Penford Products on line after spring flood in Iowa

By Ryan C. Christiansen | October 06, 2008
Web exclusive posted Oct. 20, 2008 at 11:07 a.m. CST

Penford Products Co. has resumed its production and sale of ethanol in Cedar Rapids, Iowa, after being off-line for more than three months following record flooding in the state, which forced the plant to shut down in June.

The plant's current production capacity is 37 MMgy, less than the full design capacity of 45 MMgy, because one tank at the plant still requires repair, according to Steve Cordier, senior vice president and chief financial officer for Penford Corp., the parent company of Penford Products. The company expects the plant to be producing ethanol at full capacity by the end of the year, he said. In addition, the company's industrial starch manufacturing operation is back to pre-flood levels and the full range of the company's industrial starch products are being produced.

Penford Products first began producing ethanol at the plant on May 13 but had to temporarily shut down on June 12 when record flooding on the Cedar River forced a mandatory evacuation of the plant and surrounding areas. All employees were safely evacuated.

The company reported that direct costs from the flood to date are as much as $47 million, not including lost profits. Recovery activities at the plant included cleaning up the plant, repairing, refurbishing, or replacing numerous pumps and motors, as well as re-tuning processes at the plant to ensure that the products coming out of the plant met specifications, Cordier said. The plant's loading and unloading facilities had to be cleaned and repaired, as well.

The company believes it has adequate financial resources and liquidity to execute its recovery plans and to meet its future operating and capital needs.

The Penford Products Co. plant accounts for approximately 55 percent of the Penford Corp.'s revenues.