Greentech Lead America: Renewable Energy Group (REG), a North American biodiesel producer, has selected Eka Software to help manage its risk, positions and U.S. renewable fuel standard (RFS2) activity.
Renewable Energy Group is focused on converting natural fats, oils and greases into advanced biofuel. The company has more than 225 million gallons of owned/operated annual production capacity at biorefineries across the country.
REG is implementing Eka’s end-to-end commodity and risk management solution for energy and renewable markets. It will cover the entire supply chain of the biodiesel business, from procurement of raw material, storage, price risk management, mark-to-market and P&L calculations, to sales of the finished product.
The biodiesel producer turned to Eka Software to integrate all their commercial operations, which required a modern physical CTRM system to get a holistic picture of their business and manage their renewable identification number (RIN) activity.
“Eka’s solution was ideally suited to meet the requirements of our trading, operations and risk management needs in the renewable energy space. We were further convinced by Eka’s strong track record of successful implementations for large customers across the globe,” said Patrick Hammen, CIO of REG.
Eka will also help REG to effectively manage risks, while bringing operational efficiency to day-to-day operations by automating key business processes and providing visibility of positions and exposures.
In an interview with Biodiesel Magazine, Dave Elsenbast, vice president of supply chain management for Renewable Energy Group, said the ethanol industry is going to be fully penetrated through ethanol plants in another year or two. Another thing that will gather attention in the next year or two will be improvements in separation technology, for example, separating corn oil from DDGS.
Ethanol industry production could be down a little this year, but REG thinks overall corn oil production will be up.
REG’s revenues for the fourth quarter were $232 million, a decline of 13 percent compared to revenues of $267 million for the same period in 2011. Revenues for the full year 2012 were $1.02 billion, an increase of 23 percent compared to $824 million for the full year 2011.
Full year 2012 adjusted EBITDA was $96.5 million, a decrease of 10 percent compared to $107.3 million for the full year 2011.