Pacific Ethanol Inc., which counts Microsoft Corp. Chairman Bill Gates among its shareholders, has halted construction of a distillery in California.
The firm was building the 50-million-gallon-a-year plant in the Imperial Valley near Calipatria.
“We remain committed to completing our ethanol project in Imperial Valley,” Pacific Ethanol Chief Executive Neil Koehler said Monday. “However, given current ethanol market conditions, we feel it is prudent and strategic to suspend construction until the market improves.”
Pacific Ethanol fell 12 cents, or 2%, to $5.99. The shares have fallen 61% this year.
Ethanol on the Chicago Board of Trade has dropped 24% this year as supplies of the gasoline additive exceed demand. The price of corn, the primary source of ethanol made in the U.S., is 13% higher than a year ago. At least seven firms shelved similar projects this year.
Analysts don’t expect ethanol companies that make most or all of their money selling the fuel or ethanol byproducts to be profitable over the next two quarters.