Business Review
Renewable Energy - Ethanol

 

Jeff Briggs, Chief Operating Officer, is focused on maximising Green Plains’ operating efficiencies to achieve the lowest cost per gallon of ethanol produced. Through process improvements in its ethanol production segment, Green Plains’ plants are now capable of sustained production at or above nameplate capacity levels.

 

Well Positioned at the Intersection of Agriculture & Energy
Green Plains Renewable Energy, Inc. (NASDAQ: GPRE), in which NTR had a 35.82% associate holding at year end, made significant progress during the year and established a strong position as North America’s fourth largest ethanol producer. The company is committed to maintaining leadership through a focused approach on strengthening and diversifying its vertically integrated ethanol value chain from grain sourcing and storage, through to ethanol production, marketing and distribution.

 

The US ethanol market is the largest supplier of renewable motor fuel in the world, supplying over 260 million barrels of ethanol in 2010 for consumption in automobiles. Green Plains’ disciplined approach to risk management and integration of recently acquired production facilities ensures that it is well positioned to seize opportunities for future growth and increased market share in its industry.

 

Leading Vertically-Integrated Ethanol Producer
During the year, Green Plains expanded its ethanol production capacity by 45% with the acquisition of two ethanol plants in Nebraska. Added to the four previously held ethanol plants Green Plains operates in Indiana, Iowa and Tennessee, total annual ethanol production capacity stood at approximately 500m gallons (mmgy) at the end of 2009.

 

Green Plains also expanded its third-party marketing and distribution services to four independent plants totaling 360 mmgy. Added to the output of the company’s own plants, GPRE ended the year with the capacity to market and distribute 860 mmgy, or approximately 8% of US ethanol demand.

 

Subsequent to year end, Green Plains acquired Global Ethanol, LLC., increasing its production capacity by 31% and enabling it to market and distribute more than one billion gallons of ethanol production annually.

 

Green Plains’ interest in Blendstar LLC broadens the company’s reach into the biofuels blending and distribution business, adding to the company’s diversified revenue and income streams. Blendstar has expanded its network of renewable fuel terminals to nine facilities with 495 mmgy of throughput capacity per year.


Solid Contributions from Agribusiness Segment
The company’s agribusiness segment accounts for 20% of total operating income and provides Green Plains with the upstream ability to leverage and influence the company’s main input, corn. The acquisition of five grain elevators in 2010, with 11.7 million bushels of storage, increased capacity by 63% to 30.3 million bushels of grain storage. Green Plains’ expansion of its agribusiness operations around its ethanol production facilities enables the company to strengthen its relationships with local producers and source corn more effectively.

 

Disciplined Risk Management & Strong Balance Sheet
Green Plains’ disciplined approach to risk management underpins the company’s profitable growth in a challenging economy. A comprehensive risk management system, that provides real-time monitoring of commodity price risk exposure at each plant, enables Green Plains to respond quickly and lock-in favourable operating margins in a dynamic commodity market.

 

In March 2010, Green Plains completed the sale of 6.3 million primary shares of common stock to institutional and retail shareholders, generating net proceeds of approximately US$79 million. The company has reported that it intends to use the proceeds for general corporate purposes and to acquire or invest in additional facilities, assets or technologies consistent with its growth strategy.

 

Green Plains achieved full-year profitability in 2009 (year-ended 31 December 2009) of US$0.79 EPS or approximately US$20 million of net income on revenues of US$1.3 billion.

Green Plains Renewable Energy, Inc.

Jeff Briggs, Chief Operating Officer, is focused on maximising Green Plains’ operating efficiencies to achieve the lowest cost per gallon of ethanol produced. Through process improvements in its ethanol production segment, Green Plains’ plants are now capable of sustained production at or above nameplate capacity levels.
Green Plains’ disciplined approach to risk management and integration of recently acquired production facilities ensures that it is well positioned to seize opportunities for future growth and increased market share in its industry.