Management and Optimization Services

DeBruce Risk Services is staffed and structured to provide comprehensive services necessary to help manage and optimize all aspects of a production asset. It is anticipated that DeBruce Risk Services relationship with owners will begin with evaluation services for pro forma purposes, and then extend to on-going risk management and optimization services under contractual arrangements.

DeBruce Risk Services

DeBruce Risk Services was formed to provide risk management services to financial owners of ethanol production assets. These services help enable owners to make informed investment and optimization decisions, and to enhance extraction of the maximum value from their Assets within their desired risk parameters and investment timetable.

This combination enables DeBruce Risk Services to be a preferred and stable partner
for owners and provides an exceptional opportunity for its investors.

Market Overview

The energy market, and in particular the ethanol market, is characterized by
numerous challenges. Established companies are struggling to maintain
liquidity, some existing ethanol plants have been shut down or sold at distressed values, new equity investors are exploring entry into the sector and the regulatory framework
underpinning the industry is being re-written. In times of great turmoil,
opportunities emerge as does risk.

Overall Risk Management

It is not enough to worry about corn prices or ethanol prices or DDG prices. One must look at the interrelationship of all these factors. A high ethanol price only works if one is not buying corn at an equally high price. Sophisticated accounting and analysis tools are required to manage this risk. Knowledge of all the risk management tools such as futures markets, options, forward contracts, OTC markets, etc. is necessary to do the best risk management in complex and volatile markets.

Banking and Credit

With continued bank consolidation and regulatory pressure, banks can and do change their appetite for ag related financing, both inventory/receivables and fixed assets. When selling ethanol and DDG, credit terms can be additional sources of payment risk. When utilizing risk management tools such as OTC products, there can be considerable counter party exposure.

Emergence of Plant Owners with Limited Risk management Experience

For the financial owners poised to invest huge dollar amounts, the complexity of managing risk for production assets can be daunting. DeBruce Risk Services was formed to provide services to owners of ethanol production assets. These services, including analysis and risk management, enable owners to make informed investment and optimization decisions, and to enhance the ability to extract the maximum value from their assets within their desired risk parameters and investment timetable.