Poet looks at bankrupt ethanol plants
NEW YORK (Reuters) - Poet, the largest U.S. producer of ethanol, is interested in buying new distilleries including ones from recently bankrupt companies, and has "multiple trade secrets" that could help make them profitable, the company's chief executive said.
"We're looking at all of the opportunities out there that reasonably fit within our model," Jeff Broin, the chief executive of privately held Poet, told the Reuters Global Energy Summit by telephone.
"I hate to speculate on when any deal would close, but we are continuing in discussions on other projects."
The U.S. ethanol industry has been plagued since late last year by dismal fuel demand, volatile prices for corn, its main input cost, and the credit crunch.
As a result, most top pure play ethanol companies other than Poet have filed for bankruptcy protection. Units of Pacific Ethanol Inc (PEIX.O) that own four ethanol plants filed for Chapter 11 protection last month. California-based Pacific reported 2008 revenue of more than $700 million.
In April, Illinois-based Aventine Renewable Holdings Inc AVRNQ.PK filed for bankruptcy protection. The company said it had nearly $800 million of assets and nearly $491 million of debts at year end.
Broin said Poet was looking at a range of facilities including the ones at Aventine and Pacific.
"We have been aggressively looking at all of the opportunities that are out there," said Broin. "We are talking to several at this time and so we'll see how they shake out."
Poet's criteria for new plants includes location, design, markets and price.
Poet develops its own technology for distilling ethanol which the company says has helped its 26 plants across seven states in the Midwest remain profitable on average even during a tough time for making the fuel. Broin said its plants are currently running a bit above break even, on average, and he expects the company to make a profit this year.
Broin said Poet could improve any facility it purchases as it has "multiple trade secrets we can bring to add profitability to some of these plants."
(Reporting by Timothy Gardner and Michael Erman)