Grainnet

Jeff Broin Interview: As Industry Consolidates, POET Looks for Opportunities to Add Capacity

by Myke Feinman, BioFuels Journal Editor

Portland, IN--Jeff Broin, POET president and CEO, said the Sioux Falls, SD-based ethanol producer is looking at opportunities to purchase existing ethanol plants.

Broin told BioFuels Journal on Sept. 14 he feels as the industry matures, it is moving toward consolidation.

POET celebrated the grand opening of its latest plant, POET Biorefinery, Portland, IN, Sept. 14 with an open-house attended by approximately 3,000 local citizens and dignitaries.

With the opening of the Portland plant, POET is now the largest producer of ethanol in the world at 1.1 billion gallons per year.

The company operates 21 plants across the Midwest.

The new 65 million gallon per year (MMGY) plant represents the 27th constructed by POET since the company was founded 20 years ago.

Consolidation Opportunities

"A couple of opportunities have surfaced to purchase plants," Broin said, "but we haven't finalized any deals yet. If the opportunity presents itself to purchase the right plant, we'd be interested."

He mentioned that sometimes a plant in operation may wish to sell to a larger company for a number of reasons, such as financial issues.

However, sometimes locally-owned plants choose to sell to a corporation that precludes retention of ownership on a local level.

By contrast, while POET is looking at acquisitions, Broin noted, the company is willing to negotiate with the plant’s local owners to maintain their stake in the plant.

"Plants also have the option of joining our management team and gaining access to our technology and expertise while retaining ownership," he said.

POET's 21 plants across the Midwest have 10,000 farmer-owners and investors from all walks of life, Broin said.

Not only is local ownership important to POET, but so is helping communities grow.

When POET sites an ethanol plant, Broin said, it first looks at the local grain supply.

"We will not build a facility if we would use more than 55% of the available local corn supply," Broin noted.

Broin said POET works with local communities, local, state and federal government officials to review water availability, access to a Class 1 rail line and close proximity to natural gas supplies.

For example, the Portland plant will be utilizing excess water from an adjacent quarry for its ethanol production, allowing ethanol to be produced without lowering the city's water table.

The Portland plant will use 22 million bushels of corn, produce 178,000 tons of Dakota Gold brand dried distillers grains with solubles (DDGS), and employ 38 to 40 full-time people with a local payroll of $1.8 to $2.1 million.

The plant has rail access to a Norfolk Southern Railroad main line. The $105 million plant took 12 months to construct. It started grinding corn for ethanol production Sept. 18.

For more information, call POET at 605-965-2200.