SUMMER 2009 ISSUE


A Little Luck Never Hurts






It was crunch time – December, 1997. Time was quickly running out on Minnesota’s innovative Producer Payment Program, designed to transform the state from being a net exporter of commodity corn and an importer of ethanol to being self sufficient in ethanol production. There was room for only one more new ethanol plant in the program, with multiple groups vying for the final slot. And a group of farmers who hoped to build a 30-million gallon plant in Freeborn County, Minnesota, still hadn’t been able to put together an adequate financing package.


But fortunately for what is now POET Biorefining – Glenville, a combination of events came together at the eleventh hour to make it happen.


“We were fortunate that our startup (and later our expansions) were at the best times you could have done them,” says current Board President Gary Pestorious, a farmer from nearby Albert Lea. “But it never hurts to have a little luck either.”


Ten years after commencing operations in 1999, the result is a success story that has not only improved the lives of POET Biorefining – Glenville’s farmerowners, employees and the surrounding community, but is singular among the POET family of biorefineries. POET-Glenville distinctives include: being the only 100 percent farmer-owned POET biorefinery; being one of only three plants to incorporate POET’s proprietary BFRACTM corn fractionation technology; producing enhanced versions of POET’s animal feed products (as a result of BFRACTM), which are as much as 50 percent higher in protein than standard distillers grains; employing 52 employees, rather than the customary 40 or so for similar-sized plants (also due to BFRACTM); and establishing an exemplary track record of sharing a portion of the plant’s success with the local community.


BEATING THE DEADLINE


The idea for an ethanol plant in Freeborn County started in the early ’90s. Both Pestorious and his lifelong friend and fellow farmer Jerry Janzig of nearby Alden were active in the Freeborn County Corn and Soybean Growers Associations. Later, Janzig served on the board of the Minnesota Corn Growers Association where he first encountered the idea of ethanol.


“It was through the State Corn Growers Association that we learned that we needed to add value to our corn, rather than just shipping the raw commodity out of the county,” recalls Janzig. “I came home and said, ‘Guys, we’ve got to get one of these ethanol plants here.’”


A board was formed to get the process rolling, with Janzig as the first president. From the start, it was the board’s intent that the new organization should be a farmer-owned co-op. In his State Corn Growers activities, Janzig met with ethanol construction and technology companies, and plans for a 30-million plant were conceived.


The board then set out to raise the capital needed to make their vision a reality. While ethanol plants were no longer a novel concept, they soon learned however, that raising money for them, especially from farmers, was still no slam-dunk.


“We could have easily raised the money by opting for an LLC,” recalls Pestorious. “It’s always easier to raise money from business people than farmers, who are more conservative. But it was the board’s mind that it should be farmers who owned this plant, which is why we took the time and effort to go that route.”


Fast forward five years. With the needed funds still not raised and only one spot left in the state’s Producer Payment Program which incentivized new ethanol plants, tough decisions had to be made.


To make this happen and quickly – Pestorious and Janzig turned to POET Design and Construction to take over the engineering. The board also had to downsize their plans from a 30 million gallon facility to one of 13 million gallons.


With revised construction plans, the financing finally came together.


“It took more teamwork than anyone will ever know,” says Pestorious. “But between POET’s leadership and track record, the Producer Payment Program, our county’s Tax Increment Financing (TIF) district, our electrical supplier’s government loan program plus a long-term electricity contract, and help from our local banker John Lindeman, we were able to finance the project with only 20 percent equity, which is less than any other ethanol plant.”


Ground was broken in March of 1998, and production began in March of 1999. The board entered a management agreement with POET, which continues to this day, to manage the new plant and market its products.


“It’s been a good relationship,” says Pestorious, who became Board President in 1999. Of the years of hard work and time it took to make the new plant a reality, Pestorious says, “I could write a book.”


EXPANSIONS AND REFLECTIONS


After construction of the initial plant, expansions soon followed. “Before the concrete was hardly dry, we were starting construction to double our size to 30 million gallon capacity,” recalls Janzig. “Raising money for expansion was much easier than start up, because the first time nobody believed we could do it.”


The first expansion was completed in 2001, and a subsequent expansion in 2006 took the plant up to 43 million gallon capacity, plus added the BFRAC and BPX technologies, which enhanced the plant’s corn fractionation and process efficiencies. With the BFRAC addition also came 12 new employees, who are required to run that technology around the clock. General Manager Rick Mummert doesn’t expect those additions to be the final ones, either.


“We’ve got a very aggressive farmer board,” observes Mummert. “When cellulosic technology becomes available, I’m sure they’ll be one of the first to jump into it. We’re also sitting on 400 acres, which opens up lots of possibilities.”


For their part, two of those aggressive farmer-directors feel pretty good about what they and their fellow board members helped to create.


