Did nobody see this article that mentions EHNX?
Investors becoming wary of ethanol projects
Friday, December 14, 2007
By Matt Sanders ~ Southeast Missourian
An apparent slowdown in the rush to construct ethanol plants may have implications for area projects.
While he has no direct comments from representatives of companies proposing ethanol plants in the Cape Girardeau area, Cape Area Magnet director Mitch Robinson said reports about a downward trend in the ethanol industry are likely having an effect on timelines for local projects.
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Recent media reports have referred to a lessening in the profitability of ethanol plants and uncertainty about the industry's future due to higher corn prices, skepticism over ethanol's value as a clean renewable fuel, environmental concerns and a production glut. Reports like that make investors and banks wary of sinking money in proposed plants, Robinson said.
"I know it's affected the banking climate," Robinson said. "It just slows down people's decision making."
Scott County developer Joel Evans, the county's chief industrial recruitment officer, said he thinks the local plants might weather the economic storm because of the area's transportation benefits -- access to barge, highway and rail transport.
Evans takes a survival-of-the-fittest approach.
"This challenging period will ensure that firms who do locate here are capable of weathering the storm," Evans said.
Local projects haven't been canceled to his knowledge, Robinson said. The parties looking to build plants locally are still committed to their projects, Robinson said, "but they're all obviously very aware of the change in the political and economic climate over ethanol."
Four plants are proposed for construction in Southeast Missouri: Bootheel Agri-Energy LLC in Sikeston; First Missouri Energy in Scott City, at the site of the Tower Rock Stone Co.; a joint venture between Ethanex and SEMO Milling at the Southeast Missouri Regional Port Authority; and Renewable Power of Cape Girardeau LLC, which has plans to build next to the BioKyowa facility on Nash Road.
Construction hasn't begun on any of those projects.
All four are well behind the operation start date cited in their original applications for construction permits with the Missouri Department of Natural Resources. Bootheel Agri-Energy originally estimated its startup date as Jan. 1, 2008; Renewable Power planned to start this month; Ethanex planned to start operations Jan. 1; as did First Missouri Energy.
Bootheel Agri-Energy has yet to exercise its option on property for its site in Sikeston, said Ed Dust, director of the Sikeston Department of Economic Development. That option expires Feb. 22. Dust didn't comment on whether the company plans to exercise the option before the deadline, but said he's not worried about the plant's future yet.
"I'm the biggest optimist in the world, and until the twenty-second of February, I presume it's going to happen," Dust said.
Chaffee, Mo., farmer David Herbst is president of the board of directors. Herbst has said investors and company directors won't talk to the media for fear of running afoul of disclosure rules laid out by the federal Securities and Exchange Commission.
Paul Findlay, vice president of Robinson Construction Co. in Perryville, Mo., said the Renewable Power project is still seeking investors. His company is teaming with Phil Danforth, general manager of Renewable Power of Missouri, based in Marshall, Mo.
Findlay said he hopes the project is close to finished with the investment phase, but he thinks the bad news in the ethanol industry may have slowed down all the area projects.
Ethanex Energy, based in Kansas, and SEMO Milling are still in negotiations over their proposed plant at the SEMO Port, Ethanex spokeswoman Leslie Turner said.
Calls to the contact number listed for First Missouri Energy on the DNR application were not returned Thursday.
Kyra Moore, permits section chief of the DNR Air Pollution Control Program in Jefferson City, said construction applications for ethanol plants have slowed down in recent months.
But plants that already have applications pending or approved are continuing the process of establishing their operations, Moore said.
msanders@semissourian.com
335-6611, extension 182
