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Merger and Acquisition Activity
In January 2009, we acquired a controlling interest in biofuel terminal operator BlendStar LLC. The acquisition of
BlendStar was a strategic investment within the ethanol value chain whose operations are included in our marketing and
distribution segment.
In July 2009, we acquired the membership interests in two limited liability companies that owned ethanol plants in
Central City and Ord, Nebraska. These plants, which are a part of our ethanol production segment, were acquired to add to
our overall ethanol and distillers grains production. Following implementation of process improvements, collectively they
have production capacity of approximately 155 mmgy.
In April 2010, we acquired agribusiness operations in western Tennessee which included five grain elevators with
federally licensed grain storage capacity of 11.7 million bushels. The five grain elevators and other assets acquired are
included in our agribusiness segment.
In October 2010, we acquired Global Ethanol, LLC, which owned ethanol plants in Lakota, Iowa and Riga, Michigan.
These plants have production capacity of approximately 160 mmgy and are part of our ethanol production segment, were
acquired to add to our overall ethanol, distillers grains and corn oil production.
In March 2011, we acquired an ethanol plant and certain other assets near Fergus Falls, Minnesota. The plant has
production capacity of approximately 60 mmgy, adding to our ethanol, distillers grains and corn oil production and is part of
our ethanol production segment. We are constructing 1.6 million bushels of additional grain storage capacity at the Otter Tail
plant with completion expected in 2012.
In June 2011, we acquired 2.0 million bushels of grain storage capacity located in Hopkins, Missouri. The grain elevator
is located approximately 45 miles from our Shenandoah, Iowa ethanol plant and is included in our agribusiness segment.
In July 2011, we acquired the 49% interest in biofuel terminal operator BlendStar LLC that we did not previously own.
BlendStar, whose operations are included in our marketing and distribution segment, provides ethanol transload and splash
blending services.
In January 2012, we acquired 1.9 million bushels of grain storage capacity located in St. Edward, Nebraska. The grain
elevator is located approximately 40 miles from our Central City, Nebraska ethanol plant and is included in our agribusiness
segment.
Algae Joint Venture
In November 2008, we formed a joint venture, BioProcess Algae LLC, between us, Clarcor Inc., BioHoldings, Ltd. and
NTR plc, to commercialize algae production as part of our commitment to next-generation biofuels. BioProcess Algae is
focused on developing technology to grow and harvest algae, which consume carbon dioxide in commercially viable
quantities. We believe algae production fits well into our business model since we already engage in the business of
marketing biofuel and feed products. The algae produced have the potential to be used for advanced bio-fuel production, high
quality animal feed, or as biomass for energy production, but the current primary focus is on efficiently capturing carbon
dioxide to grow and harvest algae. Using advanced photobioreactor technology developed from base technology licensed
from BioProcessH2O LLC, BioProcess Algae currently is producing algae at a pilot plant located at our ethanol plant in
Shenandoah, Iowa, sustained by the plant's recycled heat, water and carbon dioxide. Construction of Phase II was completed
and the Grower Harvesters™ bioreactors were successfully started up in January 2011. Phase II allows for verification of
growth rates, energy balances and operating expenses, which are considered to be some of the key steps to
commercialization. The cost of the Phase II project was shared by the joint venture partners. As part of the Phase II funding,
we increased our ownership in BioProcess Algae to 35%.
During the third quarter of 2011, BioProcess Algae constructed an outdoor Grower Harvester system next to our
Shenandoah ethanol plant, and began successfully producing algae. BioProcess Algae also successfully completed its first
round of algae-based poultry feed trials, in conjunction with the University of Illinois. The algae strains produced by the
Grower Harvester system for the feed trials demonstrated high energy and protein content that was readily available, similar
to other high value feed products used in the feeding of poultry today.