Milton ethanol plant retains its optimism
MILTON As one of nine ethanol plants in Wisconsin seeks bankruptcy protection, another in Milton is optimistic about its future.
Renew Energy filed bankruptcy documents Friday for its plant in Jefferson, which started production in 2007.
Eighteen miles to the south, United Ethanol in Milton is confident about its prospects, a spokeswoman said today.
"The economy is difficult right now for the ethanol industry, but United Ethanol has made smart business decisions," said Dori Lichty with United Ethanol. "Things are coming along as well as they can in this type of environment...
"We're pleased with where we're sitting given the ethanol industry's situation."
The Milton plant began producing ethanol in March 2007. Last year, it began capturing and selling carbon dioxide released during the process, and it also sells wet and dry distillers grain, another byproduct.
The company is auditing itself in anticipation of its annual report and investors meeting in March, Lichty said.
The city of Milton agreed to give the company a grant of $811,000 when it approved a developer's agreement in 2005. A group opposed to the plant estimated the city spent about $5.8 million in tax incremental financing funds on the plant.
At the time, Administrator Todd Schmidt said he expected the plant to generate $7 million for the TIF.
Milton Mayor Nate Bruce this morning said the city has not had any indication that United is in trouble financially.
"I think the company we have is probably one of the more stable companies," Bruce said, noting that United is a large, diverse cooperative that gets corn from a variety of sources.
"I don't have fears at the present time, and we haven't been contacted by United Ethanol," he said.
Renew Chairman Paul Olsen told the Wisconsin Ag Connection that his company plans to continue producing ethanol fuel in Jefferson and run its state-of-the-art corn dry-milling operation.
Court filings indicate Renew owes creditors more than $100 million.
The company hopes to emerge from bankruptcy in mid-year "through a balance sheet restructuring or a sale of the business," it said in a statement.
Olsen said sources have told him at least three other ethanol plants in the state likely will close before March 1. He did not elaborate.
Ethanol plants around the country are struggling to survive. Experts blame a weak demand for fuel and volatile corn prices. Gas prices have fallen, and corn prices have risen, which force producers to pay more in input costs, strip profit and cut output.
"The harsh reality is that there aren't many, if any, Wisconsin ethanol producers making money right now," said Joshua Morby, executive director of the Wisconsin Bio Industry Alliance. "Our industry is still quite new—the first plant in Wisconsin was built in 2000—and we're going through a tough time in the business cycle."
When it comes to filling their vehicles' tanks, consumers have short memories, Morby said.
"The long term forecast is that gas is going to shoot up in price again, and when it does, the ethanol industry will be there to help relieve that burden on consumers by reducing our dependency on foreign oil and producing a cleaner burning, renewable source of automotive fuel that adds jobs and benefits the Wisconsin economy," he said.