Gevo, Inc. announced today that due to the impact the COVID-19 virus has had on the economy and Gevo’s industry, Gevo has suspended production operations at its production facility in Luverne, Minn., for the foreseeable future. In connection with the suspension of operations and the overall economic disruption caused by COVID-19, Gevo also made the difficult decision to terminate 30 employees, cutting across Agri-Energy’s operations at the Luverne facility and Gevo’s headquarters in Colorado. The remaining employees that earn above a certain dollar threshold, including senior executives, have agreed to take a 20 per cent salary reduction over the next three months, with the 20 per cent portion to be paid in stock. With these steps, Gevo expects to save several million dollars of cash burn during 2020.
Gevo expects to continue the production of renewable isooctane and sustainable aviation fuel from the plant in Silsbee, Tex. Additionally, Gevo intends to continue developing its hydrocarbon business, including the planned expansion of the Luverne facility, and will continue to move forward in securing the project funding needed to expand the Luverne facility. The expansion is designed to allow Gevo to produce large quantities of low carbon isobutanol, sustainable aviation fuel and renewable isooctane.
Gevo also expects to continue engineering efforts for the expansion of isobutanol production and the construction of a commercial renewable hydrocarbon production facility, as well as additional decarbonization projects at the Luverne Facility. Furthermore, Gevo plans on continuing the development of its biogas projects in Northern Iowa, ensuring it is available for the plant expansion.
“The COVID-19 impact on ethanol prices gives a clear view that in the near term we, unfortunately, needed to lay off employees. This was an extremely hard decision, but these steps will provide us with additional runway and optionality without losing focus on what makes Gevo unique, namely our technology and business systems,” said Patrick Gruber, CEO. “We are going all-in on pushing to secure the funds for the buildout of Luverne, and we expect a second site to produce the quantity of gallons we already have and expect to have under contract for delivery in the 2023/24 timeframe. Contract negotiations for large quantities of hydrocarbons are continuing to move forward. This tells us that customers are looking past the current market disruption to the future, where de-fossilized fuels would be in demand. We expect to soon announce the hiring of a strategic advisor investment bank that will help us raise money for our expansions at the project level.”