Georgia ethanol plant temporarily idled

By Southwest Georgia Ethanol | October 24, 2012

Southwest Georgia Ethanol has temporarily idled production at its 100 MMgy ethanol facility located in Mitchell County, Georgia. This decision was precipitated by market conditions which resulted from the drought in the Midwest. The poor Midwest harvest led to an increase in corn prices, resulting in negative crush margins. The Midwest drought has also influenced quality issues with corn including uncertain aflatoxin levels. SWGE modeled all possible scenarios of slowing production and deemed it in SWGE’s best financial interest to idle production until the markets return to levels conducive to profits. 

SWGE’s $20 million working capital revolver has been paid to a zero balance and remains in place. SWGE’s financial liquidity will allow the company to maintain necessary expenses and payroll. SWGE has enough money to cover these expenses until the 2013 corn harvest if necessary, but will be ready to ramp up production earlier, given the proper market opportunities. 

In anticipation of going back into full production at or before next year’s local harvest, SWGE is writing contracts for local 2013 corn and is accepting grain sorghum that was planted for SWGE. In an effort to supply its local ethanol customers, SWGE is working with Eco-Energy to transload ethanol at the facility during the idle period. Transloading involves the transfer of ethanol from railcar to truck.

SWGE is currently handling repairs and maintenance items that would normally be performed during semi-annual shutdowns and is completing projects that cannot be done during typical shutdowns. While SWGE does anticipate layoffs in the future, the plan is to maintain a core group of skilled employees who can ramp up production when the markets indicate the opportunity for positive margins.