Troubled cellulosic plant lays off workers

Source: Amanda Peterka, E&E reporter • Posted: Monday, June 23, 2014

The nation’s first commercial cellulosic biofuel plant is laying off employees as it hangs precipitously on the edge of bankruptcy.

KiOR Inc. had 183 employees as of Dec. 31, 2013, and is now down to 42 at the company’s idled facility in Columbus, Miss., according to a company spokeswoman. Thirteen employees have been let go since Tuesday, and more layoffs could come in the next couple of months.

“In an effort to maintain the plant and business respectful to KiOR’s limited cash flow, we have reduced our Columbus staff to be more in line with the plants’ current operational needs,” KiOR said in an emailed statement. “Given the company’s limited cash flow, we do anticipate additional layoffs as we finish getting the Columbus plant in a 100 percent safe, idled state.”

KiOR’s fall from success story to cautionary tale has been swift.

Last year, it was heralded as the beginning of the domestic cellulosic biofuel industry when it began producing the nation’s first commercial quantities of cellulosic gasoline and diesel at its 13-million-gallon-a-year plant in Mississippi. The company used Southern yellow pine as a feedstock and fed it into a proprietary catalyst system based on oil refineries.

But the company never managed to get on solid financial footing or reach its full capacity at the $225 million plant. Plagued by structural design bottlenecks, reliability issues and mechanical problems, the Columbus plant produced 894,000 gallons of cellulosic biofuel by the end of the year.

In March, KiOR said that its funding situation had become dire and that it had chosen to idle the plant until further notice (Greenwire, March 21).

The company is surviving solely on funding from venture capitalist Vinod Khosla, according to filings with the Securities and Exchange Commission. As of March 31, the date of its latest quarterly filing, KiOR reported a deficit of $604.9 million.