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Home » BioChemicals/Renewable Chemicals, BioRefineries, Business News/Analysis, Funding/Financing/Investing, Iowa, Louisiana, Opinions

Shocker in Ames: CEO Change at REG, World’s Biggest Biomass Based Diesel Producer

Submitted by on July 7, 2017 – 4:23 pmNo Comment

by Jim Lane (Biofuels Digest)  In Iowa, Renewable Energy Group announced that Dan Oh has resigned as President and Chief Executive Officer and as a member of the Company’s Board of Directors.  The resignation was effective July 3, 2017. The Board of Directors appointed long-time director Randolph (Randy) L. Howard as Interim President and Chief Executive Officer.

Howard is a 33-year veteran of Unocal, has been on the REG board since 2007 — so, a familiar face — at 67, may not be in the job for the long-haul, but a strong interim pick.

Oh departs as the company’s stock hit a 3-year high of $13.39 in Monday trading, and has surged 46.2% in the past 12 months, topping the notable surge in biofuels equities which has seen the Zack’s biofuels sector average jump 30.6% year-on-year.

REG stock traded down a whopping 5.74% on the news, closing at $12.40.

Staying the course

“The strategy is in place and there’s no change,” CEO Randy Howard told The Digest.  “That is our #1 message. We placed markers on the table and we intend to execute, and today we are seeing part of that execution as we bring in leaders who can take us to that next level.”

Projects there are, but also the ongoing project known as public policy. The EPA proposed a 2019 “no growth” RVO. But Howard was not dismayed.

“We see in the next several months,” Howard predicted “public policy coming together to give the biodiesel a secure future for an extended time. Not this year to year of tax credits, RVOs and import penalties. All of it we think is coming together, so that we will have a public policy in place that permits the industry to manufacture to its capacity.”

Oh said that the company would be “expanding, adding geographies, products and markets and capturing more downstream margin, citing the development of speciality products. Though Argentine imports have surged into the US in response to favorable prices for advanced biofuels, Oh predicted that “trade sanction activity is underway, and it looks like going to happen.” He saw the import and export trade “moving back to balance”. And he said that a reinstatement of the $1.01 per gallon biomass-based diesel tax incentive “seems likely”.

Oh pointed to the “growing global distillate market,” and said that, in contrast to the travails of ethanol producers, “we don’t have tension with petroleum,” because of the global call for more heavy-duty, distillate fuel. The world needs more of what we do.” Oh noted at the time that just a 3 percent increase in global demand would increase the market for diesel by 12 billion gallons, and noted that LMC and EIA projections saw the distillate market growing from 480 billion gallons per year to more than 700 billion by 2030.

REG acquired its first production capacity in Eastern Europe, Petrotec, not long ago, and strategically there’s a strong rationale, with a advanced biofuels target under the proposed Renewable Energy Directive set in the 1.5-9% range, or an overall 6.5 billion gallons market. “ REG noted that the “RED II proposal aims to expand success by growing and emphasizing the lowest carbon advanced biofuels.”

Let’s salute Dan Oh and the company he built — the people and the systems that remain will be his substantial and substantive legacy.  READ MORE

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