Premium Peanut Announces Plans to Expand with Peanut Oil Facility
Friday, July 14th, 2017
Premium Peanut, a peanut co-operative based in Douglas, Ga., has announced plans to build a state-of-the-art peanut oil facility and significantly expand its current shelling operations. These expansions further enhance Georgia peanut growers’ control of their supply chain and provide an opportunity to increase sales of their crop for use in producing peanut oil. This significant expansion has been made possible through $90 million in flexible financing arranged by SunTrust Bank, which will also provide working capital and funding for potential future expansions.
Premium Peanut was founded in 2014 to help provide a stable and accessible market for peanut growers in South Georgia who often face a market with inconsistent demand compounded by commodity price volatility. In 2015, through the opening of Premium Peanut’s $50 million peanut shelling facility, local peanut growers were able to regain control of their supply chain and ease the burden of a previously unstable environment. The shelling operation, now the largest in the world, has had a significant impact on the city of Douglas and surrounding Georgia counties, recapturing nearly $40 million dollars for the local economy.
While Georgia is among the top five suppliers of peanuts in the world, the U.S. still imports an estimated 24 percent of its domestic peanut oil usage, which continues to grow along with the U.S. trade deficit for peanut oil.
“As we evaluated the current landscape of the Southeast U.S. peanut production, we realized it made sense to expand into peanut oil, as it differentiates our company and enables deeper penetration into both domestic and international markets,” said Karl Zimmer, President and CEO of Premium Peanut. “We’re excited to provide additional opportunities for our farmers and growers to sell more products.”
Along with the oil expansion, to be completed in March of 2018, Premium Peanut plans to purchase an additional 80,000 tons of farmer stock, valued at more than $30 million dollars in payments annually to local farmers, truckers and buying points. The company will also add 80 additional employees to its growing roster of nearly 135.
SunTrust Bank’s Food and Agribusiness Industry Specialty Team assisted Premium Peanut in the initial financing arrangement for the shelling plant, helping to provide $22.5 million in new market tax credits.
“We are thrilled to be able to continue our relationship with Premium Peanut, enabling the construction of its groundbreaking oil facility in a region that will continue to dominate the U.S. peanut supply,” said Todd Southerland, Food and Agribusiness Industry Manager at SunTrust Banks. “With this latest expansion, Premium Peanut is positioned for continued growth, and we look forward to supporting the company and its members each step of the way.”