RiceBran Technologies Provides Update on Irgovel Facility
17 Sep 2014 --- RiceBran Technologies, a global leader in the production and marketing of value added products derived from rice bran, provided an update on its Irgovel bio-refinery.
Production at the Company's plant in Pelotas, Brazil has resumed after the completion of initial repairs to the ash house, boiler complex and related facilities damaged by a structural breakdown that occurred in late August. The timing of the resumption of production was consistent with estimates stated in the Company's Form 8-K filing on September 3, 2014.
CEO & President W. John Short commented, "After having spent the last week in Brazil, I am pleased to confirm that our Irgovel plant has been restarted and is producing at levels that exceed the maximum pre-expansion capacity. The structural breakdown that occurred in the ash house destroyed about 12% of the bag filters used to collect the ash and clean the exhaust produced by burning rice hulls to generate steam for the plant. While the plant was restarted with a reduced number of bag filters, management believes the initial repairs are adequate to allow the plant to operate through year end. We expect the plant will experience a few more days of downtime before the end of the year to install replacement bag filters when they arrive and to make additional repairs to help further improve production output. More comprehensive final repairs will be made at the end of the year when Irgovel shuts down for normal annual maintenance. Most operators in the rice industry in Brazil shut down for annual maintenance in late December and early January."
Short continued, "Our expectation is that the plant will run above the maximum pre-expansion capacity of 6,000 metric tons for the remainder of the year but less than the planned average of 9,000 metric tons per month. After the completion of final repairs, we expect the plant to meet and exceed original post-expansion production forecasts as we move into 2015."
As a result of the temporary shutdown at Irgovel and the temporary reduction in production levels, revenues from the Company's Brazil segment will be negatively impacted for the remainder of 2014 until final repairs are completed during the annual maintenance period. Upon completion of those repairs the Company sees this incident having no material impact on Brazil segment revenues in 2015.
The Company believes that the structural breakdown resulted from the use of sub-standard materials by one of the contractors responsible for the construction of the ash house and other facilities that are part of the expansion projects. Management intends to pursue all available legal remedies against the contractor.
