RISK MANAGEMENT

Global Ethanol performs a variety of management and business services with the management team that resides in Global Ethanol.

Corn Procurement:
Global Ethanol procures it’s own corn at each of its sites in Lakota, IA and Riga, MI. In procuring the nearly 55 million bushels of corn per annum, Global Ethanol works with local grain procurement companies to assist it with the local physical grain origination. At Lakota, MaxYield Cooperative sets daily bids for corn at the direction of Global Ethanol and assists in all aspects of the physical origination process. At Riga, Michigan Agricultural Commodities performs a similar function for the plant located there.

Ethanol and DDGS Sales:
Global Ethanol is responsible for the marketing of 100% of its ethanol production and for setting the prices for its product. In addition to directly marketing its products, Global Ethanol sells a portion of its production through Murex, N.A. who provides a procurement function for a number of its oil company customers around the nation. In performing this role, Global Ethanol prices the product, negotiates contracts, arranges transportation and insures timely delivery of its 160 million gallons of ethanol annually.

Risk Management and Marketing Services:
One of the unique characteristics of Global Ethanol is the internalization of the sales and risk management functions. Every day, Global Ethanol staff looks for opportunities to enhance its margins through the combined efforts of direct physical sales of its products and the physical purchases of the raw commodities for processing. In addition, Global also utilizes the financial markets when physical sales are not available to hedge its prices and protect its forward margin structure. We at Global Ethanol believe that this is a fundamental core competency of the organization and a key value driver for the Company.

Corn Oil and Bio-Diesel Sales and Management Services:
Global Ethanol recently entered into a joint venture with Greenshift Corporation whereby Global will provide a variety of services to the joint venture company, Global Greenshift Bio-Diesel LLC.  Among the services that Global will provide are the management of the Bio-Diesel plant operations and the Marketing of the products. In performing these functions, Global will utilize its already seasoned professionals for both of these activities and will draw on its vast experiences with the management and marketing functions of its ethanol business.