Valero Expects To Reopen Shuttered Ethanol Plants Next Month
April 09, 2009
Valero Energy Corp. finalized its purchase of the Albert City, Iowa, ethanol plant from VeraSun Energy Corp. on Thursday.
Valero won seven of VeraSun's ethanol plants and the right to build an eighth during a bankruptcy auction in March. Valero paid $477 million for the plants, and an additional $75 million in working capital, outbidding agribusiness giant Archer Daniels Midland Corp. (ADM).
Valero closed the first part of the transaction April 1.
The agreement to buy one remaining plant in Albion, Neb. will likely be finalized in one to two weeks, said Bill Day, a spokesman for Valero, based in San Antonio, Texas.
Valero will take about a month to restart the Albert City plant after it takes ownership, Day said. The Albion plant will also take about a month to restart after Valero begins to operate it, he added.
A third plant, in Welcome, Minn. is currently shuttered, and will take a little longer to ramp up to full capacity, Day said.
The plants are coming back online at a time when ethanol margins have been poor, due to high corn prices, and relatively low demand for gasoline, into which ethanol is blended.
Source: Dow Jones Newswires
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