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Around 30 team members will become employees of White River, ensuring a smooth transition for customers.
And Benson Hill said it will honor contracts up to 2024 with its farmer partners who deliver grain to Seymour. The parties also expect to finalize a grain supply and licensing agreement to continue processing Benson Hill’s proprietary soybeans through the facility.
The non-GM soy producer said it is exploring options to divest its remaining manufacturing assets as it transitions to its new asset-light business model focused on expansion into animal feed markets, complementing its food ingredient business.
The divestitures are expected to significantly lower working capital requirements and will help extend liquidity, it reported.
UHP-LO soybeans
March 2020 saw Benson Hill first unveil its plans to release Ultra-High Protein (UHP) soybean varieties during the 2021 crop year. The company looks to lower the environmental impact of feed ingredients through focusing on the genetics, by developing soy crop varieties with a high protein content. Its approach is to increase protein expression in the soybean plant itself, so that the need for additional processing is reduced.
Its non-GMO, ultra-high-protein, and low-oligosaccharide (UHP-LO) soy ingredient has post-crush protein levels of around 60-65%. The removal of multiple processing steps creates a reduction of carbon emissions and water use, enabling feed formulators to deliver on carbon reduction commitments, Anthony Kingsley, senior director of sustainability, ESG and stakeholder engagement at Benson Hill, told us in June.
Licensing model
On a call with investors today, the company said that its closed-loop model catalyzed demand for innovation but is no longer sustainable. It is moving to licensing model, which it believes ensures capital efficiency.
Deanie Elsner, CEO of Benson Hill, said that moving to an asset-light business model, and introducing its innovations into attractive broader end markets is the most feasible path forward for the company.
“Through the actions we have taken and are continuing to implement, we are poised to deliver significant value as a leader in AI-driven proprietary seed innovation.
“We are already making progress on our strategic path. With the expected divestiture of our processing facilities, we plan to retire high-cost debt and extend our liquidity by more than 12 months. In addition, we are engaged in discussions with potential partners to scale our current proprietary portfolio and product pipeline for large-acre US animal feed and pet food markets.”
The poultry and pig feed opportunity
Accelerated expansion into poultry, pig feed and pet food presents significant opportunity for value creation, said the US firm, which has already established supply deals with Riverence, the largest land-based producer of steelhead and rainbow trout in the Americas, and with BioMar, helping both to reduce emissions through the integration of its ‘low impact’ soy ingredients into their value chains.
The company added that it recently completed an external analysis of several of its UHP-LO commercial soybean varieties validating novel value-added attributes for poultry diets, swine rations, and pet food, with the research confirming its beans higher protein levels that will allow lower feed costs, their ability to produce meal with fewer anti-nutritional factors (ANF), and their enhanced amino acid profile, which reduces the need to add high-cost synthetic amino acids to feed.
Benson Hill expects to expand its UHP-LO soybean portfolio with herbicide-tolerant and second-generation seed varieties in the next two to three years, helping to extend its competitive advantage and diversify its market reach for different geographies and end markets, including large US feed markets representing a total addressable market of approximately 28 million acres.
It is conducting additional studies as the 2023 crop comes out of the field and is working with outside parties to perform feeding trials in more species.
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