CHS Buys Out Country Energy Partner


CHS Cooperatives has reached a deal to buy Farmland Industries’ 40 percent share in their three-year-old joint venture, Country Energy.
The purchase willonce again make CHSsole owner of the Cenex brand, Country Energy’s line of agricultural petroleum products, which CHSbrought to the alliance. But the businesswill be larger than it was in 1998, as CHS will also acquire Farmland facilities, including lubricant and grease plants.
Bob Honse, president and chief executive officer of Kansas City, Missouri-based Farmland, announced that the organization decided to sell its 40 percent share to CHS because it made sense for Farmland to exit the petroleum marketing business as we evaluate our long-term options in petroleum refining.

St. Paul, Minnesota-based CHS, on the other hand, continues to see petroleum as an important part of its business.

Energy products have always been a core business of CHS, spokeswoman Lani Jordan said, noting that CHS owns one refinery and 75 percent of a second. Cenex has been around since 1931 and, obviously, its continuing to grow.

The buyout, scheduled to be completed this year, will give CHS possession of Farmlands Amarillo, Texas, lube blending plant and its grease plant in Kansas City, Mo. Farmland will retain ownership of its other major petroleum facility – a Coffeyville, Kan., fuels refinery – although CHS will distribute all of its products. A Farmland spokesman said the organization may try to sell the Coffeyville facility separately. Country Energys 375 employees will become employees of CHS. Terms of the deal were not disclosed.

Cenex brand products include gasoline, diesel and other refined fuels; propane, lubricants, alternative fuels, petroleum equipment, credit cards, convenience store merchandise, and value-added services. CHS and Farmland Industries are among the largest farming cooperatives in North America, serving member farmers as suppliers of items such as feed and fertilizer, and as purchasers, marketers and value-added processors of farm products.

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