FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) May 13, 1997.
HIGH PLAINS CORPORATION
(Exact name of registrant as specified in its charter)
Kansas #1-8680
(State or other jurisdiction of (Commission File
incorporation)
Number)
200 W. Douglas #48-0901658
Suite #820 (IRS Employer
Wichita, Kansas 67202 Identification No.)
(Address of prinicipal
exeuctive offices)
(316)269-4310
(Registrant's telephone number)
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Item 5 Other Information
Wichita, KS, March 12, 1997 -- High Plains Corporation (NASDAQ:HIPC) today
announced a temporary delay in the production of its new Industrial Grade
Ethanol. On March 6, 1997, High Plains was notified that testing by an
independent European laboratory indicated that all required product
specifications were met, with the exception of the "organoleptic" test, which
is based upon the taste and smell of the product. Previous in-house and
independent U.S. testing of the Industrial Grade product had indicated that
it met all specifications of the supply contract, including this organoleptic
test.
"We are disappointed in this delay," said Raymond G. Friend, the Company's
Executive Vice President and Chief Financial Officer. "We have submitted
additional samples for further testing. We have also contacted our process
engineers to evaluate modifications to the process. It is encouraging that
all other specifications of the product have been met, and we are hopeful
that only minor changes to the process will be needed to allow us to meet
this remaining specification."
"We have also been advised that recent changes in Russian import restrictions
have resulted in a temporary oversupply situation in the European Industrial
Grade Ethanol market. Our Industrial Grade customer has therefore agreed to
extend the time for our shipment of product under the contract. In light of
these market conditions, and the difficulty with the organoleptic
specification, we have also contacted other prospective customers for the
product. We believe that a profitable market exists for our current product
regardless of any delays in delivery under our existing contract."
Mr. Friend also explained that, "Although it is unlikely that we will have
any benefit of Industrial Grade sales in this quarter's financials, we have
been able to easily shift the portion that would have been Industrial Grade
production back to Fuel Grade Ethanol production. We are currently producing
100% Fuel Grade instead of the 83% Fuel Grade and 17% Industrial Grade
combination that had been projected."
"Fuel Grade Ethanol continues to be profitable, and we have taken steps to
help protect ourselves from further increases in the cost of our grain
feedstock. We have pre-sold approximately 50% of our estimated ethanol
production through September, 1997, and we have inventories and grain
contracts sufficient to protect the margins on those gallons. Current fuel
ethanol spot prices have increased slightly to $1.08 per gallon at our plant,
and we are still delivering on several contracts under wintertime program
prices of up to $1.40 per gallon."
Based in Wichita, Kansas, High Plains Corporation is the only publicly traded
company whose sole business is Ethanol. It is one of the largest producers
of Ethanol west of the Mississippi River, with 60 million gallons per year of
current capacity. Clean burning Ethanol reduces pollutants in automotive
gasoline and increases octane levels for better engine performance without
increasing gas pump prices.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date May 13, 1997 HIGH PLAINS CORPORATION
Raymond G. Friend
President
