After a change in direction and leadership, San Juan Bioenergy is seeking a change in ownership.
The plants board of directors made the decision to sell the co-op at the end of October, said Chief Executive Officer Erich Bussian. The move came just more than a month after Bussian took the reins at the plant, replacing founder Jeff Berman.
Selling the plant was not a consideration when Bussian assumed leadership, but recent discussions among the board have highlighted the need for change, Bussian said.
It really wasnt on the table (in September), Bussian said. When I took over the role, I knew the company wasnt particularly in great shape, but we took our time sort of making an assessment of what really made sense.
A heavy debt load and the downturn of the economy prompted the decision to sell, Bussian said.
The biggest challenge was where do we find the $2 million to fund the crop for this year, he said. The banking universe has changed, and they are not in a position to lend to us.
The board of directors considered a number of options before choosing to sell the plant, including seeking a partner company with experience in vegetable oil production.
We went down this path with a number of different companies, trying to find common ground, Bussian said. But when we really started to assess the efficiency of the plan and then looked at the debt we were carrying, the picture became clear. It was a classic case of an underfunded company coupled with an extremely bad economy. It just didnt make sense to continue without some significant capital. The numbers just werent penciling.
San Juan Bioenergy opened in Dove Creek in 2005. The original intent of the project was to develop a grower base for sunflowers and safflowers and the use of sunflower oil in the production of biodiesel. The recession, however, prompted plan investors and officials to reconsider the original purpose.
Rather than abandoning the facility entirely, plant officials decided to take the plant in a different direction and continue to use the seed being produced in the region, turning the Dove Creek facility into a vegetable oil crush facility.
Crop production in Dolores and Montezuma counties started small, with just 80 acres the first year, said Dan Fernandez, director of the Dolores County Extension Office. Production grew each year, however, and Fernandez currently estimates between 12,000 and 15,000 acres of sunflower and safflower in the two counties.
There are always going to be shifts in production from time to time, Fernandez said. But the acreage went up on the sunflowers this year, and the safflower went up substantially.
Area producers wont face significant impacts from the loss of the local market, Fernandez said. Good prices and quality outside markets have provided a cushion for those looking to sell crops.
Everybody was hoping that they could grow a crop here and deliver here, but there is a positive side, Fernandez said. We were initially hoping to have 10 to 12 cents a pound, and right now it is at about 20 cents a pound. So for this season with no local market, the prices are very good, and there is a solid outside market. Right now, it is looking good.
The majority of producers in the area have found buyers for this years crop, Fernandez said.
I believe the upper majority have found markets, he said. Im not aware of anybody at this point who doesnt have a home for their crop.
Both Fernandez and Bussian hope a buyer will be secured who will continue to provide a local market for the burgeoning sunflower and safflower crops.
We are planning to take the company to auction, which gives us the greatest chance of the highest price for the facility, Bussian said. That would probably happen in early February. I want to reiterate that the goal of the management team and board is to do everything we possibility can to place this plant in the hands of somebody who is going to operate it and see that the plant is a functioning part of Dolores and Montezuma counties.
Producers who have questions regarding the sale of the plant or questions regarding this years crop may contact Bussian at 946-4342.