Bunge North America Inc. has decided to sell its stake in a
54-million-gallon-per-year (MMgpy) ethanol plant in
Vicksburg, Mississippi, reflecting uncertainty over US
biofuel use. The sale is the first in what will likely be a
series of ethanol industry divestitures, according to
Private firm Ergon Inc. will buy Bunge's share of the
joint-venture plant, which is the only facility in
Mississippi that produces ethanol from corn. The terms of the
deal, and the volume of Bunge's share, were not disclosed.
Don Davis, president of Ergon's refining
and marketing division,
stated, "This transaction allows us to look at alternative feedstock
s, as well as how the
plant may be used for products beyond traditional ethanol
Ethanol producers are presently reaping attractive profits,
due to a record 2013 corn harvest and a 30% decrease in corn
prices over the past six months. However, ethanol's future in
the US looks murky. The US Environmental Protection Agency
(EPA) is expected to reduce the Renewable Fuel Standard
(RFS), requiring ethanol to be mixed into gasoline, in early
The EPA has proposed that the volume of ethanol blended into
gasoline be lowered to 13 billion gallons per year (Bgpy)
from 14.4 Bgpy. The anticipated reduction would be the first
since the RFS was defined in the Energy Independence and
Security Act (EISA) of 2007.
The Vicksburg ethanol plant has been idled since December
2012, after an ongoing drought in the US severely reduced
corn supplies. According to industry experts, the plant is
also capable of producing ethanol from sugar cane or sorghum.
In another recent shake-up, the owners of a 125-MMgpy plant
in Rochelle, Illinois announced on January 2 that the plant
is for sale. The facility began production in 2006 and is
operated by GTL Resources and Illinois River Energy.