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Disciplined Risk Management.
We believe risk management is a core competency of ours. Our primary focus is to lock
in favorable operating margins whenever possible. We do not speculate on general price movements by taking unhedged
positions on commodities such as corn, ethanol or natural gas. Our comprehensive risk management platform allows us to
monitor real-time commodity price risk exposure at each of our plants, and to respond quickly to lock in acceptable margins
or to temporarily reduce production levels at our ethanol plants during periods of compressed margins. By using a variety of
risk management tools and hedging strategies, including our internally-developed real-time operating margin management
system, we believe we are able to maintain a disciplined approach to risk management.
Demonstrated Asset Acquisition and Integration Capabilities.
We have demonstrated the ability to make strategic
acquisitions that we believe create synergies within our vertically-integrated platform. We believe acquiring and developing
complementary businesses enhances our ability to mitigate risks. Our balance sheet allows us to be selective in that process.
Since our inception, we have acquired or developed nine ethanol plants in addition to upstream grain elevators and agronomy
businesses and downstream blending and distribution businesses. We installed corn oil extraction technology at each of our
ethanol plants to generate incremental returns from this value-added product. We believe these acquisitions and
improvements have been successfully integrated into our business and have enhanced our overall returns.
Focus on Operational Excellence.
All of our plants are staffed by experienced industry personnel. We focus on
incremental operational improvements to enhance overall production efficiencies and we share operational knowledge across
our plants. Using real-time production data and control systems, we continually monitor our plants in an effort to optimize
performance. We believe our ability to improve operating efficiencies provides an operating cost advantage over most of our
competitors. In turn, we believe we are well positioned to increase operating margins for any facilities that we may acquire in
the future.
Leading Vertically-Integrated Ethanol Producer.
We believe our operations throughout the ethanol value chain reduce
our commodity and operating risks, and increase our pricing visibility and influence in key markets. Combined, we believe
our agribusiness, ethanol production, corn oil production, and marketing and distribution segments provide efficiencies
across the ethanol value chain, from grain procurement to blending fuel. Our agribusiness operations help to reduce our
supply risk by providing grain handling and storage capabilities for approximately 39.1 million bushels. Assuming full
production capacity at each of our plants and those of our third-party ethanol producers, we would market and distribute
approximately one billion gallons of ethanol per year from twelve plants. Our corn oil systems are designed to extract non-
edible corn oil that has multiple industrial uses. Our blending or terminaling facilities allow us to source, store, blend and
distribute ethanol and biodiesel across multiple states.
Proven Management Team.
Our senior management team averages over 20 years of commodity risk management and
related industry experience. We have specific expertise across all aspects of the ethanol supply, production, and distribution
chain – from agribusiness, to plant operations and management, to commodity markets and risk management, to ethanol
Our Growth Strategy
We intend to continue our focus on strengthening and diversifying our vertically-integrated platform by implementing or
further acting upon the following growth strategies:
Expand Marketing and Distribution Activities
. We plan to continue expanding our downstream access to customers and
seeking opportunities to arbitrage markets with minimal risk allocation. We currently participate in ethanol transload and
splash blending services and have begun to expand the capacity of these facilities through organic growth. The expansion of
our capacity will encourage the distribution of blended fuel. We believe that further growth of our distribution efforts will
enable us to continue to capitalize on our vertically-integrated platform.
Develop or Acquire Strategically-Located Grain Elevators
. We intend to pursue opportunities to develop or acquire
additional grain elevators within the agribusiness segment, specifically those located near our ethanol plants. We believe that
owning additional grain elevators in close proximity to our ethanol plants enables us to strengthen relationships with local
corn producers, allowing us to source corn more effectively and at a lower average cost. Since all of our plants are located
within or near the corn belt where a number of competitors also have ethanol facilities, we believe that owning grain
elevators provides us with a competitive advantage in the origination of corn.