September 7, 2016
When Spanish renewable energy company Abengoa Bioenergy filed for Chapter 11 bankruptcy earlier this year, it left people a little anxious in the communities of Ravenna and York, where two of its ethanol plants are located. Now, it appears the people in those communities can rest easy.
In August, Green Plains Inc. announced it was the successful bidder of three ethanol plants for sale by Abengoa Bioenergy, including one in York, as well as plants in Madison, Ill., and Mount Vernon, Ind. In addition, Kaapa Ethanol announced it was the successful bidder of the Abengoa Bioenergy plant in Ravenna. Both acquisitions are expected to be completed no later than Sept. 30.
ABENGOA PLANTS PURCHASED: In August, Green Plains Inc. announced it was the successful bidder of three ethanol plants for sale by Abengoa Bioenergy, including one in York (pictured here). Kaapa Ethanol announced it was the successful bidder of the Abengoa Bioenergy plant in Ravenna.
Todd Sneller, administrator of the Nebraska Ethanol Board, says the acquisitions are a positive step for the Nebraska ethanol sector.
"When proceeds are enjoyed by Nebraska-based companies, many times their shareholders are Nebraskans. So Nebraskans are a beneficiary of those production efforts. I think that's oftentimes an overlooked fact," Sneller says. "That's really important that those dollars are coming back to Nebraska."
Chuck Woodside, CEO at Kaapa Ethanol, notes the company now has 13 years of operating experience in the Minden area, less than 50 miles away from the Abengoa plant in Ravenna.
"We're also a locally owned, farmer-owned ethanol plant. A lot of our owners live around Ravenna. There is also a whole other set of customers we'll serve for wet distillers grains," says Woodside. "With the added facility, there is no single plant risk. This really can give a lot of comfort to our participating customers about our ability to serve them."
It's also a good strategic location for Kaapa, Woodside adds. This includes the ability to share knowledge and employees with their Minden location, less than 50 miles away.
"That exchange of knowledge and sharing I think will make both locations a lot more efficient," Woodside says. "We're going to have to make some significant investments in the Ravenna facility, and we'll do it from the perspective that we know what we've got at Minden. In some cases we'll buy farmers' beans north of our [Kaapa Grains] facility at Elm Creek, and I think this makes natural contact for them to market their corn."
"We continue to focus on making strategic investments in high-quality assets as we expand our production footprint," Todd Becker, president and chief executive officer at Green Plains, said in a statement issued in August. "The Madison and Mount Vernon plants will give us access to the Mississippi River, supporting our new export terminal planned in Beaumont, Texas. In addition, we will broaden our product offering globally with industrial alcohol production at the York plant. These acquisitions further our commitment to deliver long-term value for both Green Plains Inc. and Green Plains Partners shareholders."
For corn growers, the benefit comes from having a continued steady demand in a local market.
"Almost 45% of the corn in the state is going into these plants, and farmers don't have to go very far to market that corn," Sneller says. "I think that demand factor, the consistency, the reliability, the credibility of those buyers is really well understood as being a really important part of the Nebraska demand for corn and having that local demand for corn without having to incur additional transportation costs."
It's also beneficial for cattle producers to have access to distillers grains, especially in Nebraska, the No. 1 state for cattle on feed.
Although agriculture is a big benefactor of ethanol plants, the benefit isn't just in agriculture. There are also numerous allied industries that benefit with jobs across sectors, from engineering to finances to technology and hardware development.
"When a plant is sitting idle or up for sale, there's a lot of anxiety in the community. In most of these smaller communities, there are 45 to 50 jobs at stake," says Sneller. "These are jobs that tend to be well above the highest manufacturer pay rates — sometimes $12,000 to $15,000 above the highest rate in the manufacturing sector. The fact that that anxiety is calmed down, and every one of the employees at the Ravenna plant is offered the opportunity to stay on, that is important really for that community."
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