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Midwest Agri-ProductsA U.S. Producer since 1957Company Prospectus and Investor InformationMidWest Agri-Products has traditionally been a large grain producer, having produced 75million bushels in 2007. However, U.S. midwestern agriculture is in the midst of a rapidshift from being primarily a food producer to a major source of energy. High oil prices inthe last three years have brought huge investments in ethanol plants throughout theMidwest.MidWest is a growing agribusiness therefore facing a big decision: should we pursueethanol? If so, what are the best strategies? We believe we need to begin looking intoethanol production. The President has called for increased production and use in thecoming years, and not only do we foresee a rush to investment by our competitors, but wealso want to be a part of a venture that helps our nation to meet its energy needs and easethe dependence on foreign oil. We consider ourselves a “green” company in that we careabout the natural environment, including the air and water. We view climate changeissues as strategically important to U.S. industry and consider them an important elementin our corporate strategy and business planning and development.Investors and other companies see us in this light as well. We recently made Fortune’slist of “America's Most Admired Companies,” with “green” being one of thedistinguishing qualities. We are also proud to say we have been named a Fortune “GreenGiant.” Green Giants go beyond what the law requires to operate in an environmentallyconscious manner. We value our corporate reputation and consider ourselves a sociallyresponsible company. Many socially responsible investors continue to invest in ourcompany.Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
Individual Pre-AssignmentAssuming you were hired to assist MidWest Agri-Products in its decision, investigate thecurrent issues, both business and social, surrounding ethanol, considering variousstakeholders and raw material sources. Summarize your research on the current issues ina written document (suggestion: 1-3 pages).Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
Plant NameAbengoa Bioenergy CorporationAbengoa Bioenergy CorporationAbengoa Bioenergy CorporationAbengoa Bioenergy of NebraskaAbsolute Energy LLCAce Ethanol LLCAdkins Energy LLCAdvanced BioEnergyAg Processing Inc.Agri-Energy LLCAl-Corn Clean FuelAltraBiofuels Coshocton Ethanol LLCAmaizing Energy LLCAndersons Albion Ethanol LLC, TheAndersons Clymers Ethanol LLC, TheAndersons Marathon Ethanol LLC, TheArcher Daniels MidlandArcher Daniels MidlandArcher Daniels MidlandArcher Daniels MidlandArcher Daniels MidlandArcher Daniels MidlandArcher Daniels MidlandArkalon Energy LLCAventine Renewable Energy Inc.Badger State Ethanol LLCBig River Resources LLCBiofuel Energy CorpBiofuel Energy CorpBlue Flint Ethanol LLCBonanza BioEnergy LLCBushmills Ethanol LLCCargill Inc.Cargill Inc.Cascade Grain Products LLCCastle Rock Renewable Fuels LLCCenter Ethanol Company LLCCentral Indiana Ethanol LLCCentral Minnesota Ethanol Co-opChief Ethanol Fuels Inc.Chippewa Valley Ethanol Company LLLCommonwealth Agri-Energy LLCCorn LPCorn Plus LLLPCornhusker Energy Lexington LLCDakota Ethanol 5Dec-93ColwichKSMilo / ul-07St. Mar-08WalhallaNDCorn28N/ACedar r-04Wood odNDCorn50Feb-07Garden 0Feb-08MarionINcorn40Mar-07Little c-05WentworthSDCorn502001Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
Dean CEG LLCDENCO LLCDidion Ethanol LLCE Energy Adams LLCEast Kansas Agri-Energy LLCElkhorn Valley Ethanol LLCESE AlcoholFront Range Energy LLCGlacial Lakes Energy LLCGolden Cheese Co. of CaliforniaGolden Grain Energy LLCGolden Triangle Energy Co-op Inc.Grain Processing Corp.Grain Processing Corp.Granite Falls Energy LLCGreater Ohio Ethanol LLCGreen Plains Renewable Energy Inc.Hawkeye RenewablesHawkeye RenewablesHeartland Corn ProductsHeartland Grain Fuels LPHeartland Grain Fuels LP #Heron Lake BioEnergy LLCHusker Ag LLC #Idaho Ethanol Processing LLCIllinois River Energy LLCIroquois Bio-Energy Company LLCKAAPA Ethanol LLCKansas Ethanol LLCLevelland/Hockley County Ethanol LLLifeLine Foods, LLCLincolnland Agri-Energy LLCLincolnway Energy LLCLittle Sioux Corn Processors LPMarquis Energy LLCMarysville Ethanol LLCMerrick/CoorsMGP Ingredients Inc.MGP Ingredients Inc.Mid-Missouri EnergyMidwest Grain Processors LLCMidwest Grain Processors LLCMidwest Renewable Energy LLCMinnesota EnergyNebraska Energy LLCNesika EnergyNew Energy Corp.Burns orn35Jun-05NorfolkNECorn40Sep-07LeotiKSSeed 0Dec-00CoronaCACheese Whey5Jan-85Mason orn20N/AMuscatineIACorn10N/AGranite orn50Jun-07Iowa eron tato 5N/ALevellandTXcorn/milo40N/ASt. arysvilleMIcorn50N/AGoldenCOBeverage Waste3N/AKSCorn / WheatStarch4N/APekinILCorn / WheatStarch78Feb-80Malta IACorn100Nov-02SutherlandNECorn25N/ABuffalo ASouth BendINCorn102N/ACopyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
