Copyright © 2006.
Renewable Energy Group, Inc.
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Ninth Annual Farmer Cooperatives Conference
Bioenergy: Opportunities for Cooperatives in
Marketing Ethanol, Biodiesel, and Byproducts
Gary Haer
Vice President Sales and Marketing
Renewable Energy Group
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Renewable Energy Group, Inc.
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Welcome to Renewable Energy Group, Inc.
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Biodiesel history
– Farmers cooperative began in early 1900s to add value to farmers grain
– Soybeans crushed for patented soybean meal; SoyPLUS
– Methyl ester production as a way to add value to soybean oil
– West Central began producing and marketing biodiesel in 1996
– Began designing and building plants for others
– West Central invested biodiesel into Renewable Energy Group, Inc. in 2006
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Renewable Energy Group, Inc. is only full-service biodiesel company
– Construction
– Production
– Management/Marketing
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Renewable Energy Group, Inc.
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U.S. Industry Biodiesel Sales
Gallons
200,000,000
180,000,000
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
1999
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Renewable Energy Group, Inc.
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2001
2002
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2003
2004
2005
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Assessing the Market
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Considerations
– What feedstocks are to be used and where is supply
– Proximity to other biodiesel producers
– Where will biodiesel be marketed
– What transportation systems are available
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Renewable Energy Group, Inc.
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Transportation/Logistics Mix
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What percentage of plant production will be shipped by truck?
By rail?
Barge?
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Renewable Energy Group, Inc.
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Rail car numbers
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External rail factors
– Current rail situation
– Improvements needed
– Tank car suppliers
– Lead time required for acquisition of railcars
– Lease terms
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Internal factors
– How many cars will be used based on production
– Percentage of product being shipped by rail
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Renewable Energy Group, Inc.
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Trucking
• External considerations
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Local highway systems
Weight restrictions on that system
Local ordinances on traffic
Will road improvements be required? Who will pay for those?
• Internal Considerations
– Ease of backing, moving semis on the premises
– Load-out schedule
– Tank truck cleaning
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Renewable Energy Group, Inc.
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Freight costs
• Procurement of feedstocks accounts for more than 80%
of cost of biodiesel production
• How much does it cost to move from production plant to
the targeted markets?
• Who is responsible for the payment of freight bills
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Renewable Energy Group, Inc.
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REG biodiesel supply chain overview
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Renewable Energy Group, Inc.
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Sales & Marketing
REG Has Built A National Distribution System
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Renewable Energy Group, Inc.
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Maintaining quality through the structure
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BQ-9000 Accreditation
Heat tracing
Certified Marketer
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Renewable Energy Group, Inc.
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Copyright © 2006.
Renewable Energy Group, Inc.
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