NextDiesel biofuel plant faces shutdown

I have always tried to get the news to you - good or bad - FIRST. Here is some breaking news that I certainly do not enjoy passing on.

SkunK
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Tue Feb 17, 2009, 05:30 PM EST

ADRIAN, Mich. -
The NextDiesel biofuel plant here may shut down operations in a few weeks if market conditions do not turn around to make it profitable again, the company’s CEO said Monday. “We have every intention of sticking with this,” said Terry Nosan, chief executive officer of Biofuels Industries Group, based in West Bloomfield. The current cost of inputs to make the company’s product and the market price of diesel fuel make it impractical to continue production for now, he said.

The company has stopped buying corn oil and other material it turns into diesel fuel, he said. The workforce of 26 people has been trimmed and production geared back while the plant uses up its remaining stock of material. When that runs out in two or three weeks, Nosan said, the company will have to decide what steps to take next.

Gov. Jennifer Granholm, U.S. Sens. Carl Levin and Debbie Stabenow, and U.S. Rep. Tim Walberg joined local government officials in ceremonies that opened the NextDiesel plant to high expectations in August 2007. “No one more than us,” Nosan said of the high hopes held at that time for the alternative fuels industry.

“But it’s been a very difficult year for everyone, including us,” he said. Agricultural commodity prices shot up, raising the cost of producing biofuels, then the cost of competing petroleum fuels came down with the dramatic fall in oil prices. At the same time, demand for fuel has contracted with the economy.Nosan said he is hoping the federal economic stimulus package just passed by Congress and a traditional boost in economic activity in the spring will improve market conditions enough to make the plant profitable again.


The downturn in the biodiesel market also pinched off payments for a new corn oil extraction facility installed at the Global Ethanol plant in Riga. The facility was installed by NextDiesel’s parent company, Greenshift Inc. of New York.Construction liens were filed against the equipment at the ethanol plant since the work was completed in December.

Diversified Mechanical Services of Comstock Park filed a lien on Jan. 19 for $964,085 in unpaid bills from its $1.3 million contract. Sieler Construction Inc. of Blissfield filed a lien on Dec. 23 for $90,122 it is owed from a $217,000 contract.Nosan said he does not know the status of Greenshift’s corn oil facility since NextDiesel stopped buying the product. The construction liens against Greenshift indirectly affect Global Ethanol, which counted on the corn oil production and a new CO2 facility built at the Riga plant last year to add to its revenue stream.


Ethanol producers have suffered a market drubbing similar to biodiesel in the past year.Global Ethanol, which has a plant in Iowa as well as the Riga facility, reported $10.7 million in net profits from $305.8 million in gross revenue for the fiscal year that ended June 30, 2008.

Operations stopped being profitable after that, said the company’s last newsletter released in August.“Although the ethanol industry appears to be in turmoil at the moment, the current state of affairs are providing the required ethanol industry changes which should provide for more positive business conditions in the near future,” the company stated on its Web site.

Go here for entire article
http://www.lenconnect.com/news/x1658742869/NextDiesel-biofuel-plant-faces-shutdown

Here is link to
Diversified Mechanical Services of Comstock park
http://www.diversifiedmechanical.com/

Sieler Construction Inc. of Blissfield
7779 Thompson HwyBlissfield, MI 49228-9736
(517) 486-3050