The Portales plant will be one of two Abengoa Bioenergy Corp. plants to be temporarily closed in the new year because of depressed market conditions, according to Abengoa Executive Vice President Chris Standlee.
“There’s some really depressed market conditions right now, so we just made the decision to temporarily stop production and begin an extensive maintenance plan, so we’ll be ready to be up and running when conditions improve,” Standlee said. “But for now, we’ve made the decision that we have to shut down because of these market conditions.”
Standlee said the Portales plant has about 45 employees.
The Portales plant has the capacity to produce 30 million gallons of ethanol per year from grain sorghum.
Standlee said the Colwich, Kan., plant is the other plant which will be temporarily closed in the new year.
“Those are our two smallest plants,” Standlee said of the Portales and Colwich branches. “They don’t have the economies of scale that the larger plants have.”
Roosevelt County Community Development Corp. Director Greg Fisher said the situation is similar to last time when Abengoa closed in the fall of 2008.
“All I can say is it’s been a difficult year for commodity prices as the drought has led to a huge spike in grain prices,” Fisher said. “This is just an example of what a lot of manufacturing companies who depend on commodities are going through. This situation reflects unstable markets.”
Fisher said part of the RCCDC industrial park master plan is working on ways to help Abengoa reduce their costs with commodities and utilities.
“For example, Phelps Engineering has found an opportunity to utilize wastewater from Dairy Concepts to produce biofuel for Abengoa. That’s one way we may be able to help them out in the future through our industrial planning,” Fisher said. “We really appreciate Abengoa in the community.”
Standlee said an exact closing date for the plant is undetermined, but it should be sometime in the first week of January.
He said how long the two plants will be closed is also undetermined.
“It’s depending upon the market,” Standlee said. “It’s just expected to be temporary and we hope it’s short.”
According to a previous Portales News-Tribune article, the Abengoa corporation was estimating being closed weeks to months when it shut down in 2008. The plant reopened in January after close to two years of inactivity.
“It’s been a terrible year and all we can hope for is a better year next year,” Fisher said. “It’s gonna be tough until grain and fuel prices come down.”