Poet Keeps Plant Purchase Options Open

December 2, 2008 06:00 PM

Jeanne Bernick, Farm Journal Crops & Issues Editor
Jeff Broin, CEO of Poet, the nation's largest ethanol producer, said his company is continuing to look at dozens of options for purchasing ethanol plants, but would not specifically address the rumor that Poet may be in negotiations to purchase the bankrupt VeraSun Energy Corporation.
Broin spoke at the 12th Annual Farm Journal Forum in Washington D.C. today.
"There are a lot of opportunities out there. We have looked at dozens of options over the last six months and we will continue to look at all of the options,” Broin said.
If Poet were to purchase the nation's No. 2 ethanol producer, VeraSun, the company would collectively control more than a quarter of the nation's ethanol capacity.
In regards to concern about the profitability of the ethanol industry under falling crude oil prices, Broin said that Poet has been around long enough to know how to handle the ups and downs of the crude oil and corn markets.
"I've personally produced ethanol at $10 per barrel oil,” Broin said. "We have seen every price point out there. At $4 corn, we can beat $60 oil prices. As oil falls below that it will have some effect on grain prices. But longterm, we can compete in this range of 60-70 oil pretty successfully. We also have some fantastic technology and we have some trade secrets that will benefit us.”
Regarding potential consolidation in the ethanol industry, Broin said: "I think there are quite a few [ethanol] producers out there that have made some bad bets on corn, and that has been hard on some of those companies. But longterm you will see a very successful industry.”
Look for more news and information from Broin's speech at the Farm Journal Forum on www.FarmJournal.com.

You can email Jeanne Bernick at jbernick@farmjournal.com.

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