FALL 2008 ISSUE


A Decade of Transformation



As POET marks the 10-year anniversary of its plant in Preston, Minn., employees and original investors, along with the town’s 1,500 residents, share in the celebration.




In 1995, three years before POET Biorefining – Preston, Minn.,opened its doors, Jim Simonson, a farmer and lifelong Preston resident, witnessed the capabilities of ethanol firsthand as he drove home from Florida in the dead of winter.


The brutal cold was causing many drivers’ gas lines to freeze, and disabled cars and trucks littered the highway’s perimeters. When Simonson sensed he was in trouble, he pulled into a truck stop for help.


“The guy poured 200-proof alcohol into the tank,” says Simonson, current Chairman of the POET Board. “We got back on the road and got home with no problem.”


That got the wheels turning in Simonson’s head, and he hatched a plan for a farmer-backed ethanol plant in Preston — an idea he brought to the National Corn Growers Association (NCGA), a group dedicated to creating and increasing opportunities for corn producers.


GARNERING SUPPORT


Initially, Simonson, then-Chairman of the local NCGA chapter, was met with some skepticism and hesitation. At the time, the ethanol industry was still largely untested and POET was but a fraction of its current size.


“It was a big decision to invest,” admits Eunice Biel, who is a shareholder along with husband Robert and whose family operates a farm just north of Preston.


But Simonson and other original promoters of the facility were determined. “They called me ‘the bulldog’ because I wouldn’t give up,” he says.


After securing enough farmer investors, garnering support from local banks and researching various ethanol plant operators, POET was brought into the mix. A year prior, a friend of Simonson’s had successfully gotten the ball rolling on a neighboring plant in Claremont, Minn., with the help of POET and the Broin family. Simonson and the others were impressed with POET’s operation, and from there, the idea of an ethanol plant in Preston became a reality. And the initial investment that supporters like Biel were reluctant to make was soon returned to them many times over.


“[In the beginning], we were kind of cautious, but ever since then, we are so glad we did,” Biel says. “Ethanol is just the beginning. Like any technological breakthrough, it just grows and grows, and gets better and better, and becomes more efficient.”


But the plant has done more than satisfy investor demand. It’s provided the community with good jobs, a niche that’s often unfulfilled in rural areas. The facility now employs nearly 40 local residents, including Administrative Assistant Mary Ellen Derby, who has been at the plant since its inception and is a selfdescribed “jack of all trades.”


“It just seemed like a really good opportunity,” she says about applying to work at the plant. “It was something new and exciting, and we were just finding out what ethanol was all about.”


The chance to be part of something so progressive also appealed to Bob Muller, the plant’s Maintenance Manager, who has held the position for nine years.


“It’s a breakthrough industry,” he says. “We’re on the cutting edge of something that, hopefully, 20 years from now is similar to the invention of the computer or the light bulb. In 40 to 50 years, people could look back to this as the start of something big and the beginning of the end of our dependence on foreign oil.”


GIVING BACK


While Derby and Muller initially found the ethanol industry appealing, both credit POET Biorefining – Preston’s stewardship for their many years of loyalty. The plant has become one of the community’s largest supporters.


It has donated to countless community causes, returning nearly $60,000 to the community in the last three years alone. Donations have funded construction efforts for a baseball field and tennis courts, and the purchase of playground equipment for Fillmore Central Elementary School, as well as defibrillators for the fire department. The plant routinely grants college scholarships to area students and even made a donation when the local senior class decided to throw a postprom party.


Local businesses also benefit from the plant management’s commitment to buy local and hire area contractors whenever possible. In a town of fewer than 1,500 people, that philosophy makes a big difference. Preston merchants—a tire shop, a grocery store and restaurants, to name a few—have all profited.


“There’s no doubt about it, it has helped our business—you bet,” says Randy McCloud, Manager of Hanson Tire Service Inc., located about a quarter of a mile from the plant. “There are semis that come in that bring business in. The people who work there come in. It’s helped our business over the years by far.”


When the Preston plant went through an expansion phase in 2001 that roughly doubled its size, local contractor and shareholder Ron Scheevel performed site work through his five-person operation, Scheevel and Sons Inc., along with those the firm hired for extra help. In addition to the expansion assignment, which kept the firm busy for more than two years, the small outfit has performed about a dozen jobs for POET, from grading roads and pouring foundation, to storm sewer labor and small landscaping tasks.


“I can’t emphasize what a good customer they’ve been,” Scheevel says. “It’s been really good for our business, a small hometown excavating company. Our growth came from that expansion project.”


Local farmers also appreciate the proximity of the plant. Previously, because of Preston’s lack of rail, farmers often had to haul grain to the neighboring Mississippi River markets 50 miles away in Winona, Minn., or La Crosse, Wis. Today, farmers can bring their corn directly to the plant for sale.


The plant has created another market for corn, and that increase in demand is a tremendous benefit for corn producers, says Richard Eichstadt, General Manager of the plant and a 10-year employee, who has seen the market dynamics develop over the years. The ethanol that’s made in Preston is transported via truck throughout the Midwest to cities such as Milwaukee, Wis.; Minneapolis, Minn.; and Chicago, Ill.


LOOKING AHEAD


While the concept of converting corn to energy might have been lesser known a decade ago, today, it’s accepted as a boon to the nation’s energy efficiency. “As a young industry, there are few ethanol production facilities that have passed the five-year mark,” says Jeff Broin, President and CEO of POET. “The Preston plant was one of the first ethanol production facilities in Minnesota and also one of the first of several plants managed and built by POET. After multiple expansions, Preston now produces 46 million gallons per year and over the years has displaced hundreds of millions of gallons of oil imports.”


No small feat for a plant that was originally designed to produce just 12 million gallons of ethanol per year. The facility has undoubtedly changed Preston since its inception. Residents, investors and farmers can’t be sure what the next decade will bring, but they see more positive change as a certainty. Wind farm technology is already being utilized in the region, and ethanol has provided some young farmers with a renewed sense of hope for the agriculture industry. Many of those involved with the plant, including Board Member Mike McCaulley, say they want to spread the word about ethanol production and generate interest in other communities.


“It seemed impossible for a group to do something like this,” McCaulley says of POET and the Preston plant. “It’s not impossible to make it happen, but it takes a lot of work. It’s looking for ways to create value right here in your own backyard.”





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