Future of ADM’s Columbus Nebraska dry mill ethanol plant uncertain

Source: By JIM OSBORN, Columbus Telegram • Posted: Thursday, February 18, 2016

COLUMBUS — Archer Daniels Midland’s recent launch of a strategic evaluation of the future of its dry mill ethanol plants could impact the Columbus plant, but how remains unclear as the nation’s largest ethanol producer strives to boost returns while grappling with lower profit margins and oversupply.

Earlier this month, ADM announced the review of the company’s dry mill ethanol assets that, despite cost reductions, have been operating at historically low profit margins.

ADM CEO Juan Luciano said recently that even with the improvement in costs, company officials are concerned about the long-term future of the dry mill ethanol part of the industry.

ADM has spent $1.3 billion since 2006 to build two dry mills in Columbus and Cedar Rapids, Iowa.

Luciano told industry analysts during a recent earnings call that the Chicago-based company was going to run through the different scenarios all the way from one extreme to the other during the review, but there was no rush to get it done.

“The whole operation is having positive cash flows, positive contributions, so there’s no need to panic,” said Luciano, according to excerpts from the earnings call released by ADM.

Jackie Anderson, a media relations spokeswoman for the company, said “we do not have any further details to share about any potential impact to the Columbus dry mill at this time.”

In Columbus, ADM operates both a corn wet mill and dry mill along with a number of facilities to support both. The wet mill is not part of the review process.

Dry mills produce ethanol, corn oil and distilled dried grains, or DDGs, which are used in animal feed. The company makes several different food, fuel and feed products from corn in addition to ethanol at its Columbus and other wet mill facilities.

Steve Dewald, manager of ADM’s ethanol plant just east of Columbus, did not return phone messages seeking comment on the local impact of the company’s strategic review.

While the review is underway, ADM officials expect the dry mill cost improvements to continue, Luciano said during his recent call with industry analysts.

“And we have seen in 2015 improvements in enzymes, improvement in yields, improvements in corn oil recovery,” Luciano said. “So we’re very pleased with what the teams are doing in that. It’s just we have an industry problem and we want to see how we can participate in addressing that through strategic options.”