Shift in Growth

From greenfield to acquisition-based model
By Holly Jessen | March 10, 2011

With its latest ethanol plant purchase Green Plains Renewable Energy Inc. now owns more plants purchased out of bankruptcy than plants the company has built itself. Otter Tail Ag Enterprises LLC, a 55 MMgy ethanol plant located in Fergus Falls, Minn., is GPRE’s fifth plant purchased out of bankruptcy since 2009.

The company was formed in 2004 with the goal of constructing and operating dry mill ethanol plants. Between August 2007 and November 2008 the company started producing ethanol at four plants in Iowa, Indiana and Tennessee.

The shift started in 2009, when GPRE purchased its first two distressed plants from VeraSun Energy Corp. The purchase of plants in Central City, Neb., and Ord, Neb., made the company the fourth largest ethanol producer in North America. In 2010 GPRE added two Global Ethanol LLC plants to its list. The latest acquisition came only a few months later in early 2011 when it purchased the 55 MMgy Fergus Falls plant for $55 million, or $1 million per million gallons of production.

All told, GPRE now owns and operates 735 MMgy of ethanol production, a number that is likely to go up as the company works to increase efficiency and capacity at its plants. However, if GPRE’s goal is to pass up Valero Renewable Fuels, which currently holds the No. 3 ethanol producer spot, it still has a ways to go. The 2010 fall map put Valero at total capacity of 1,100 MMgy. 

—Holly Jessen