Gevo Resumes Commercial Production at Closed Isobutanol Site

Gevo Inc. (GEVO), a U.S. biofuel producer backed by French oil company Total SA (FP) and specialty-chemicals maker Lanxess AG (LXS), has resumed production at its only commercial isobutanol plant, which shut down in September. The shares surged the most in five months.

One fermenter at Gevo’s Luverne, Minnesota, plant was restarted last month, and the remaining three will be in production by the end of the year, said Chief Executive Officer Patrick Gruber.

Gevo’s sales plummeted 92 percent in the third quarter from the prior period after contamination issues prompted the Englewood, Colorado-based company to halt isobutanol production at Luverne. The single fermenter isn’t running at full capacity and Gruber wouldn’t say how much of the renewable biofuel it’s making.

When the rest of the fermenters are back in operation “the plant will be fully running normally,” Gruber said in an interview yesterday. “We expect ongoing sales and ramping up in the last quarter.” He declined to provide an output forecast for the year.

Gevo gained 20 percent to $2.07 at the close in New York, the most since Jan. 4.

When the plant opened in May 2012, the company said it would be able to produce as much as a million gallons (3.8 million liters) of isobutanol a month. When it shut down production four months later, Gevo said it needed to adjust the manufacturing process and that output hadn’t reached expected levels. The plant has an estimated annual capacity of 18 million gallons, according to Gevo’s website.

Fermentation Tanks

The facility is now using the proprietary Gevo Integrated Fermentation Technology system, which separates isobutanol from a “broth” in million-liter fermentation tanks, Gruber said. It wasn’t in use when production was halted in September.

“The reason we shut down wasn’t because the technology didn’t work -- we were hit with a microbial contamination,” Gruber said. “Now we are running our GIFT system the way it was designed.”

The company said last month that isobutanol production would resume in the second half of this year, putting Gevo “slightly ahead of schedule,” Gruber said.

Gevo uses corn and plant waste to make isobutanol, a compound that may be blended with gasoline or converted into hydrocarbon fuels and chemicals.

To contact the reporter on this story: Justin Doom in New York at jdoom1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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