Shares of biofuel maker Renewable Energy Group rise a bit in market debut
Source: DAN PILLER • Des Moines Register • Posted: Friday, January 20, 2012
REG had priced 7.2 million shares at $10 per share. Of the offering, 342,860 shares came from selling shareholders.
The offering raised $72 million for REG, which withdrew a $150 million public stock offering in 2008 when market conditions soured.
REG owns or operates biodiesel production plants at Ralston and Newton in Iowa, as well as at Albert Lea, Minn., Danville and Seneca, Ill., and Seabrook, Texas.
It has partially completed plants at Clovis, N.M., Emporia, Kan., and New Orleans.
The company was spun off from the West Central Cooperative of Ralston in 2006. In 2009, REG switched its main feedstock to animal fats in response to cost pressures.
The six existing plants have an annual production capacity of 212 million gallons.
The fortunes of REG and other biodiesel producers have varied with government policies.
In 2010, after Congress allowed a $1-per-gallon blender tax credit to expire, demand and production plummeted, and REG and Iowa’s other biodiesel operations were forced to either shut down or greatly reduce production.
REG, like other biofuels producers, has also fought increasing feedstock costs.
After soybean oil prices doubled from 2007 and 2008, REG switched to animal fats for up to 90 percent of its primary feedstock in 2009.
Last year, after the tax credit was reinstated and a new 800 million-gallon federal mandate was imposed, production and sales increased at REG for the nine months ended Sept. 30 to $518.3 million from $142.1 million, according to the company prospectus.