The nation's first major barley-to-ethanol factory has been put up for sale before it ever fully opened in Hopewell.
Osage Bio Energy on Monday cited "unfavorable market conditions" as the reason for its decision to sell the company and its Appomattox ethanol plant in Hopewell.
The company said it will not start production at the plant. Osage said it will lay off all but a "core group" of the plant's 55 employees as it seeks to sell the property.
Heather Scott, a spokeswoman for Osage, declined to say how many employees would remain.
Osage's key investor, the private-equity firm First Reserve Corp. of Greenwich, Conn., decided to sell the company and its assets, Scott said.
"We are very hopeful this is still a great thing for Virginia and Hopewell," Scott said. "It will just be transitioned to a potential new owner that will come in and run this company and produce ethanol."
Osage, founded in 2007, planned to make ethanol for gasoline blends used in local markets.
The company started construction in 2008 on the $160 million plant, located on a 55-acre parcel in Hopewell. The plant was only in production for several days before a fire in September 2010 caused by a mechanical failure interrupted production.
Scott said Monday that the fire was not connected to the decision to the sell the plant.
The plant was expected to bring up to $2 million a year in tax revenue for the city of Hopewell.
"The city is pleased that the new plant has been constructed," City Manager Ed Daley said. "This is a major investment in our community. We are anxious for the sale to be completed so operations can begin."
Daley said he did not know all the components of the plant or what else other than ethanol could be produced there if a buyer could not be found.
The company had planned to produce up to 65 million gallons of ethanol at the plant, using up to 30 million bushels of barley a year, much of it from farmers in Virginia.
Osage obtained barley through Perdue AgriBusiness, which contracts with farmers to grow the crop. "Perdue is responsible for the receipt of the grain, so they will work with the growers on that," Scott said.
(804) 775-8123
Email
Facebook
Google
Twitter
Favorites
More
Advertisement