VeraSun to Delay Ethanol Plant Openings in Minnesota and Iowa

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Researched by Industrial Info Resources (Sugar Land, Texas)--The nation's second largest ethanol producer VeraSun Energy Corporation (NYSE:VSE) (Brookings, South Dakota) has delayed the opening of two fuel-ethanol plants that are nearing construction completion in Welcome, Minnesota, and Hartley, Iowa.

Both projects were shooting for mid-June completions, and although construction will be completed, the plants will not start production until corn and ethanol market conditions improve.

Flooding in the Midwest has taken its toll on corn crops, and ethanol margins have plummeted over the last two weeks and may force small to midsize ethanol producers to shut down over the coming months.

VeraSun still remains optimistic that ethanol projects nearing completion in Janesville, Minnesota; Hankinson, North Dakota; and Dyersville, Iowa, will go into production as planned. All of the ethanol plants the company is building have nameplate production capacities of 110 million gallons per year and are being built by the engineering and construction teams of ICM (Colwich, Kansas) and Fagen (Granite Falls, Minnesota).

Jay Brunson, Industrial Info's Vice President for Alternative Fuels said: "Small to midsize producers are facing losses of 45 cents per gallon and may be forced to shutter plants. We could even see a reduction in ethanol production as high as 2 billion to 4 billion gallons a year if market conditions don't improve in the coming months."

Industrial Info's Ethanol Database provides a comprehensive outline of all current development activities in the emerging alternative fuels market. This database covers 156 ethanol plants in operation and 530 plants under development. It also covers 98 operational biodiesel plants and 245 biodiesel plants under development.

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Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.