(SOUTH BEND) - An energy company has filed for bankruptcy a couple of weeks after shutting down Indiana's oldest ethanol plant as the ethanol industries struggles with higher corn prices and larger inventories of the fuel.
The plant owned by South Bend-based New Energy Corp. has been up for sale since last year and the Chapter 11 bankruptcy reorganization filing could help in finding a buyer, company President Russ Abarr told the South Bend Tribune for a story Wednesday (http://bit.ly/X8mSyD ).
"The margins have been really challenging in the industry essentially all year," Abarr said. "We are not the only company going through this. There are a lot of other plants that have shut down, slowed down."
New Energy laid off 40 employees this month when it indefinitely idled the plant just west of South Bend. That plant opened in 1984 and can produce 100 million gallons of ethanol a year.
Eleven other ethanol plants and three biodiesel plants have been built in Indiana since 2006, according to the State Department of Agriculture. San Antonio-based Valero Energy Corp. stopped production at its ethanol plant at the central Indiana town of Linden this summer.
Abarr said the Midwestern drought that pushed up corn prices contributed to the company's decline.
"Everything plays into it," Abarr said. "They were all factors. The drought, lower corn harvest, higher corn prices, high ethanol supply, low ethanol pricing, low gasoline demand. Everything has played into it."
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