Sterling Ethanol was founded in 2004 by former Dekalb/Monsanto Employee, Dave Kramer, after he took notice of huge demand for wet distillers grain animal feed in eastern Colorado and Nebraska.  Considering that wet distillers grain is a byproduct of corn ethanol production, Kramer decided to seek investors in the local agricultural community surrounding Sterling, Colorado, including mainly livestock feeders and corn farmers.  Since the initial plant began production in 2005, the company has opened two additional subsidiary facilities in Bridgeport, Nebraska and Yuma, Colorado.  Sterling also established Colorado Agri Products, a marketing division for the three plants to handle procurement of corn and marketing of wet distillers grain.  In just seven short years, the company has grown to a $700 million enterprise employing a staff of 100 between its combined divisions.

Competitive Advantage

“We operate more like a feed mill than an ethanol plant,” says Sterling founder, board member, president and general manager Dave Kramer, “because without the ethanol plants in eastern Colorado and western Nebraska the cattle feeders couldn’t be competitive in the market.  We do not dry any of our feed product, so we can produce ethanol for about half the natural gas costs of other plants because most other ethanol plants have to dry it to ship.  We ship everything within a 50-mile radius by truck.”

Sterling and its other plants average roughly three gallons of ethanol per bushel of corn, and each plant pumps out roughly 52 million gallons of ethanol per year.  It also turns over about 400,000 tons of wet distillers grain per year, while consuming approximately 18 million bushels of corn.  The gross revenues between the two products are about even, with $7.5 million per week generated from sales of wet distiller’s grain and $9 million per week from ethanol sales.

Energy Efficiency

With the help of ICM Inc., a leader in ethanol plant design and engineering, Sterling was able to develop some of the most energy efficient ethanol plants in the country.  One of the key decisions from the outset of development was to use the steam pressure released from the evaporators to generate electricity.  “There are approximately 190 ethanol plants across the U.S., and there are only about five or six that have cogeneration,” says Kramer.  “We take that 120 PSI of pressure wasted off our evaporators to a low pressure turbine to generate 1.2 MW of electricity. It saves us about $60,000 per month on our electricity bill.  We produce 40 percent of our own electricity, and since we do not dry our feed, we also save on natural gas, making us one of the lowest carbon footprint ethanol producers in the country.”

Technology

Along with having some of the most energy efficient ethanol plants in the country, Sterling has automated its facilities to further boost efficiency.  The company partnered with Pavilian Technologies, a division of Rockwell Automation Inc., to install Advanced Process Controls (APC) systems in all of its plants.  The systems have made the plants ten times more efficient in natural gas, water usage and emissions, and the flagship Sterling facility was the first in the country to implement plant-wide APC technology.

Kramer describes the system: “Our wet distillers grain load out is all automated, the drivers just pull up to the scale, call in their load number, load to their weight, and it automatically shuts off when full.  The system even bills automatically the feedlot it’s going to.  It’s the same with our ethanol load out.”

Employees

Sterling Ethanol has a unique training capability that has organically grown along with the company, and it’s based on hiring from within.  “I’m a firm believer in promoting from within our organization,” exclaims Kramer.  “For example, one of our guys started out as a groundskeeper.  He then went into grains, then to a cook position, then into the lab, and now he’s one of my lead operators.  Our new OSHA safety compliance officer started out as one of our lab techs.  Once we run our first plant, we took people there and moved them into management at our second plant.  We then took people at the second plant and moved them into management at our third plant.  We essentially have a training ground for our employees.”

Employees enjoy the added benefit of quarterly bonus opportunities based on performance in four areas: safety, housekeeping, production goals, and profitability. 

Final Thoughts from the President

When asked about the “food versus fuel” argument that has plagued corn ethanol producers in recent years, Sterling’s Dave Kramer shed light on the situation. “This whole food for fuel argument is the most bogus thing in the world!” he claims.  “Ethanol plants use only the starch in corn, which the livestock feed industry doesn’t even want.  We take #2 Yellow Corn, which is 12 percent protein and four percent fat, and turn it into a product that’s three times more nutritious for the livestock.  It becomes about 33 percent protein and 12 percent fat after the distilling process.  Using our wet distillers grain also reduces the cost of gain anywhere from 5 to 10 cents per pound of beef ”

Now there’s some food for thought!