Bunge-Ergon ethanol plant closing Nov. 3040 employees at port facility

Published 11:30 am Friday, October 12, 2012

Bunge-Ergon’s $126 million ethanol plant at the Port of Vicksburg will close Nov. 30, bringing to an end a four-year business venture, Ergon has confirmed.

About 40 jobs will be lost, said Warren County Port Commission Executive Director Wayne Mansfield.

“Ethanol plants across the country are struggling,” Mansfield said.

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An email from Ergon spokesman Jim Temple this morning said corn prices — a key driver of the economics of making the fuel additive — have risen to the point where it’s not profitable for Bunge-Ergon Vicksburg LLC to continue.

“In the current market environment, the value of ethanol produced at BEV is not keeping pace with the cost of the corn to make it,” Temple’s statement reads. “BEV will continue to assess market conditions and make a decision regarding the operations of the facility in 2013.”

No announcement on the decision was made by St. Louis-based Bunge North America Inc., which operated a soybean processing facility where the ethanol plant has operated on Haining Road at the Vicksburg port.

Ergon declined comment on job losses and how the plant would be used after it closes.

Ergon’s president of operations, Lee Lampton, said in an email this morning the closing of the ethanol plant will have no effect on Ergon’s plan to build a new administration building and laboratory, which was announced about a month ago.

He said Ergon officials hope to break ground on the buildings in spring 2013.

The jobless rate in Warren County was 9.6 percent in August, down from a revised 11.3 percent in July, according to the Mississippi Department of Employment Security.

The news of the closing came as corn prices shot up 5 percent Thursday on the heels of predictions the nation’s harvest could be the smallest in six years. Corn prices for December delivery rose 36.5 cents to close the day at $7.7325 a bushel in commodities trading. This year’s drought-damaged harvest is expected to total about 10.7 billion bushels, the smallest since 2006, the U.S. Agriculture Department has said.

The plant started making ethanol in June 2008 after a ceremony nearly two years earlier to break ground brought then-Gov. Haley Barbour, then-U.S. Sen. Trent Lott and U.S. Rep. Bennie Thompson.

The plant had employed about 45 people and planned to churn out about 60 million gallons of ethanol annually.

By 2010, requests for a lower fee-in-lieu of property taxes paid to Vicksburg and Warren County were based on reports of less than 54 million gallons of corn-based ethanol coming out of the plant’s fermentation tanks after the first year of production. The substitute tax rate had the company paying a third of the assessed value of the facility.

In September, Ergon Refining, the company’s specialty oils refiner, detailed a phased expansion of its main refinery to allow more types of crude to be processed. A new administration building and a laboratory, both near the ethanol plant, were to be the first parts of the $147 million expansion.

Vicksburg’s Board of Mayor and Aldermen and the Warren County Board of Supervisors OK’d a fee-in-lieu of property taxes once investment hits $100 million, expected in 2014.