Bunge North America has sold its stake in an ethanol plant in Iowa, US to Southwest Iowa Renewable Energy (SIRE), as challenges continue to plague the ethanol industry in America.
SIRE repurchased Bunge’s Series B membership units in the plant, effective 31 December 2019. The purchase ends Bunge’s 13-year ownership interest in SIRE; as part of the transaction, directors Andrés Martín and Brett Caplice retired from the SIRE board, with commercial agreements revised.
“Since we first partnered in 2006 and in the following years, through construction and ethanol industry challenges, Bunge has been an invaluable partner for SIRE,” commented Karol King, chairman of SIRE.
“In particular, SIRE benefitted throughout the years from commercial agreements for corn origination and products and in having two Bunge board members, who provided international agribusiness insight to our business.
“SIRE is very pleased today to be in the position to go forward as an entity wholly-owned by our farmer and community members, with Bunge’s ongoing support for our ethanol marketing.”
In addition to repurchasing the stock units, SIRE will take responsibility for originating corn and selling dried distillers grains produced at the plant. Under a revised agreement, Bunge will continue to purchase all of the ethanol produced by SIRE.
“As Bunge focuses our resources on our core businesses, selling our shares in SIRE, while maintaining a relationship, is an attractive opportunity,” added Andrés Martín, North America country manager for Bunge. “Bunge is proud to have been a partner in building and operating this successful ethanol plant and we look forward to continuing to work with the SIRE team.”
Mike Jerke, CEO of SIRE, concluded: “While conditions in the ethanol industry are difficult, with Bunge’s capital support and strategic advice over the years, SIRE is and will continue to be a strong participant in the renewable energy industry and low-carbon economy. We look forward to continuing to work with Bunge on a daily basis in managing our ethanol sales and rail car fleet.”
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