North Country Ethanol LLCOtter Tail Ag Enterprises LLCPacific Ethanol Inc.Pacific Ethanol-Columbia LLCRosholtSDCorn20Fergus rn35Panda Hereford Ethanol LPHerefordTXcorn100Jun-07fourthquarter2007Parallel ProductsLouisvilleKYBeverage Waste4N/AParallel ProductsRanchoCucamongaCABeverage Waste4Penford CorporationCedar RapidsIAcorn40N/Aend of2007Permeate Refining Inc.Phoenix Bio IndustriesPinal Energy LLCHopkintonIASugars & AAshtonIACorn55Mar-04Big Stone CitySDCorn752002Bingham 0Mar-03Coon ACorn50Apr-05Albert LeaMNCorn45Pine Lake Corn Processors LPPoet Biorefining-AlexandriaPoet Biorefining-AshtonPoet Biorefining-Big StonePoet Biorefining-Bingham LakePoet Biorefining-CaroPoet Biorefining-ChancellorPoet Biorefining-Coon RapidsPoet Biorefining-CorningPoet Biorefining-EmmetsburgPoet Biorefining-Glenville EastPoet Biorefining-GowriePoet Biorefining-GrotonPoet Biorefining-HanlontownPoet Biorefining-HudsonPoet Biorefining-JewellPoet Biorefining-LaddoniaPoet Biorefining-Lake CrystalPoet Biorefining-LeipsicPoet Biorefining-MaconPoet Biorefining-MitchellPoet Biorefining-PortlandPoet Biorefining-PrestonPoet Research CenterPrairie Horizon Agri-Energy LLCQuad County Corn ProcessorsRed Trail Energy LLCRedfield Energy LLCReeve Agri EnergyRenew Energy LLCSiouxland Energy & Livestock Co-opSiouxland Ethanol LLCStandard Ethanol Cambridge LLCStandard Ethanol Madrid 4Mar-06JewellIACorn60LaddoniaMOCorn45N/ALake CrystalMNCorn56May-05fall n50Dec-06Garden CityKSCorn / Milo12N/AJul-07JeffersonWIcorn130Sioux orn44N/AMadridNECorn44N/ACopyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
Sterling Ethanol LLCSun Energy LLCTate & LyleTrenton Agri Products LLCU.S. Energy Partners LLCUnited Ethanol LLCUnited Wisconsin Grain Producers LLUtica Energy LLCVeraSun Albert CityVeraSun AlbionVeraSun AuroraVeraSun BloomingburgVeraSun Central CityVeraSun Charles CityVeraSun Fort DodgeVeraSun LindenVeraSun MarionVeraSun OrdVeraSun nTNCorn60N/ATrentonNECorn / Milo40Mar-04RussellKSMilo / n52Apr-05UticaWICorn52Apr-03Albert rn120Dec-03BloomingburgOHcorn100Mar-08Central CityNECorn96Apr-04Charles CityIAcorn110Apr-07Fort orn110Feb-08OrdNECorn45May-07Lake OdessaMIcorn50Sep-06Verenium Biofuels LouisianaWestern New York Energy LLCWestern Plains Energy byNYcorn50Jan-08OakleyKSCorn / Milo45Western Wisconsin Energy LLCWhite Energy Hereford LLCWyoming Ethanol LLCYuma Ethanol LLCBoycevilleWICorn45Jan-04late rn12N/AYumaCOcorn50Oct-07Total Capacity:9512Total Plants: 164* Capacity noted in MMgy.# Plant under expansion.Last Modifiedon May 6,2008Source: Ethanol Producer Magazine(online). (accessed 5/15/08)Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
To:Feasibility Team, EthicalDecisions ConsultantsFrom: Scott Richardson, President, Midwest Agri-ProductsRe:Ethanol productionBased on recent articles in the news, ethanol production and its use as an alternative fuelseem to be surrounded by multiple issues, sometimes controversial. Based on thetradeoffs, we don’t know if we should get involved and whether this would ultimatelybenefit our company. The federal government has greatly supported the ethanol industry.We know there is not one source, or raw material, for producing ethanol. However, eachbrings with it different issues, challenges, and current levels of feasibility. One suchissue is the impact on water. In keeping with our expertise, we are interested in pursuingethanol made from either food-based products or cellulosic agricultural biomass. We areinterested in pursuing one or more of the following 5 areas: Massachusetts, Texas,Colorado, Louisiana, and Iowa for this ethanol venture.In a written memo, describe a procedure for determining whether we should get involvedin the ethanol industry at this time and the best strategy for doing so (i.e. raw materialsource(s)). This would be in contrast to dedicating our pursuits to our traditionalindustry, i.e. grain production, in the midst of soaring crop prices. In addition, pleasealso compare the 5 areas for possible development of an ethanol facility. Since we willreuse your procedure as our company grows, we will need this comparison procedureeven if we decide not to get involved in ethanol at this time. This comprehensive,proactive approach will enable us to act quickly when and if we decide to proceed withethanol. Thus, your procedure must be robust enough to answer this question for newareas at a later time. Attached is some data we uncovered that can be used to beginsorting out the issues.Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
