Tuesday, November 7, 2023, 5:17 pm News Flash Archive

Today, at an early morning meeting with its oil mill employees held at the Chamber of Commerce, Oxbow Crush COO Richard Kim announced layoffs of over a dozen employees.

Later in the morning, another meeting was held with office employees, where more layoffs were announced.

Reached for comment this morning, Oxbow Crush COO Rick Kim stated the following:

Oxbow Crush made the difficult decision to reduce the size of our workforce in Greenwood.

Since attempting to operate the plant this year, it was discovered that some pieces of equipment are in worse condition than believed when we acquired the facility.

Oxbow is working with various industry experts to develop a scope of work to procure and install replacement equipment necessary to properly restart operations, and a timeline to complete this work is still in development.

According to one former employee, the oil mill had tried to restart operations several months ago, but at a July meeting with employees, it was announced that "major renovations" were necessary in order to run efficiently.

At that time, they were told that nobody would be laid off.

But now three months later, the renovation plan is still in the development stage, with the costs going up and up, as more problems are being discovered.

Denver based Thoroughbred Agrifuel Holdings purchased the oil mill from UMB Bank in August 2022. UMB Bank had purchased it five months previously at the auction of bankrupt Express Grain's assets.

Frank Brumfield ended up buying the grain warehouse side of the business from UMB Bank, naming the new company "Delta Grain Company."

Thoroughbred obtained the oil mill facility in Greenwood, and is trying to restart it under the name "Oxbow Crush."

To see our previous reporting on the sale of Express Grain's bankruptcy assets, view here: UMB Bank transferring Express Grain assets to FSB Companies and Thoroughbred

According to a press release issued last December by Oxbow Crush, it had lined up financing from a group of investors including The Energy and Minerals Group, Yorktown Energy Partners XII, L.P., Solaris Energy Capital, and Thoroughbred Holdings.

That same month, Kim told the Greenwood Commonwealth that the oil mill would be back in operation by the end of March 2023.

The oil mill was plagued with inefficient operations even before the Express Grain bankruptcy.

During the early days of Express Grain's bankruptcy, its court appointed management, CR3, was ordered by the court to liquidate the remaining inventory of grain, meal, and oil. From August 2021 (before bankruptcy was filed at the end of September) through February 2022, the oil mill continued to operate, but according to reports filed in the bankruptcy case, on most days it did not reach "break even" point.

See one such report here: Soybean Crush Break Even Chart

In addition to regaining efficient operation of the facility, Oxbow Crush is faced with correcting several environmental and safety issues.

MDEQ informed Express Grain that it could not restart the soybean oil extraction process until it corrected a significant hexane leak. Hexane is a highly refined petroleum solvent used to extract the oil from the ground up meal. Hexane was escaping during the process into the atmosphere.

To read our previous reporting on the hexane leak problem, see here: Bankrupt Express Grain seeks to correct various problems with some of its previous court filings

More recently, various electrical code violations were discovered, and the "motor control centers" are going to have to be torn out and replaced, an expensive project.

The employees being laid off were promised that Oxbow would pay them two months' wages through the end of the year.

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To read all our coverage of the Express Grain bankruptcy case, see here: Index of Express Grain articles

 

John Pittman Hey
The Taxpayers Channel

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