Verbio intends to save ca. 5M per year on costs and repurchase its stock. These are good moves under the circumstances. Verbio has to keep its top people at a time when profits are being squeezed. By buying the stock at absurdly low prices and then including this stock in its compensation packages for its top people, Verbio creates a solution out of a bad situation. The ethanol pie is growing, but Verbio’s share is declining in relation to the sugar based producers. This would just about even out. (E10 now has 16% of the gasoline market and growing.) Winter biodiesel is stable, and it appears that the EU will crack down on illegal, falsified used cooking oil that causes havoc in the summertime. Even if this is stopped, palm oil is being accepted by the EU, so summer biodiesel will still be under pressure. Herr Sauter said that he is committed to raps based biodiesel mainly to preserve the quality of the byproduct glycerin, which is selling well. There may be a solution here by juggling production to meet the company’s needs. On the biogas side, the production quantities are relatively small, and investment in this area has been stopped – in spite of the strong demand for the product. It was unclear to me why a project in Zörbig was not completed. The reasons given had more to do with the problems in the biodiesel area – that is, unclear regulation. Other reasons may be financial or technical. Verbio has developed a unique process to make biogas from waste. And this process is perhaps the future of the company. It may be also that the delay has to do with some reengineering to a better design that could be licensed on a grand scale. This would explain the secrecy surrounding the issue. All in all Verbio remains a suspenseful story.
|