Gary Haer Vice President Sales and Marketing Renewable Energy Group
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Transcript of Gary Haer Vice President Sales and Marketing Renewable Energy Group
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1Copyright © 2006. Renewable Energy Group, Inc.
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2Copyright © 2006. Renewable Energy Group, Inc.
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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3Copyright © 2006. Renewable Energy Group, Inc.
Welcome to Renewable Energy Group, Inc.
• 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
• Renewable Energy Group, Inc. is only full-service biodiesel company
– Construction
– Production
– Management/Marketing
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4Copyright © 2006. Renewable Energy Group, Inc.
U.S. Industry Biodiesel Sales
0
20,000,000
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120,000,000
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200,000,000
1999 2000 2001 2002 2003 2004 2005 2006
Gallons
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Assessing the Market
• 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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Transportation/Logistics Mix
• What percentage of plant production will be shipped by truck?
• By rail?
• Barge?
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Rail car numbers
• External rail factors
– Current rail situation
– Improvements needed
– Tank car suppliers
– Lead time required for acquisition of railcars
– Lease terms
• Internal factors
– How many cars will be used based on production
– Percentage of product being shipped by rail
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Trucking
• External considerations– 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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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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REG biodiesel supply chain overview
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11Copyright © 2006. Renewable Energy Group, Inc.
Sales & Marketing
REG Has Built A National Distribution System
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12Copyright © 2006. Renewable Energy Group, Inc.
Maintaining quality through the structure
• BQ-9000 Accreditation
• Heat tracing
• Certified Marketer
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13Copyright © 2006. Renewable Energy Group, Inc.