ADM to acquire Prairie Pride soy crush and biodiesel plants
Photo: Prairie Pride Inc.
April 5, 2011
BY Bryan Sims
Decatur, Ill.-based agribusiness firm Archer Daniels Midland Co. has agreed to acquire a soybean crushing facility and 30 MMgy biodiesel production plant from Prairie Pride Inc. in Deerfield, Mo. ADM will also form a partnership with PPI for the biodiesel portion of the business.
PPI responded to ADM’s acquisition of its soy crushing and biodiesel production assets, stating,
“Earlier this year, in conjunction with a division of General Electric, we worked to find partners and potential purchasers of the crush and biodiesel facilities. After a bidding process conducted by GE, ADM has agreed to purchase the debt held by GE and will become our primary creditor. Not only has ADM offered to infuse more capital into the crush and biodiesel facilities, they also have requested that Prairie Pride participate alongside ADM in the future of the biodiesel facility.”
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Al Decker, treasurer of PPI’s board of directors, told Biodiesel Magazine that the biodiesel plant ceased production in February last year and has sat idle prior to ADM’s stepping in with the acquisition. Decker said the company had spent over a year working for a solution to resume operations, but the company became financially distressed, citing the lapsed tax credit as the primary culprit behind the decision to halt production. The Deerfield biodiesel plant broke ground for construction in 2006 and began producing biodiesel in 2007.
“We were down to a minimum staff, basically for maintenance and security reasons at the plant,” Decker said, adding that ADM will likely evaluate whether to retain PPI personnel or expand staff with ADM employees, or a combination of both at the site. “We’re tickled to death to have the [plant] up and running again.”
For ADM, the acquisition of PPI’s soy crush and biodiesel production assets was attractive because it further highlights the company’s growth strategy in the U.S. and internationally.
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“ADM’s growth strategy involves expanding the volume and diversity of crops that we source and process; expanding the reach of our origination, transportation and processing assets and expanding our value-added product portfolio,” ADM said in an email correspondence. “The Prairie Pride facility will increase our North American crush capacity and it fits well within ADM’s integrated business model.”
As for PPI, the company is confident that ADM will achieve PPI’s goals its investors originally set out to meet when they invested in the project five years ago.
“Prairie Pride has faced many challenges over the past several years,” PPI’s website states. “The board of directors believes, after considering all material facts and circumstances, that a long-term relationship with ADM gives our members the greatest potential to receive returns on their investment without the necessity of infusing more capital into Prairie Pride. We are hopeful that this will be a successful and profitable business relationship, and that the crush and biodiesel facilities will purchase local soybeans and provide local jobs in the future.”
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