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Blog posts tagged in Capital Planning

Many independent ethanol plants are at a crossroads regarding how to continue to maximize value for their shareholders while staying relevant in the marketplace.  Several options exist and all have significant implications regarding liquidity, distributions & shareholder alignment.

Ø  Reinvest & Retain Capital

Ø  Merge or Some Offshoot of a Merger

Ø  Sell

 

 

While most successful ethanol producers conduct strategic planning exercises to lay out the future priorities for the business, comparatively few effectively tie in a formal capital planning process to ensure the appropriate capital strategy and structure are in place to support the achievement of the defined strategic priorities.

Posted by on in Ethanol

The fundamental problem is a combination of ethanol production being up at the same time motor gasoline demand is down and ethanol production hitting the blend wall of 10%.  Average annual gasoline demand is down over 10% from the peak in July of 2007. The Energy Information Administration projects gasoline demand to be down another 0.34% in 2012 and down slightly in 2013.

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