Good Bet on Ethanol

Three plants pay $20 million to local investors.
By Holly Jessen | February 15, 2011

Three plants located about an hour’s drive from each other made an announcement that gave their investors something to celebrate just before Christmas. Homeland Energy Solutions LLC, Golden Grain Energy LLC and Absolute Energy LLC, all majority owned by local investors, will have completed paying out a combined $20 million in cash distributions by early March. As Rick Schwarck, chairman, president and CEO of Absolute Energy, says, the companies are putting the product back into U.S. gross domestic product. Absolute Energy, 115 MMgy, is located just north of the Iowa border in Lyle, Minn.

Distributions from each plant ranged from $6 million to $7 million. Investors received from 6 to 25 percent of the original value of their shares. The money will shore up the local economy, turning over several times in the community, as members spend their dividends. “In times of pretty tough economics, this is exactly what Iowa needs to keep the economy growing,” says Walter Wendland, who serves as president and CEO of Golden Grain and Homeland, both 100 MMgy plants located near the Iowa towns of Mason City and Lawler, respectively.

Besides the cash distribution, the local communities benefit from a market for corn and jobs. Collectively the three plants process about 120 million bushels of corn from local corn producers, which is turned into more than 350 MMgy of ethanol. Currently there are a total of 140 people employed at the plants, which enjoy stable or growing employment numbers. In addition, the plants produce distillers grains for area livestock producers. 

—Holly Jessen