Red Trail Energy (RTE) is located in Richardton, ND. SkunK believes this is the eighth planned Greenshift COES with a scheduled install date of 30 June 2009. In a letter sent to members, seen here in a Feb 10th SEC filing, we get a look at how this Ethanol Plant sees the future. No specific update on the Greenshift COES, however it is interesting nonetheless. The talk of the advantage over Natural Gas heated plants, I believe has to do with them being the first ethanol plant that is coal fired. A popular thing when neighbors mine coal. Another tidbit is this North Dakota Plant is less than 200 miles from the Montana Seed Crushing plant - just a small jaunt, (a stones throw), in Big Sky Country.
"In spite of the current economics in the industry, we continue to remain optimistic that margins will improve over the next few months for a number of reasons:
1. There is federal mandate (Renewable Fuel Standard passed in the 2007 Energy Bill) in place that requires 10.5 billion gallons of ethanol to be blended in 2009. If margins don’t improve, many more plants will shut down as losses cannot be sustained indefinitely which will correct the supply and demand imbalance very quickly and this should improve margins for the plants that continue to operate.
2. The new Obama administration has shown great support for the biofuels industry and
3. Red Trail maintains an energy cost advantage over natural gas fired ethanol plants which we believe will help RTE remain a viable entity.
RTE is also taking other steps to help ensure the viability of the company. Some of the steps that have already been taken include
1. In response to the negative margins being experience in the industry, we have reduced the plant rate to run at approximately 80% of our normal production capacity. We anticipate running at a reduced rate until margins improve.
2. In an effort to protect the Company from the volatility in the commodities markets, we have changed our corn procurement strategy so that we do not hold as long of a corn position as we have in the past.
3. We have temporarily suspended the employee bonus program beginning in the fourth quarter of 2008 and also eliminated management bonuses for fiscal year 2008. 4. Board members are currently opting out of the compensation they are paid for attending board meetings and committee meetings and
5. We have reorganized our corn procurement department in an effort to purchase more corn from North Dakota farmers and reduce the amount of corn purchased via rail. RTE is currently evaluating other cost cutting measures as well."
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Good Hunting,
SkunK
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