ProVision Partners

Wisconsin Ag News Headlines
Construction Halted at NPP Biodiesel Plant in Evansville
Wisconsin Ag Connection - 11/09/2007

Higher commodity prices for their crops is one of the reasons why many farmers decide to get involved with the biofuels business. But ironically, that same scenario is starting to back-fire for investors of the North Prairie Productions biodiesel plant being constructed in Evansville. This week, investors were sent a letter from the NPP Board of Directors informing them that construction of the $42 million facility has been 'temporarily suspended' because of the cost of soybean byproducts.

"Since we commenced construction, commodity prices have risen to historic highs," the letter stated. "Since August of 2007, soybean oil prices have increased approximately seven cents per pound, or 20-percent. Given that site work is still in early stages, the decision [to suspend construction] is intended as a prudent course of action to conserve investor equity until commodity prices return to a level at which we can expect to operate profitably."

The letter also noted that the decision to halt the project until 2008 was made unanimously by the directors. The board will now conduct a thorough project review and budget analysis before making any further decisions.

"It is the board's intention to resume construction of the biodiesel plant at the earliest opportunity if market forces indicate a renewed outlook for profitable operations," the letter said. "We expect and hope to recommence construction at some point in 2008."

As Wisconsin Ag Connection reported during the summer, construction of the project got off to a late start because of unexpected legal procedures. But site work was finally able to began in August.

NPP first unveiled its plan to construct the plant in August 2006 after a study was released by the Wisconsin Soybean Marketing Board about the feasibility of a soybean crushing facility being operated in the state. The company then held an equity drive for six months in order to raise $25 million for the facility.

Meanwhile, Landmark Services Cooperative, which is located next to the NPP construction site, announced they were willing to partner with the state of Wisconsin and the city of Evansville to begin the financing process of a long awaited soybean crushing facility. That resulted in a state budget provision which provided a $4 million grant toward the development of the crushing facility.

Once completed, the new NPP biodiesel plant was expected to produce up to 45 million gallons of biodegradable, biodiesel fuel per year and bring in more than $127 million in annual revenue to the area.

Other Wisconsin Headlines
L&L Sales and Service
U.S. Custom Harvesters, Inc.
Copyright © 2020 - All Rights Reserved.