Aventine delays construction of Nebraska facility

By Bryan Sims | November 03, 2008
Web exclusive posted Nov. 24, 2008 at 10:02 a.m. CST

Pekin, Ill.-based ethanol producer and marketer Aventine Renewable Energy Holdings Inc. has temporarily suspended construction at its 113 MMgy facility in Aurora, Neb., to preserve capital and shore up its liquidity.

On Oct. 6, Aventine extended the construction schedule of the Aurora facility, prior to announcing the suspension of the Aurora facility construction. Aventine attributed "disappointing economics surrounding ethanol production" as the main reason for the delayed construction schedule. The company said the delay is expected to last approximately six months or "until market conditions improve."

Additionally, construction of Aventine's 113 MMgy Mount Vernon, Ind., plant will continue; however, the company pushed back its completion date from the first quarter of 2009 to the fourth quarter of 2009.

Aventine is working closely with its engineering, procurement and construction contractor Kiewit Energy Co. on the projects to help redeploy personnel and equipment where it will also incur costs related to this regard.

"Given the poor economic conditions in the ethanol industry today, we believed it was important to take the steps necessary to preserve liquidity," said Ron Miller, president and chief executive officer of Aventine. "Our capital expansion program was the largest single user of cash, so slowing this program was the most prudent cash management alternative. We remain committed to the completion of these facilities and the communities in which they are located and look forward to the day that both of these facilities are producing ethanol."

Upon completions of the Aurora and Mount Vernon plants, Aventine will have approximately 433 MMgy of combined annual production capacity. The company currently owns and operates a 160 MMgy facility in Pekin, Ill.