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August 4, 2009

Plants pool to create new owner

Janesville ethanol plant to be part of larger operation

By Mark Fischenich

JANESVILLE — Residents of western Waseca County have watched the ethanol plant rise out of the corn fields, have watched the seasons change from fall to winter to spring to summer as the plant sat idle, and have watched the ownership change with the seasons.

U.S. BioEnergy, VeraSun Energy, AgStar Financial and, now, Guardian Energy. Officials in Janesville and Waseca have learned to be doubtful, and they weren’t sure what to think of the new group they’d never head of.

The announcement of the pending purchase of the mothballed plant didn’t provide much detail.

“Guardian Energy is a wholly owned subsidiary of Guardian Eagle Investments, formed to own and operate this ethanol facility in Janesville,” the press release stated, adding that it was headquartered in Shakopee and owned by a group of nine existing ethanol plants.

Randall Doyal expects Waseca County, as it learns more about what Guardian Energy is and isn’t, will become increasingly comfortable with the latest owners.

“All of us have been doing this for a while,” Doyal said of the locally owned ethanol plants that pooled their resources to create Guardian Eagle Investments. “We’re not Johnny-come-latelies. We’re not sexy Wall Street bankers — if there is such a thing.”

The Janesville plant will be owned, assuming the sale closes next month, by the owners of six ethanol plants in Minnesota — Claremont (where Doyal is CEO), Winthrop, Winnebago, Benson, Little Falls and Buffalo Lake — and three others in Mason City, Iowa; Malta Bend, Mo.; and Minden, Neb.

The plants first began working together through an ethanol marketing effort, attempting to combine their resources to boost their clout when selling ethanol and related byproducts. That organization — Renewable Products Marketing Group — is now the third largest ethanol marketer in the country.

The idea of purchasing a large facility such as the 110-million-gallon Janesville plant came only after AgStar Financial Services suggested they consider it, Doyal said.

“We’ve been looking at what’s been happening in the ethanol industry — the rush to over-capacity and the dance to Wall Street that was a flop,” he said. “... We like what happens when ownership stays local.”

They also like what happens when plants are owned by people with extensive experience in producing ethanol, and they expect Janesville will, too.

“We have gray hair,” Doyal promised, adding that be doesn’t begrudge any skepticism Waseca County residents have developed in association with the Janesville plant.

“I don’t blame ’em,” he said. “If I was sitting in Janesville, I’d want to see the thing run for a year and make some money.”

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