Pine Lake Corn Processors Discontinues Ethanol Production at Iowa Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Cooperative-owned Pine Lake Corn Processors LLC (Steamboat Rock, Iowa) has discontinued ethanol production at the Steamboat Rock, Iowa, fuel ethanol plant to avoid continuing losses. The cooperative bought too much high-priced corn this summer on ill-advised hedging and did not contract enough ethanol at the right price to cover operating costs.

The plant produced its last drop of ethanol at 3 a.m. Monday morning of last week and has run out of cash.

A company news release stated: "The Board of Directors of Pine Lake Corn Processors LLC, the partnership's general partner, had indicated that the measure as necessary to avoid continuing losses. Increased corn prices on forwarding contracts obtained during the summer and recent decreasing prices for ethanol have negatively impacted the company's net worth. The company remains optimistic about restructuring its obligations and renewing manufacturing activity in the future."

The $30 million plant went into operation in March 2005 and had the capacity of producing 20 million gallons of fuel ethanol per year and required 12 million bushels per year of corn feedstock. The plant utilized Delta-T Incorporated (Williamsburg, Virginia) process technology and was built by Monsanto Enviro-Chem Systems (St. Louis, Missouri).

Nine new fuel ethanol plants have been placed on hold in Iowa and more projects could follow if the market downturn continues.

Industrial Info's Ethanol Database provides a comprehensive outline of all current development activities in the emerging alternative fuels market. This database covers 177 ethanol plants in operation and 530 plants under development. It also covers 145 operational biodiesel plants and 245 biodiesel plants under development.

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