Industry to face margin compression in 2013, adviser says

01/20/2013 |

The ethanol industry will continue to experience narrowing margins this year, while producers that have made improvements in their operational and financial performance in the past three years will be better positioned, said Scott McDermott, a financial adviser at Ascendant Partners. The margin compression being seen by the industry is not as serious as the downturns in 1995 and 2008, but it is lengthier, McDermott said. "We do anticipate there will be more idled plants, and there will be some distressed sales of companies and some bankruptcies this year," McDermott noted.

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