Mansfield Oil acquires C&N Companies

By Hope Deutscher | June 03, 2009
Report posted July 1, 2009, at 3:25 p.m. CST

Mansfield Oil Co. announced July 1 that it is acquiring C&N Companies, a leading ethanol marketer that represents 500 million gallons of ethanol production and 150 million gallons of biodiesel production capacity.

Mansfield Oil operates 650 bulk terminals and 900 supply points in 48 states. The $5.1 billion Mansfield Oil moved 2 billion gallons of motor fuel in 2008 and saw a 450 percent growth in renewable fuel sales. The company plans to immediately begin marketing C&N products to refiners and blenders.

Jon Bjornstad founded C&N in 2000 to provide ethanol marketing for independent, farmer-owned ethanol refiners. He will continue in his role as president. The Minnesota-based company has grown to represent more than 500 million gallons of ethanol production at 11 plants in the U.S. and Mexico; as well as 150 million gallons of biodiesel.

Doug Haugh, who is executive vice president and chief information officer for Mansfield Oil, is leading the transition team. "It's a substantial investment on our part in the renewable fuels and ethanol business," he said, adding that it gives C&N all the tools, resources, and support needed to continue growing and representing ethanol facilities.

"Prior to this transaction, we had many discussions with our refiner partners," said J. Alexander, president of Mansfield Oil. "And consistently, the message that we received from our refiner partners was that given the substantial amount of physical product that we move on the refine product space and our grasp and understanding of what drives their business, that that is unique from an ethanol marketing perspective. Most of those groups had dealt with C&N and had had excellent service and great reliability and their belief of adding our understanding of the refined product side, that that was going to be a pretty dynamic combination."

Haugh said last year's growth in ethanol and biodiesel sales was a result of the renewable fuels standard, mandated air quality standard, and discretionary blending. The company expects that growth to continue under this acquisition.

Bjornstad said the acquisition provides an advantage for his ethanol plant customers. "We're going to be able to tap into 50-plus year relationships with the blender customers that my ethanol plant customers have in North America," he said. "And that's really important to my ethanol plant clients as we efficiently and effectively bring their product to market. For our plants, at the end of the day, it's all about transportation logistics and the ultimate netbacks that they can achieve."

"We think C&N has a fairly unique model for partnering with their producers and doing so in a transparent basis," Haugh said. "It's very much an open book way of doing business, where both the producer and the buyer, whether it be the refiner or blender, everyone knows exactly what the deal is and how those prices are arrived at and what their participation is going to be and we think folks need to know that, especially with the economic pressure that many of these participants are under today. And that's really been our way of going to business for the past 50 years."

Bjornstad already has a list of ethanol facilities that would like to have C&N market their product; however, he said they will be taken on one at a time to ensure that C&N and Mansfield Oil can provide the best service to the customers.

As a new participant in the ethanol marketing side of the industry, Mansfield Oil believes the acquisition is a good sign for the industry. Mansfield Oil can provide financial certainty that the ethanol producers' product will get to market and get paid for, Haugh said. "We can really create value for folks and continue to allow Jon (Bjornstad) to expand the business."