Alto announces plans to further diversify operations
Summary
Alto Ingredients Inc. on Nov. 7 released third quarter financial results and announced it has entered into a $125 million senior secured term loan facility that will support efforts to complete strategic upgrades, including those related to corn oil, protein and yeast production, renewable natural gas (RNG) and carbon capture and storage (CCS) opportunities Alto Ingredients CEO Mike Kandris discussed the loan during the company’s third quarter earnings call, noting it will help accelerate Alto’s diversification growth strategies, contribute significantly to the company’s top and bottom lines, and further insulate it from commodity and margin swings. He said the financing circumvents the need to rely solely on organic cash flow, facilitating the timely completion of capital projects that are lager in magnitude, scope and cost benefit to all stakeholders by building a more stable business. According to Kandris, Alto plans to add new natural gas and RNG pipelines to connect directly to nearby major hubs. Citing the company’s 24 years as a reliable supplier to the pet food industry, Kandris also announced plans to expand its operations into the commercial production of yeast through an aerobic fermentation process at its wet mill. Regarding third quarter operations, Kandris called the three-month period “challenging” and said Alto’s results were negatively impacted by low margins, high corn prices, logistical constraints and the maintenance shutdown of its ICP facility.