Gevo Slumps on Plans to Resume Commercial Output This YearJustin Doom
Gevo Inc., a U.S. biofuel producer backed by French oil company Total SA and specialty-chemicals maker Lanxess AG, fell to a four-month low after reporting that its idled Minnesota plant will resume commercial production in the second half of this year.
The company declined 10 percent to $1.66 at the close in New York, the lowest since Dec. 31.
Gevo is reviewing the manufacturing process at its Luverne, Minnesota, plant to eliminate sources of contamination that forced the company to halt production of isobutanol in September, Patrick Gruber, chief executive officer of the Englewood, Colorado-based company, said in a conference call yesterday.
He expects to resume some production “soon,” and to reach commercial-scale operations by the end of the year.
“We’ll make decisions about how much and how fast to run the plant once we see corn prices, oil prices, isobutanol prices, later this year,” Gruber said.
Investors “are somewhat concerned how much longer it will take for Gevo to successfully ramp up production,” said Rob Stone, an analyst at Cowen & Co. in Boston, who today lowered his 2013 revenue forecast for the company to $12.3 million from $27 million. Isobutanol production in 2013 may be about 1 million gallons (3.8 million liters), compared with an earlier forecast of 5 million gallons, he wrote in a note to investors.
Gevo uses corn to make isobutanol, a compound that may be blended with gasoline or converted into hydrocarbon fuels and chemicals. Its system also works with crop waste and other plant matter.