Highwater Ethanol CEO speaks to Kiwanis

WESTBROOK, Minnesota (STPNS) -- westbrook — CEO Brian Kletscher of the Highwater Ethanol plant near Lamberton, spoke at the Westbrook Kiwanis meeting Thursday noon. He gave an over view of the Ethanol operation at the plant. He started by telling the group statistics about the plant.

Some 55 million gallons of ethanol are shipped out of the plant each year. About 80 tank cars are shipped every 12 days. Most of the ethanol is shipped by rail to the east coast. About 19 million tons of distillers grain and other products. It has done a lot in the rural areas.

The plant operates with 40 full time employees in 12 hour shifts 24-7. The payroll is about two million a year. Most goes to employees that live in the local area.

Klestcher said, “our profit margins have allowed us to pay down about 11 million in two and half years. Also we expect to retire most of the long term debt within the next five years.”

When asked about returning money to investors, Kletscher said, “we hope to return a small amount either this year or next year.”

Only a small amount of distillers product is shipped over seas, most of what was shipped went to China. The majority of the product stays in our local area, and farmers can pick it up at the plant. “Our dry product is shipped mostly through CHS,” he said.

One of the big problems for the industry is educating the public about ethanol and its by products. “We are trying to get it into our schools to teach students about it,” said Kletscher. “We are starting to do more to tell the story to the public, and respond to negative information about the industry.”

Ethanol makes up about 85 percent of Highwater sales, the remaining 15 percent is in other products.

The plant is capable of producing up to 62 million gallons without any upgrades in the plant. Currently they are applying to increase the output to 59.5 million gallons.

Kletscher noted that federal subsidies are due to expire this year. One of the misconceptions about the federal subsidy is it is given to the blenders, which is mainly big oil companies. He was not sure what will happen when those subsidies end. One thing for sure he thought they will want to make up for the lost revenue. He speculates they may lower the octane and add more ethanol to the product.

He feels the loss of subsidies will not have a great effect on the rural area.

Renewable fuels of any kind are subject to state and federal legislation. With the weak economy Kletscher thinks things like cellulistic fuels are still years away, as investors are not ready to plunk down big money on new unproven technology.