The company began ‘Ultra-High Protein’ manufacturing at its facility in Shenandoah, Iowa in April 2020, with it looking to meet the growing global appetite for sustainable protein in livestock feed, aquaculture diets and pet food.
Employing new technology to mechanically isolate the highest value part of the kernel in the traditional ethanol process, last month it announced it had produced a product with a 58% protein concentration level, compared to conventional DDGS at 30% protein content, and conventional soybean meal at 48%.
The milestone was achieved through the deployment of combined Fluid Quip and Novozymes technology at the Shenandoah plant.
“From the onset of this initiative, we anticipated achieving higher protein levels and we are reaching these goals much earlier than expected. This breakthrough is a game changer, and to the best of our knowledge has never before been accomplished in a dry mill biorefinery. Utilizing the power of this innovative platform, we are developing solutions for a world that is deficient in proteins while accelerating the development of value-added ingredients,” said Todd Becker, CEO, Green Plains.
Securing such high protein levels at full commercial scale is further validation that the company’s transformation strategy is on track, he said. “We believe our financial goals for 2024 can be realized as we accelerate our plan to consistently produce premium products.”
The company also reported that it has initial offtake and sales agreements for most of its 2021 ‘Ultra-High Protein’ production for use in pet food, poultry feed, aquaculture feed and dairy rations.
Additionally, Green Plains is focusing heavily on the production of clean sugar production and renewable corn oil, a raw material that has actually seen its price double in the past year on the strength of renewable diesel demand, and specialty alcohol. The idea is that such higher value streams will provide the company with more predictable earnings than the more volatile ethanol market.
US ethanol production saw a 13% decrease last year due to the COVID-19 pandemic, and lower gasoline demand, costing the industry around US$4bn in sales. However, analysts say the sector may recover fully by 2023, based on larger exports: the US ethanol sector is structurally oversupplied and depends on foreign markets to offload surplus production and stocks.
Capital generation
Also validating the company’s transformation journey was its equity raising exercise earlier this month, said Walter Cronin, Green Plains’ chief commercial officer, on a call with FeedNavigator.
The company’s estimated net proceeds from the common stock offering were around US$191.1m and the notes offering reached about US$222.5m after deducting the initial purchasers’ discounts and commissions and estimated offering expenses.
Protein mega trend
A keen observer of the whole industrial agricultural space, Cronin provided some insights into the evolution of the Green Plains’ business model. “We had been watching the soy complex and soy producers making money over the last decade, and the few record margin years from 2015 to 2017, with all of that stemming from world protein demand, a mega trend that was not going to come to a conclusion anytime soon.
“As we observed how well the soy processor was doing we looked around the landscape and saw that corn was in supply and would continue to be in supply but it was evident there was not going to be a huge quantum jump in national corn yields that would all of a sudden change the economics.”
Green Plains had always produced a lot of distillers grains and the team were of the view that if they could crack the commodity component – the corn kernel – into valuable components, if they could apply the right technology to exploit its protein potential, that was the pathway to profitability. In that context, they reviewed a number of companies, and various technologies. “Then two years ago, we chose Fluid Quip Technologies as the vendor of choice and we installed that in our Shenandoah plant. We are now coming up on a year of operations.”
The US developer is also relying on its partnership with Novozymes, which has extensive expertise in microbiology, to achieve the purity in protein production.
Green Plains has plans to install Ultra-High Protein technology at its Wood River, Nebraska plant in July this year and at its Obion, Tennessee facility next February, with the intent to implement the technology across its entire biorefinery platform.
Species targeted applications
January saw it team up with Ospraie to buy Fluid Quip Technologies; the buyout, it said, would help Green Plains expand its renewable corn-oil production capabilities, as well as broadening its product offerings, and accelerating the deployment of its Ultra-High Protein technology. “Our vision is to continue to innovate,” said Cronin.
And it is not just about crude protein levels either.
Green Plains wants to work with its customers in the feed and pet food space to help them address some of their challenges, working to become a nutritional solutions provider.
“We are moving into these higher value applications that can be species specific, and the unique nature of our corn and yeast blend allows the product to be dynamic, not like soybean meal, which has not evolved its nutritional characteristics in decades. We have invested in the science; we have a lot of ongoing studies in different animal categories,” said the CCO.
The team sees the protein ingredient as not being a direct replacement for other protein inputs but more a cornerstone ingredient in feed. In terms of aquaculture diet innovation, Green Plains has the necessary expertise on board, given its Optimal Aquafeed business, which is looking to develop new aquaculture feeds.
The company would eventually be open to marketing agreements with other ethanol producers on the use of the Novozymes technology. “If we were to completely transform the whole market in the US, and every ethanol plant would have this technology, we would peak-out at about 7m metric tons of this high protein material.”
As well as pursuing a method of protein production that does not involve land use change, Green Plains announced an initiative last month that would reduce its carbon footprint. Three of its biorefineries have entered into a long-term carbon offtake agreement with Summit Carbon Solutions (SCS), a subsidiary of Summit Agricultural Group. “By capturing and sequestering the carbon dioxide from our biorefineries, we are able to reduce our carbon intensity (CI) score by as much as 50%.”
Capturing and storing carbon is widely viewed as a key technology for reducing greenhouse gas emissions and combatting climate change, said the company. “With this announcement, the biorefineries attached to the pipeline can dramatically reduce the carbon footprint of their biofuels. In addition, Green Plains’ Ultra-High Protein, renewable corn oil and other sustainable products will become true low carbon ingredients for aquaculture, pet food, dairy and poultry companies and low carbon feedstocks for renewable diesel.”
