Ergon Inc last week said it will pull the plug on an ethanol plant in Mississippi, while Green Plains Inc (NASDAQ:GPRE) was on Monday reported to be closing two ethanol facilities in Iowa amid weak profit margins.

Citing industry sources, Reuters reported that Green Plains' plant in the town of Superior has been idled until additional notice and that the company's facility in Lakota will be closed soon. Also, the ethanol maker's plant in Fairmont, in Minnesota, is operating at half of its capacity. According to the article, the plants account for some 20% of the company's production capacity of about 1.48 billion gallons (5.6 billion litres) ethanol a year.

Green Plains officials, however, have disputed the report. Jim Stark, vice president of media relations, was cited by Radio Iowa as saying that the company is not closing any ethanol plants. He said that production at the Superior plant is on hold, with the plant's 46 employees remaining onsite, and that the Lakota facility is still producing ethanol. The company adjusts capacity up and down based on market conditions, which currently are not favourable, Stark explained.

Ergon, meanwhile, said that its subsidiary Ergon BioFuels LLC plans to shut down its 56.5-million-gallon-per-year ethanol plant in Vicksburg, Mississippi in December.

Ergon chief operating officer Kris Patrick cited "continued erosion in margins, coupled with underperforming production equipment and the economic challenges of being a destination plant" for the decision.


Article by Renewables Now: Ergon shuts down Mississippi ethanol plant, Green Plains reportedly closing 2 in Iowa