Poet seeks ethanol buyout bargains
Poet, the US' largest ethanol producer, is engaging in buyout talks with a number of ethanol companies.
Several US ethanol companies have encountered financial battles brought on by volatile market conditions. VeraSun Energy, the second largest US producer, sought bankruptcy protection on 31 October after it suffered significant losses in Q3 due to a dramatic rise in the cost of corn.
Shares of smaller ethanol manufacturers such as Pacific Ethanol, Aventine Renewable Energy Holdings and Biofuel Energy are trading at a fraction of what they once were, creating a pool in which it may be cheaper to buy an ethanol company than to build new plants.
'We feel there is a lot of promise in the future of the ethanol industry,' Jeff Broin, CEO Poet, remarks.
South Dakota-based Poet is looking to add plants that are in the right location with the right amenities. 'I think, quite honestly, some of the plants out there may be stranded capital. They were built in the wrong locations,' Broin notes. 'But there are some that we have significant interest in.'
Poet, which has been making ethanol from corn for more than 20 years, operates 26 plants that can pump out approximately 1.54 billion gallons of the alternative fuel a year on aggregate. The company has brought three plants online in the past 70 days.
Poet has plans to begin construction of at least two new plants in Q2 2009.
Several US ethanol companies have encountered financial battles brought on by volatile market conditions. VeraSun Energy, the second largest US producer, sought bankruptcy protection on 31 October after it suffered significant losses in Q3 due to a dramatic rise in the cost of corn.
Shares of smaller ethanol manufacturers such as Pacific Ethanol, Aventine Renewable Energy Holdings and Biofuel Energy are trading at a fraction of what they once were, creating a pool in which it may be cheaper to buy an ethanol company than to build new plants.
'We feel there is a lot of promise in the future of the ethanol industry,' Jeff Broin, CEO Poet, remarks.
South Dakota-based Poet is looking to add plants that are in the right location with the right amenities. 'I think, quite honestly, some of the plants out there may be stranded capital. They were built in the wrong locations,' Broin notes. 'But there are some that we have significant interest in.'
Poet, which has been making ethanol from corn for more than 20 years, operates 26 plants that can pump out approximately 1.54 billion gallons of the alternative fuel a year on aggregate. The company has brought three plants online in the past 70 days.
Poet has plans to begin construction of at least two new plants in Q2 2009.
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