Midwest Agri-ProductsA U.S. Producer since 1957To:Feasibility Team, EthicalDecisions ConsultantsFrom: Scott Richardson, President, Midwest Agri-ProductsRe:Ethanol distribution centersThank you for your research and procedure that have greatly supported our efforts ininvestigating the ethanol industry. Your work has heightened our awareness of the issueswe need to be most cognizant of. Because of your groundwork, I feel we are in a positionto move forward with establishing an ethanol production facility in Ames, Iowa. Basedon our holdings, we anticipate being able to capture 1.5% of the market share nationally.We need your help with the next step of the process. Midwest Agri-Products will needone or more distribution points or centers for its ethanol, which we plan to marketnationally. The big question is: should we pursue a centralized or a de-centralizeddistribution scheme? If centralized, what location is best? We have narrowed down thelist of potential distribution center locations to the following four regions, based on amarket analysis: Atlanta, Cheyenne, Erie, and Flagstaff. Also, based on this marketanalysis, we will need to achieve a service level of 90% to satisfy potential customers.We need for your team to develop a documented procedure that compares a centralizedversus decentralized distribution scheme and makes a recommendation for how weshould best proceed. In addition, I need your team to make me aware of logistical,ethical, cost, or other issues related to transporting ethanol that we will likely encounterin this venture. Does your recommendation change if the price of diesel fuel were toincrease? Please account for this possibility as part of your procedure. I anticipatereusing your procedure to evaluate our options on an ongoing basis. Therefore, it shouldbe robust and general enough to assess our distribution options in the future, possibly fornew locations.Attached (in an Excel spreadsheet) are data related to the national demand for ethanol in2006 and 2007. Also attached is a listing of the distribution center that will serve eachstate, along with the demand for ethanol by the state. Our accountants have estimated thecost to hold inventory at each DC at .50 per gallon per year. Included at the bottom ofthis memo are the costs associated with shipping ethanol to and from the distributioncenters by tank truck for both the de-centralized and centralized schemes. For thecentralized scheme, the costs provided are those associated with shipping a gallon ofethanol from the DC to customers in the other regions, if this DC were to become thecentral DC. Our supply chain analysts have estimated that it will take about 2 weeks fora shipment order placed by any of the DC’s to be sent between the production facility andthe DC. In addition, it will cost 5,550 to process an order placed by a DC.Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
Table 1: Transportation Costs per Gallon of ethanol (De-centralized).Distribution CenterAtlantaCheyenneErieFlagstaffInbound 0.34 0.26 0.31 0.48Outbound 0.75 0.75 0.75 0.75Table 2: Transportation Costs per gallon of ethanol in Centralized affAtlanta 0.75 0.89 0.82 0.92Cheyenne 0.89 0.75 0.89 0.81Erie 0.82 0.89 0.75 0.94Flagstaff 0.92 0.81 0.94 0.75Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
oConnecticutDelawareDist. of vadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode Island 5/South CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashington% of U.S. neCopyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
West yenneTotalSum100.001Copyright 2008 University of Pittsburgh, Swanson School of EngineeringNSF DUE-0717801 – CCLI-Phase 3 Comprehensive: Collaborative Research: ImprovingEngineering Students’ Learning Strategies Through Models and Modeling.
Phoenix Bio Industries Goshen CA corn 25 Sep-05 Pinal Energy LLC Maricopa AZ Corn 55 N/A Pine Lake Corn Processors LP Steamboat Rock IA Corn 20 Mar-05 Poet Biorefining-Alexandria Alexandria IN corn 65 N/A Poet Biorefining-Ashton Ashton IA Corn 55 Mar-04 Poet Biorefining-Big Stone Big Stone City SD Corn 75 2002
