News & Ideas

ACE conference holding timely discussions on strategies for ethanol producers to overcome the margin squeeze

Sioux Falls, SD (August 5, 2019) – The American Coalition for Ethanol (ACE) annual conference, August 14-16, will host a timely general session discussion on ways for ethanol producers to diversify their revenue stream through coproducts, considering the margin squeeze many ethanol plants are facing today. Join ACE at the Omaha Marriott Downtown at the Capitol District next week to hear from leading technology providers and producers on strategies available for ethanol plants to become more efficient and remain profitable.

Several articles published recently about poor profit margins at ethanol plants, one citing a CoBank report, noted how low margins drive plants to diversify revenue through coproducts, “The ethanol plant of today could turn into the corn biorefinery of tomorrow.” This important topic will be covered during several conference breakout sessions, as well as the general session panel “Steps to a Biorefinery,” with speakers from Fluid Quip Technologies (FQT), ICM Inc., and ACE member plant Golden Grain Energy (GGE), moderated by consulting firm Ascendant Partners Inc.

“In the current environment, producers must make critical decisions related to maximizing short- and long-term profitability,” said Steve Hartig, ICM Inc. Vice President of Technology Development. “Producers should view ethanol plants as true biorefineries and implement processes to capture the most value possible from the ethanol, animal feed and corn oil streams. Reducing costs and maximizing plant efficiency, while important, will not be enough long-term. Other options must be considered, including the addition of value-added product offerings by the plant.”

“Diversification of revenue is paramount for the industry today and to be truly sustainable now and well into the future,” said Neal Jakel, Vice President of Strategy and Technology Development at FQT. “Our partners operating our MSC™ protein systems are averaging 10 to 17 cents per gallon EBITDA which is critical when ethanol margins are tight. MSC is a robust technology, producing an established consistent product that plants can look to for proven revenue and risk diversification today,” Jakel added.

“The world has seen an increased demand for plant-based protein in recent years,” said Chad Kuhlers, GGE COO. “By 2050, global demand is expected to increase 80 percent over current levels due to population growth in African countries and increased wealth in Asia. It is important for ethanol producers to recognize this trend and help to supply the world’s protein demands by further refining and processing their coproducts to not only meet world demand, but also add value to their coproducts,” Kuhlers added. “These facilities need to be viewed as a biorefinery and every aspect of the facility needs to be optimized to capture as much value as possible.”

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