ACE President Bob Scott: ‘Relationships still count

Ethanol marketer launched his ethanol career 13 years ago in North Dakota
By Tom Bryan | August 01, 2002
At work in Sioux Falls, S.D., Bob Scott is a marketer of ethanol. In simple terms, that means he sells ethanol to the folks who make our nation's gasoline. It also means he sees the ethanol business through a unique lens.

Perhaps, more than anyone else in the business, ethanol marketers, like Bob, serve as conduits between the farmers who produce our clean, renewable product and the big oil companies that buy it. That means Bob has a lot friends on both sides of the fence. Actually, he chooses not to see the fence.

"I don't think about ethanol and oil in an 'us-against-them' attitude," he says. "They (the petroleum refiners) are not our enemies - they are our customers. I think sometimes more people need to realize that."

That is, of course, a necessarily bold and intelligent position for someone who is also a long-standing president of the American Coalition for Ethanol (ACE), a grass-roots organization that fights passionately for the expanded use of ethanol in America.

Working for Ethanol Products, LLC
Bob markets ethanol for Ethanol Products, LLC, an independent company based out of Wichita, Kan. associated with Sioux Falls-based Broin Companies. The company currently markets about 240 mmgy and will market 320-340 mmgy by the end of the year.

Like most other ethanol marketers, Bob serves a wide range of customers with diverse product needs, he said. These buyers range from small jobbers (usually "spot sales") to the largest refiners in the nation (typically longer-term contracts).

"I am involved with marketing on several different fronts," he said, "including maintaining relationships with customers that buy our product on a regular basis and those who buy less frequently - and in less volume.

"My job requires me to talk to customers every day. I learned years ago that selling is about service, and relationships still count. I think I've earned a reputation in this industry for service and I pride myself in making sure my customers' needs are met and their product is in place when they need it. When you work with a customer long enough, you develop a feel for their patterns. Eventually, you know what they need before they need it."

One daily challenge of Bob's job is staying on top of the game - and staying ahead of the market.

"Marketers are always looking for new business, new customers, and ways to expand our reach with ethanol. That means market research is a necessary part of my weekly activities."

The most rewarding part of Bob's job, he says, is being on the front edge of industry growth.

"I am one of the older marketers in the business and seeing the industry grow the way it has is just wonderful. It's easy to sell a product that you believe in, and I truly believe in ethanol. It's exiting to me."

13 years in the business
Of course, the ethanol marketing business wasn't so glamorous 10 or 12 years ago.

"Back in 1989, we were fighting tooth and nail to make in-roads. Now, to see how far we've come. . . that's something for everyone to be seriously proud of."

Bob joined the ethanol industry in the summer of 1989 as marketing director at Alchem, LLP, a small ethanol plant in Grafton, N.D. that he now serves through Ethanol Products.

It was an interesting job, because the position he held at Alchem is rare - if not obsolete - these days. Because of the consolidation of ethanol marketing in recent years, it's uncommon to find individual ethanol plants that have a full-time marketing director on staff.

"Back in the day, just about every ethanol plant had a marketing person who was single-handedly responsible for moving the facility's products out the door," Bob said. "Of course things are much different today. It's much easier now for producers, for marketers, and for our buyers. In my opinion, we need even more consolidation in the marketing business. I hear it all the time (from buyers of ethanol). They want to take care of more of their needs in one phone call."

Bob worked at Alchem for nearly nine years, during which time he was involved with important ethanol lobbying efforts in North Dakota. He accepted a marketing position with Ethanol Products in 1997 and moved back to his hometown of Sioux Falls.

Longtime ACE leader
Bob has been on the ACE board of directors since his early days at Alchem. He has served as the group's president since 1999.

ACE was formed in the early 1980s by the legendary Merle Anderson and others, but really solidified into a strong organization in the early to mid-1990s.

Three years ago, the group had just over 200 members. Today, ACE is nearly 400 members strong.

"ACE is about the growth of the ethanol industry," Bob said. "We get strength from a variety of different groups and it is our mission to unite these groups in our common goal."

Bob is up front and direct about the actual - and perceived - political differences between ACE and the Renewable Fuels Association, the national trade association of the U.S. fuel ethanol industry.

"It's true that we don't always agree, but that's healthy," Bob told EPM. "What's important is that we do not go out and disrupt what the other group is trying to accomplish. We have many common objectives."

He added, "There is great strength in numbers. Each of our organizations brings something different to the table. And the more we bring to the table, the more weight we have to accomplish our common goals. We can work together, and we do, much of the time."

Bob said his work with ACE doesn't take up much of his time because the group has a talented and dedicated support staff in Sioux Falls, led by longtime ACE Executive Director Trevor Guthmiller.

"I have weekly contact with the staff," Bob says. "But they're able to drive the organization independently. If you have really good people, like we do, you just have to let them work. Trevor doesn't need a whole lot direction, and we (the 25 board members) are always there if they need us.

How long will Bob serve as president of ACE?"As long as they want me to do it - and as long as I'm able to do it, he said. "I enjoy my leadership role with ACE and as long as we are growing, and the organization is effectively serving its purpose, I will be proud to help lead this group. If ever ACE needs a change of direction, I would certainly step aside."

His vision for the industry
"We are experiencing some pretty serious growth and what makes it so special is that we were sitting on the edge of this growth for so long and it finally happened, Bob said. "Today ethanol is widely accepted by buyers, and also the general public. I only see more expansion, more production, and more demand in the years to come."

As for the renewable fuels standard (RFS), Bob told EPM, "It's a great thing for the industry" but he hopes a five billion gallon market becomes a floor, not a ceiling.

"Our product has value beyond what it gets from legislation alone," he said. "ACE supports an RFS, but it is not the only thing that our industry needs. However, ethanol was born in politics and it will probably remain there for a long time. So my hope is that (Congress) will say 'we believe in a sound energy policy and a renewable fuels standard should be a part of it.'"

On corn and cellulose
"The farmer coop is only one part of what ACE is about. Corn is not going to be the only feedstock in ethanol," Bob said. "Cellulose-to-ethanol will happen whether ACE supports it or not. Of course, we do, but the bottom line is ACE supports what is best for the growth of our industry."

Where will ethanol be in 10 years?"Well, a few years ago we said the 5 billion gallon RFS would triple the ethanol industry's production capacity. Now, we're saying the same legislation would double our production capacity because we've grown that much already. So I think we'll reach 5 billion gallons much sooner than 2012, and I think we'll surpass that by far."