Abengoa update: Hugoton cellulose to ethanol plant idled

Abengoa reportedly lays off staff at Hugoton and other US locations

Abengoa has reportedly laid off staff at its Hugoton, Kansas, cellulosic ethanol plant and other facilities and offices worldwide, reports Biomass Magazin.

Last month Abengoa indicating its previously announced framework agreement with Gonvarri Corporación Financiera, a company belonging to Gonvarri Steel Industries, was terminated, citing a failure to meet certain conditions to which that agreement was subject. Under the agreement, announced Nov. 8, Gonvarri was expected to make a €250 million ($265.9 million) investment in Abengoa.

According to an Abengoa executive cited financial difficulties as the reason for the layoffs, noting the company does not have sufficient funds to continue paying wages. The employee indicated Abengoa’s Arizona offices have been closed, with the entire staff of the Hugoton facility laid off, with the possible exception of a few upper management positions.

Regarding operations at the Hugoton plant, the employee noted the facility was idled in November, adding that the facility could possibly be reopened in the spring.

According to the employee, the Hugoton facility produced enough cellulosic ethanol to sell a rail car of product to Chevron before the facility was idled.

A search of recent court records by Biomass magazine shows CHS Inc. filed a lawsuit against Abengoa Bioenergy New Technologies and affiliated companies on Nov. 23 related to Abengoa’s failure to pay under contracts for the shipment of corn. The complaint alleges Abengoa owes CHS nearly $4.91 million for corn delivered to Abengoa plants located in Colwich, Kansas; York, Nebraska; and Ravenna, Nebraska during September and October.