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Abengoa Contagion Spreads to U.S. Biofuel Plants, Causing Layoffs and Shutdowns

Submitted by on December 7, 2015 – 5:55 pmNo Comment

by Rob Nikolewski (Kansas  … “I think we have to see how this thing plays out. In the short run, of course, it’s a devastating blow,” said Neal Gillespie, Stevens County Economic Developmentdirector. “In the long run, I think there’s a lot of value in that plant out there, and I suspect that either they will get it up and going or someone else will get it up and going.”

An employee at the Huguton plant told Biomass Magazine, a trade journal, an Abengoa executive cited financial difficulties for the layoffs and added the company does not have sufficient funds to continue paying wages.

“We were told layoffs were worldwide and only about 30 people remain at the corporate office in St. Louis,” the employee said.

The layoffs and shutdowns mark an about-face for the Seville, Spain-based parent company. On Nov. 27, Abengoa told Platts in a statement, “Abengoa’s plants continue operating as normal, and at present, no stops are expected to take place.”

In yet another indication of serious financial trouble, the agricultural media outlet DTN/The Progressive Farmer reported the Nebraska Ethanol Board said the Abgengoa plant in York, Nebraska, is not in operation.

What’s more, DTN reported a major corn feedstock provider to Abengoa’s plants in Nebraska and Kansas said it has not been paid for corn already delivered to the plants dating back to July. The feedstock provider filed an amended lawsuit against Abengoa on Thursday.

“They are a great company,” Bob Dinneen, president and chief executive officer for the Renewable Fuels Association, told DTN/The Progressive Farmer. “I’ve got great confidence in their technology. I suspect they will right this ship. It’s a multi-faceted company. I’m certain they will come through this.”

U.S. biofuels advocates say the facility shutdowns in Kansas don’t point to larger problems with the the ethanol and biofuels industry but to the specific financial problems facing Abengoa.

Abengoa constructed the Hugoton plant with help from the U.S. Department of Energy, receiving a $132.4 million loan guarantee and a $97 million grant.

Earlier this year, Chris Standlee, executive vice president of global affairs for Abengoa Bioenenergy, told the loan guarantee has been paid off.

The Abengoa financial crisis is a major news story in Spain, with labor unions calling on the Spanish government to bail out the company. So far, the government under Prime Minister Mariano Rajoy has resisted, but with elections coming up later this month, the pressure is intensifying.    READ MORE

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