Green Plains: Biofuels Digest’s 2015 5-Minute Guide

February 5, 2015 | Jim Lane

Green Plains is a vertically-integrated ethanol producer based in Omaha, Nebraska. They currently have an ethanol production capacity of approximately 1.0 billion gallons per year with 12 plants located in Atkinson, Nebraska; Bluffton, Indiana; Central City, Nebraska; Fairmont, Minnesota; Fergus Falls, Minnesota; Lakota, Iowa; Obion, Tennessee; Ord, Nebraska; Riga, Michigan; Shenandoah, Iowa; Superior, Iowa; and Wood River, Nebraska. They also operate an independent third party ethanol marketing business, Green Plains Trade.

At capacity the plants will produce approximately 2.9 million tons of distillers grains annually that will be used as a high-protein, high-energy animal fodder and feed supplement. Corn oil is also a co-product, and Green Plains also provides grain storage through its Subsidiary – Green Plains Grain, with a grain storage capacity of approximately 7 million bushels.

Green Plains acquired a biofuel terminal operator BlendStar in 2011. The BlendStar platform allows customers to source, store and blend ethanol and biodiesel to meet growing demand, now and in the future. Blendstar currently has terminals with a total annual throughput capacity of more than 830 million gallons per year. These facilities accept deliveries by both rail and truck, and offer the same quality controls, safety, security, and back office functionality of a major petroleum terminal.

Green Plains is part of a joint venture called BioProcess Algae to commercialize algae production technology. In addition to Green Plains, the other partners in the venture are CLARCOR Inc. and BioProcess H2O. The project, located at Green Plains in Shenandoah, Iowa, received a grant from the Iowa Office of Energy Independence totaling $4.1 million.

Rankings

The 50 Hottest Companies in Bioenergy, #42, 2014-15

Biofuels Digest Awards: 2012 Industrial Symbiosis Award: Green Plains Renewable Energy, BioProcess Algae

Model

Owner-operator.

The Situation

You’ve known it as Green Plains Renewable Energy — but the name change simply to Green Plains last May, to reflect the diversification of the Company’s operations from a focus primarily related to renewable energy.

Under any name, Green Plains has been in acquisition mode — adding production capacity, and expanding terminal operations. They’ve been recording strong earnings in recent months and the stock has been soaring. Cash and cash equivalents have reached $453 million and that may well indicate that even more M&A activity is on the way.

Certainly the company recently appointed a Chief development Officer and is on the hunt for acquistions in the 6-8X EBITDA range that diversify the company’s revenues from the volatility and high beta of ethanol production.

Past Milestones

In June 2014, Green Plains acquired the assets of Supreme Cattle Feeders from Agri Beef Co. The acquisition included the feed yard doing business as Supreme Cattle Feeders and the Cimarron Grain storage facility based near Kismet, Kansas. The operation consists of approximately 2,600 acres of land that has the capacity to support 70,000 head of cattle and its current grain storage capacity is approximately 3.8 million bushels.

The Company began ethanol production at its 113 million gallon Fairmont, MN ethanol plant in early January 2014. The 115 million gallon per year ethanol plant had been had been mothballed in September 2012 and was acquired iby Green Plains n November 2013.

In November 2013, Green Plains Renewable Energy completed the previously-announced acquisition of two ethanol plants, located in Wood River, NE and Fairmont, MN, from Ethanol Holding Company, LLC, an entity composed of the predecessor owners’ lender group. The acquisition increases Green Plains’ production capacity to over one billion gallons of ethanol per year.

In June 2013, Green Plains Renewable Energy Inc. and Choice Ethanol Holdings LLC signed an agreement to purchase the former Nedak Ethanol plant in Atkinson. The deal includes an ethanol plant with an annual production capacity of 50 million gallons, and an ethanol storage and loading facility approximately 15 miles to the east. Green Plains plans to staff and reopen the plant in the next four weeks.

In October 2012, Green Plains Renewable Energy sold a dozen of its grain elevators, or 83% of its storage capacity in Tennessee and Iowa, to The Andersons for $133.1 million including just over $28 million in debt. The company expects further grain storage capacity expansion near its two ethanol facilities in Nebraska.

In December 2011, Green Plains Renewable Energy executed an agreement to acquire the grain elevator assets of KW Carter Company d/b/a JW Grain located in St. Edward, Nebraska. JW Grain holds 1.9 million bushels of state-licensed grain storage and is located approximately 40 miles from the Company’s Central City, Nebraska ethanol production facility.

GPRE acquired biofuel terminal operator BlendStar in 2011. Before that, they acquired a majority interest in January 2009. The BlendStar platform allows customers to source, store and blend ethanol and biodiesel to meet growing demand, now and in the future. Blendstar currently has terminals with a total annual throughput capacity of more than 830 million gallons per year. These facilities accept deliveries by both rail and truck, and offer the same quality controls, safety, security, and back office functionality of a major petroleum terminal.