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KiOR shuts down production to make improvements

 

 

 

William Browning

 

The facility on The Island that converts wood chips to fuel stopped production in December and remains offline today. 

 

Officials with KiOR, which owns the biomass conversion facility, said Thursday that through the first quarter of 2014 the facility will only operate in order to test several improvements that are being implemented. 

 

The Texas-based alternative fuel company held a conference call Thursday to give an update on its operations. 

 

Fred Cannon, KiOR's president and CEO, said since the company began converting wood chips to fuel early last year, it has produced 894,000 gallons of gasoline, diesel and fuel oil. That number includes the 385,000 gallons that were produced during 2013's last quarter. 

 

But the company has decided to use this year's first quarter mostly to focus on improving its operations, not producing fuel. 

 

Cannon said with the facility out of operation, KiOR "will have the opportunity to begin to implement the Columbus optimization project consistent with the expected timetable." 

 

The company expects many of the improvements to be in place by the end of 2014's third quarter, "with the majority of them in the first quarter," Cannon said. 

 

The company's slated upgrades include placing new equipment in the wood yard that will recover biomass currently being lost in the processing of wood chips, as well as developing new equipment that will enable the plant to get a higher percentage of yield on the conversation from wood chips to gasoline. 

 

KiOR expects the improvement project will require approximately $10 million of capital investments and the company is "actively pursuing a number of ways to finance the project," Cannon said. 

 

The CEO added that the "focused execution" at the facility during the next three months will position KiOR to run the facility in the second quarter "with many of these enhancements already integrated." 

 

"We would expect to see a significant step forward...relative to what we experienced in 2013," Cannon said. 

 

The roughly 100 people who work at the facility will not be affected. 

 

The company also plans to spend $22 million on research and development in 2014.

 

 

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