary reasons, according to McKinney.

ADM said it will offer severance packages, including outplacement services, to the 61 employees affected by the Walhalla plant’s closure. The company will honor all corn supply contract obligations, according to McKinney, and will continue to supply the Walhalla plant’s ethanol and feed products customers with products produced at ADM’s other ethanol facilities. The company has not yet determined its plans for the facility following the shutdown, McKinney said.

In January, ADM announced plans to reduce its global workforce by 1,000 jobs, or about 3 percent of the company’s total workforce, in order to cut costs. The company’s most recent quarterly financial results, for the quarter ending Dec. 31, showed a net earnings of $80 million—nearly 90 percent less than the same period one year ago. ADM CEO and Chairman Patricia Woertz attributed the losses to weakness in global oilseeds margins, poor return on corn and difficulty in the company’s international merchandising, but said the company remained optimistic that it could recover. McKinney said the company does not currently plan to close any of its other ethanol facilities, but added that the company is “always analyzing our operations to monitor if they are delivering sufficient results.”