Biofuel maker Gevo has idled its Luverne, Minn., plant as markets for its products, particularly ethanol, have been whacked by coronavirus-induced economic disruptions.
Gevo will close the Luverne plant "for the foreseeable future" and has terminated 30 employees who worked at the Minnesota facility and its Englewood, Colo., headquarters, according to a filing Tuesday with federal securities regulators.
Gevo ferments corn in Luverne to produce isobutanol, which is used to produce jet fuel at the company's refinery in southeast Texas. The Minnesota plant also makes ethanol, which is added to gasoline.
The COVID-19 outbreak has greatly restricted travel by airplane and automobile, hammering demand for fuel. Ethanol prices had already been historically low over the past year even before the coronavirus crisis.
"The COVID-19 impact on ethanol prices gives a clear view that in the near term we, unfortunately, needed to lay off employees," Gevo CEO Patrick Gruber said.
Despite the closure, Gevo said it will continue trying to raise money for a planned isobutanol expansion at the Luverne plant, and carry on with engineering efforts for the project.
"We are going all-in on pushing to secure the funds for the buildout of Luverne," Gruber said.
Gevo also said Tuesday that its remaining employees who earn above a certain dollar threshold, including senior executives, have agreed to take a 20% cash salary reduction over the next three months, with the 20% portion to be paid in stock instead.
While Gevo's bio-jet fuel has shown promise, the company has lost around $28 million in each of the past two years. Gevo's stock was trading late Wednesday at 70 cents, down from about $2 two months ago.