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Ace Ethanol buys closed Oshkosh plant for $16.5 million

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Ace Ethanol agreed to buy a shuttered ethanol plant in Oshkosh for $16.5 million, and intends to re-open it this fall, a company spokesman said.

 

Stanley-based Ace won the bidding for the Utica Energy plant, in a transaction a Winnebago County Court judge approved Thursday.

 

Robert Sather, director of government affairs and a co-founder of Ace, said the sale must be approved by Ace shareholders later this month before it can be finalized.

 

"We'll have it up and running in September and October," said Sather. "We're very confident it will be very profitable in a short period of time."

 

Sather said Ace has between 40 and 45 employees and a similar number of employees will be needed in Oshkosh. The company is looks forward to hiring current and former Utica Energy workers, he said.

 

The purchase price of $16.5 million is less than one-fourth the estimated cost, $75 million, to build a new plant the size of Utica, Sather said.

 

Ace was one of five bidders for the plant, the Oshkosh Northwestern reported.

 

Ace, which formed a subsidiary called Fox Valley Ethanol to run the Oshkosh plant, runs the state's oldest ethanol plant, in Stanley. That plant can generate up to 50 million gallons of ethanol a year, and also supplies distiller's grain, a high-protein livestock feed; carbon dioxide for the beverage industry and dry ice; as well as corn oil.

 

Ace opened its ethanol plant in Stanley in 2002. The Oshkosh plant, with a capacity of 60 million gallons and known as Utica Energy, opened in 2003. It was shut down last fall as financial problems mounted, with debt totaling $30 million, according to the Associated Press.

 

Wisconsin currently has nine ethanol plants

 

http://www.jsonline.com/business/ace-ethanol-buys-closed-oshkosh-plant-for-165-million-b9952811z1-215154391.html

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Too bad this plant didn't "come with" the vast network of blender pumps with their legion of loyal patrons.... :'(

 

Isn't this a VERY reasonable price for this size of a plant?  Would have to make running a profitable operation much more reasonable.

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Go through this area often (Well, not exactly) but just a tad to the south of it on hwy 44.

 

Ain't what the plant WAS, but operating is better than not.

 

And Husker, my sentiments exactly on the network of blender stations :) They are still running, under whatever ownership now, but they just sell gas! Like I said before...we have a couple of good networks of E-85 sellers in Wisconsin that are like those used to be, but the Utica owned ones covered a pretty big area, and were in a few good metro areas too... Green Bay, Fox Cities, Oshkosh and over to the lakeshore.

 

These current good ethanol co-ops are extremely rural for the most part.

 

I would think the plant going to another group already in the business would have to have been a good deal for the buyer to want to get it back up and running ASAP. Turn that 16 mil into some positive cash flow :)

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Bjoe, sept-oct it says. Looks good for those who used to work there.

 

Man, tying into my last post below about the huge variance in this state. The spreads are so utterly horrendous in this area that I am the only one outside of the performance circles buying it. I can't post to the prices site it's too painful lol. But some places it's a buck lower compared to 16 cents here at best.

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I noticed that horrible spread a few weeks back whe  we went up to Road America, hope that helps the prices out your way too!  I couldn't believe how poor the spread was, even the worst we get here was better.

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Bjoe, sept-oct it says. Looks good for those who used to work there.

 

Man, tying into my last post below about the huge variance in this state. The spreads are so utterly horrendous in this area that I am the only one outside of the performance circles buying it. I can't post to the prices site it's too painful lol. But some places it's a buck lower compared to 16 cents here at best.

Hang in there Steve-O. Our spreads have been all over Timbuktu just since I've started using E85. I saw some negative spreads at times during the winter (I think I only had to buy etoh at a negative spread once or twice), so I know it's hard!

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As far as I know this plant is ready to go. It was prepared properly for last winter the winter to avoid damage to piping/coolers/exchangers. I would think the wait is only for new crop corn to come in which will improve corn to ethanol spreads. ACE is a decent group though historically has done little to support any E85 network. 16 Million is a bargain since this plant has a full CO2 capture plant, some oil extraction equipment (though I am unsure who owns that part nowdays), is closest to the Green Bay oil terminal and NE WI dairies for distillers.

 

BTW- I read today that the RIN value is up to $1.13- -could not verify this or find out which type of RIN.

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BTW- I read today that the RIN value is up to $1.13- -could not verify this or find out which type of RIN.

 

 

Yep I seen that yesterday as well....and with ethanol/gas spread on cbot at roughly 55 cents.. E85 spread should be wider than they are in most places.

 

 

 

 

Speaking of which.. Outlaw have you done that math ..what's the formula for rins affecting E85 prices?  I've tried to make sense of it to no avail..

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If you are an ethanol producer or a wholesale non-obligated party- a dollar worth of RIN is directly worth a dollar of value on pure ethanol- so on summer blend- $1x.833=$0.833. Same if you are an obligated party who must go buy a RIN because you are behind in the amount of ethanol you are obligated to move. Only the blender who just needs a tiny amount of RIN might question this value. Of course any major oil company (Shell, Mobil, BP, Citgo, Conoco, etc) would just prefer to not promote a few gal of competitive product (E85)and instead pass the $1 onto a small % of gallons of E10 (maybe 1% of their total they could be short on) and then claim the RFS is making gas WAY more expensive (vs at most 1 cent for RIN in this instance less another 4-8 cents in octane value less another 5-8 cents in cheaper ethanol). Don't miss the fact that oil companies just want to buy ethanol a lot cheaper and would likely to continue selling a lot of E10 anyway now that the terminal storage is all in place because ethanol makes their product so much cheaper and refining margins are so variable they fail to invest building more. What they really want is to be able to blend at will so they can dominate the ethanol market. They sure as heck do not want to promote E85.

 

Just my 2  ;D 

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