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Valero restarts ethanol plant

Vicki Vaughan | The San Antonio Express-News

SAN ANTONIO — Valero Energy Corp. has restarted production at a corn ethanol plant in Indiana that was shuttered more than two years ago by its previous owner.

Locally based Valero bought the plant in March from Illinois-based Aventine Renewable Energy Holdings Inc. for $34 million, boosting the number of its ethanol plants to 11.

Valero has been preparing the plant for a restart since its purchase. Because the plant has been shuttered for almost two years, “it took a lot of preparation and maintenance,” Valero spokesman Bill Day said, but the company didn’t have to add any new equipment.

During the time between the purchase and restart, “we had to take a look at the equipment, draw up procedures for running the equipment, hire people to do that and train them to do that,” Day said.

Valero has hired 60 workers so far and plans to hire five more as it reaches full production.

The plant is expected to boost Valero’s ethanol production to 1.3 billion gallons annually, putting it behind only Archer Daniels Midland Co. and Poet LLC in ethanol production.

The plant’s location at the Port of Indiana-Mount Vernon offers access to corn suppliers as well as rail, truck and barge transportation, Valero has said.

Refiner Valero took a big step into ethanol production in 2009 when it purchased seven corn ethanol plants from bankrupt VeraSun Energy for $477 million.

Related: Pipeline to deliver crude to Valero plant

By February 2010, Valero had purchased three more ethanol plants, taking its total expenditures on the plants to $750 million.

Valero’s ethanol business has been performing well. In the second quarter, operating income jumped to $187 million from $95 million in the year-earlier period.

Gross margin in the quarter rose to $1.04 a gallon from 65 cents.

At the start of 2013, ethanol producers were struggling to deal with the effects of a historic drought, the Renewable Fuels Association said in its 2014 Ethanol Industry Outlook.

But by the end of 2013, U.S. farmers had produced the biggest corn crop ever and ethanol plants produced an estimated 13.3 billion gallons of ethanol in for the year, the second-highest output ever, the association said.


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