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Ethanol Plant Financial Management

Ethanol Plant Financial Management. Governors’ Ethanol Coalition October 2006 Kansas City, Kansas. Economic Impact. National Reduces dependence on foreign oil (President’s AEI calls for 75% replacement by 2025) Rural Communities Jobs Infrastructure Crop prices

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Ethanol Plant Financial Management

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  1. Ethanol Plant Financial Management Governors’ Ethanol Coalition October 2006 Kansas City, Kansas

  2. Economic Impact • National • Reduces dependence on foreign oil (President’s AEI calls for 75% replacement by 2025) • Rural Communities • Jobs • Infrastructure • Crop prices • A 50 mgpy plant = $46 million annual expenditure locally • Uses 18.2 million bushels of corn • Creates 836 jobs across the economy

  3. Risk Management • Commodity Based • Double/Triple-sided commodity • Grain input • Natural gas usage • Ethanol output • Capital Intensive • 50M gallon plant requires $75M to $100M in capital and debt

  4. State Incentives • Why give incentives • Cash incentives • Tax credits • Mandates? • What are the benefits • Encourage value-added/diversify ag sector • The value of the tax incentives are shared among different groups including blenders, ethanol producers and farmers

  5. GEC Support • Who Needs It? • Producing Plants • Plants Under Construction • Proposed Plants • Important role of policy leadership • State emphasis/highlights

  6. Questions? Donna Funk Kennedy and Coe, LLC 250 N. Rock Road, Suite 270 Wichita, Kansas 67206 Phone: 316-685-0222 funk@kcoe.com

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