Closed ethanol plant to reopen

An ethanol plant shutdown for most of the past two years is getting ready to reopen. The DENCO plant in Morris in west central Minnesota fell victim to a sharp downturn in the ethanol industry in 2007-2008. The plant’s Australian owner, the now-defunct Babcock and Brown Environmental Interests, closed it in January 2009.

A new group of owners, mostly farmers from the Morris area, finalized their purchase of the plant in late August. General Manager Mick Miller says “things have happened really quick”.

Miller says since the sale was closed “we’ve started from scratch”. He says he’s hiring the 30 employees the plant needs to operate.

Those workers are getting the facility ready to start making ethanol again. Miller hopes the plant, to be called DENCO II, will be operational by the end of the month. He says it will produce 25 million gallons of ethanol a year from about nine million bushels of corn.

The downturn which forced the shutdown of the original DENCO operation was triggered by high corn prices. The high prices raised the cost of making ethanol and triggered a wave of U.S. ethanol plant shutdowns and bankruptcies — among them VeraSun, Otter Tail, Greater Ohio Ethanol and Gateway Ethanol. At the worst point about 20 percent of the U.S. ethanol industry was idled. Ironically the high corn prices, over seven dollars a bushel, were largely caused by the ethanol industry’s increasing use of the grain.

Over the past year or so profit margins have improved for the industry and many of the shutdown plants, like the Morris operation, have resumed production.