“The thing I enjoyed most was to be a part of bringing a successful project to our area,” reflects Pestorious. “It’s helped 500 local farmers, who in turn have helped implement dealers, truck sales, local banks and the entire community.”


Referring back to the Minnesota Producer Payment Program, Janzig is proud of his organization’s contribution as the last plant to make it into that program.


“A study by the state auditor’s office found that for every dollar the state put into the program, $16 was returned,” says Janzig. “I think that’s a pretty good investment.”


Career Opportunities of a Lifetime – At Home


RICK MUMMERT, GENERAL MANAGER


POET Biorefining – Glenville’s General Manager Rick Mummert wasn’t on board when the facility was conceived or launched. But that didn’t mean he wasn’t keeping a close eye on the developments.


“I’m from this area,” says Mummert. “I watched this facility get built right here in my own back yard – it was really interesting and fun to watch it take off.”


As a local boy, Mummert knew Board President Gary Pestorious, several other board members, and many of the 500 farmer-owners. After two years of operation the original general manager transferred to POET’s Caro, Mich. plant, and the board offered Mummert the position.


“I didn’t know anything about ethanol, but had some good experience in managing people, which is really the most important part of running an ethanol plant,” states Mummert. “So I gladly accepted the job and learned the ethanol part OJT (on-the-jobtraining) style.”


Seven years later he feels fortunate to have a career in his home community.


“When this whole thing started, I never had any idea that I’d be working here, but now I’m a strategic part of it and I’m enjoying the opportunity. I’m proud of POET and this plant,” says Mummert.


RYAN GOODMAN, COMMODITIES MANAGER


Ryan Goodman was driving a truck for a local company. One evening he was reading the newspaper and noticed an ad for a commodities assistant for the new ethanol plant. He thought it sounded interesting, so he applied and was hired.


“I didn’t know anything about ethanol or commodities, but I learned a lot fast,” says Goodman. Within a couple of years, there was an opening for a commodities manager and Goodman was promoted.


Goodman says that he really enjoys the small, tightknit atmosphere and the relationships with other Glenville employees and the co-op’s 500 farmer members, who he frequently sees in the community. He also enjoys the opportunity to participate in community activities.


“POET’s a good place to work, and I could see myself retiring from here,” says Goodman. “I’ve only got 35 years to go.”


JENNI HANNA, ADMINISTRATIVE ASSISTANT


Even before there was a POET Biorefining – Glenville, Jenni Hanna was its first employee.


“In the earliest days, this group of farmers leased office space at the Albert Lea – Freeborn County Chamber of Commerce and that included a certain amount of office support, which was me,” recalls Jenni Hanna, who was a Chamber employee at the time. “I told them, ‘If you ever get this thing off the ground, remember me – I’ll come to work for you.”


As things progressed, the farmers remembered Jenni’s overture.


“They told me, ‘We’re ready to take a chance if you are,’” says Hanna, who accepted their offer. “I was in my early 20′s and I figured ‘What do I have to lose?’- to be part of a start-up in my home town – it sounded exciting. I didn’t know a darn thing about corn or ethanol, but I was willing to learn.”


After 12 years working for POET, Hanna describes her job as “awesome,” saying that she likes the variety of something different every day. During her tenure, duties have included everything from assisting with raising initial funds, to working out of a construction trailer, as well as being the membership coordinator, board secretary, go-to person for 500 farmers, handling stock-related matters and much more.


“I’m glad I took that leap of faith,” Hanna says of her decision to take a chance on the fledgling endeavor. “But the directors and their vision had me convinced that there’s no way this thing wouldn’t happen. For a small-town girl to land this kind of a position in a $30 million start-up is a dream come true. I’m very happy.


Ethanol Cares – Giving Something Back


POET-Glenville’s first employee, Jenni Hanna, may have said it best.


“Working for a company that gives back to the community was always one of our dreams,” says Hanna. And since its inception, the organization has made that dream a reality by sharing some of its success with the local community. Some of the projects funded by POET Biorefining – Glenville include:


- A donation for a beautiful new Veterans Memorial for Freeborn County
- A donation to assist with a local hospital expansion
- Support for United Way and Food Shelf, a local food pantry
- Purchase of children’s playground equipment
- Being the first POET plant to establish an “Ethanol Cares” program, which reaches out to those less fortunate at Thanksgiving and Christmas, they assisted 22 families last Christmas
- Purchase (along with a number of POET’s sister plants) of a brand new Ford 150 4X4 flex-fuel pickup, with a gas card, for a deserving local family as part of an Extreme Makeover: Home Edition TV segment


“Giving something back is what it’s all about,” says General Manager Rick Mummert. “That’s just the way people are around here.”





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