Piling It On, Strategically - Ethanol Producer Magazine

Article by Susanne Retka Schill - Feb. 16, 2014

Todd Becker says his job is to reallocate as much of the middleman margin as possible to the company’s bottom line. So it may have seemed odd when in the fall of 2012, the company he leads as CEO, Green Plains Renewable Energy Inc., sold 83 percent of its grain storage capacity.

Becker explains that the company wasn’t abandoning the strategy of being a first-handler of corn. The elevator system was making money and reducing risk. “But it wasn’t fully integrated in our supply chain,” he says. “We didn’t actually ship a lot of corn out of our facilities to our ethanol plants. A couple of years ago, we said, ‘We love the grain business, but what if there’s a better way to skin the cat?’” The company decided there is. Green Plains sold 12 grain elevators in Tennessee and Iowa to another ethanol producer with a good-sized grain business—The Andersons—for $133 million. “We had 38 million [bushels of] storage and we sold them 32.6 million [of it], but we’re not leaving the agriculture handling business,” Becker says. “We’re just going to reallocate that capital so it more closely aligns with our supply chain, with direct access to our ethanol production.”

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