Hoku facility sees lifeline - idle, but not abandoned
Updated On: Aug 01 2013 10:41:36 PM CDT
The gates of the unfinished Hoku plant most likely will not be sitting idle for too much longer.
The Bannock County Development Corporation is discussing options for the plant's future with Hoku's Washington-based contractor, JH Kelly.
Since Hoku filed for bankruptcy in early July, Kelly has been trying to figure-out ways to salvage the facility in order to bolster the community's economy.
"We're here to work with the community," JH Kelly Senior Vice President Mark Fleischauer said. "We have always been supported by them and we just want to try to make the best out of a bad situation. We can't right all the wrongs of Hoku, but we can try to contribute as best we can."
Fleischauer also said his company already paid the 543 Idaho employees who helped build the facility, along with the 104 subcontractors as well.
The development corporation's executive director John Regetz said he is pleased to see JH Kelly trying to create the best situation possible since the company is willing to invest its resources to make sure the situation lends itself to ensuring the best outcome.
"They've reached out ahead of time to plan on this and then they're willing to work with us and collaborate with us," Regetz said.
In efforts to attract big businesses to the facility, Fleischauer noted JH Kelly stepped-in and volunteered to foot the $70,000 bill each month in the plant's upkeep costs because he said he does not want to leave the facility abandoned.
Regetz also mentioned bringing a new polysilicon producing company into the old facility would be ideal.
"Polysilicon production is everybody's first choice because it would create the most jobs, it would employ the investments that have been made there, and hundreds of millions of dollars would be utilized fully," Regetz added.
He said, initially, an addition of 200 jobs were proposed for operating the facility as a polysilicon producing plant.
Fleischauer said the important point about Wednesday's meeting was the fact that he wants to leave a "footprint of integrity" and honor all commitments made with the community.
The other, less-viable option for JH Kelly, would be to tear-down the plant and sell it for scrap. Fleischauer said, he hopes this will never happen.
He said the plant is currently now under the control of the trustee and it is his responsibility to maintain and maximize its value for the creditors.
But, Hoku did not leave much behind, including a non-existent trust fund to take care of the leftover, unpaid expenses.
On Friday, Fleischauer said JH Kelly will give the trustee $20,000 during the hearing in Pocatello, where they will ask the judge to approve that transaction.
Regetz said the reason why Hoku initially went under, was due to the plummeting price of polysilicon as the plant was being built. At $400 per kilogram, he said the price now sits at a low approximation of $30 per kilogram, which reflects the price it takes to produce it, leaving a poor margin there, if any.
At that time, there was also a tremendous spike in polysilicon-producing companies worldwide.
So far, no further details have been given about the bidders or who will be moving in. But, Regetz agreed that with JH Kelly's bold financial move to salvage an abandoned plant, there has to be a positive indicator - a certain degree of financial confidence, if you will, that something big will be moving in, nonetheless.
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