Cover sustainability here at ROTH. One of my favorite names is Darling Ingredients. I'm really happy to have Randy Stuewe with us. Many of you will know my thesis on Darling is really simple. It's buy Darling for the feedstock war. We've got 15 renewable diesel plants that are coming online. They're all gonna need feedstock, and they want low CI stuff. Randy is an alchemist 'cause he's sitting on what he calls the green oil field. Randy, can you maybe just talk a little bit about the commissioning of some of these plants out there that's supposed to happen over the next couple quarters? You know, what's going on? How do you see this kind of playing with fast prices and demand sort of incrementally over the next couple quarters? No problem. Can you hear me? There we go. First off, thanks, Craig, for having me back again and having our team back. I mean, we love to share the Darling story. We want you to walk away today and realize that, you know, we have the downstream and we have the upstream product here, and we're set to win in the green hydrocarbon war, you know, and as Craig calls it, the feedstock war. I don't know that I What I'd tell you I see today is we built a model where about 15%-17% of the world's slaughtered animal byproducts goes through one of our 270 facilities in 22 countries on 5 continents. We transform these waste products that would be typically destined to a landfill, you can call it carbon avoidance, into fats and proteins. We've always found really cool uses, highest and best for the proteins, whether they're food proteins, feed proteins, pet food proteins, organic fertilizer proteins. Fats were always the challenge. What do you do with animal fat? You guys stopped eating it back in 1989 when the Saturated Fat Wars happened. It became kind of this little, you know, no one wanted it product. It was sprinkled on to animal feed around the world for caloric acceleration, for least cost formulation for animals. When we built out the hydrocarbon business, it'll be 10 years in July, our goal was to create a market and create a green hydrocarbon that was homogeneous, that could work within the distribution system in the world. Oh, by the way, it reduces tailpipe emissions by 85%. Really, you know, kinda cool if you build a product that the world needs, then, it's pretty easy to sell. We've now built out the 1.2 billion gallon system over three years, and we consume roughly 60-65% of North America's waste fats, of which Darling controls a large portion of that supply, along with our partner, Valero, in the ethanol business for distillers corn oil. Now we look at the world. You know, the first 5 years, from 2013 to 2018, the business made about $1.25 a gallon. The second four and a half, 5 years, about $2.25 a gallon driven by the decarbonization of the world. You know, in the sense of the world, the market has now moved to decarbonize, and you can't deny it. You know, whether or not you subscribe or you don't subscribe, I have an obligation to provide a chance of a green fuel to both heavy transportation and airline fuels. As I always say, honey attracts flies, right? These types of margins, you can put them back on the per barrel crack, but on that sense per gallon, it's pretty darn good business. Now we're watching some repurposed assets. We're seeing very few greenfield assets, if you will, come in and wanna play in the market. Ultimately, there's a finite amount of fat in the world today, and you got two types of fat. You got edible fat for human consumption and non-edible. We play in, I hate to call it waste, we play in the liquid gold non-edible portion, which is the one that has the lowest CI. In order to process the material, the secret sauce is, you'll hear the word, the buzzword, everybody says pretreatment. What's that mean? You gotta get out the impurities, the alkali metals, the nitrogen, all the little nasties that are called catalyst killers. At the end of the day, we've perfected that for the last 10 years, and that's what we do for a living. As you look at the world, Craig, what's gonna be interesting is we're gonna win under either scenario here. Either we'll make a fortune in the core ingredient business on the fat side, or we'll make it on both. I think we'll make it on both because we have a technology that works. There's you know, as the learnings that we've had over 10 years has been, not all fats are created equal. Everything's a little different. Everyone has a little bit different alkali metal and nitrogen, you know, component of it. They take a little different treatment. And then ultimately, as we've learned, the metallurgy in these facilities are very critical to reliability and uptime and safety. The world's gonna have to deal with that. I mean, we learned the hard way. We had a fire back in September of 2013, an explosion when we learned what happens in these reactions. To be honest with you, it's real simple. If there are any chemists in the room or non-chemists, animal fats or lipids or triglycerides, whatever you wanna refer to them as, contain chlorides. What happens when you hydrogenate a chloride? Hydrochloric acid, super strong. It will eat stainless steel. It will eat carbon steel in the right situation. Making sure that you have the right metallurgy is so critical in this. As we go forward here, we're gonna watch people learn. I mean, I'm not picking on anybody. I mean, I think that Tim Go of HF Sinclair Corporation said the other day, he said, "We've got a steep learning curve." They've been at it about a year and a half, nowhere near capacity, nowhere near buying what they thought they would in the business. We've seen Seaboard take a Topsoe plant up in Hugoton, Kansas, I'm not sure has ever really run. There's a lot of learning curves out here, and I would say it's really on both sides, whether it's big oil or whether it's the startups here. We'll see how it works out. Thank you for that. Thank you for that. DGD 3 is now up and running, right? I know these things also are, you know, there's a shakedown process. Can you maybe just update us on where we stand now and, you know, what happened over the last few months? Yeah. DGD 3 is a boilerplate 470 million gallon plant, 35,000 barrels a day, I think, roughly is that number conversion. The learnings here as I go back once again and tell you the learnings. Plant number 1 was 135 million gallons, and over the course, went to 160, went to 275. The logistics to support one of these plants are just mind-numbing, to be honest with you. I mean, the big oil, whatever you wanna call, likes to buy, you know, 50,000 barrels through a pipeline or bring a Panamax in from somewhere in the world, unload it, you know. A 185,000 pound rail car or 45,000 pound truck that came out of Omaha, Nebraska in December, that is, you know, it's, it's frozen, so it takes steam. The logistics to unload, when you start backing into the amount of fat that it has. You have to unload daily to maintain a 350 day annualized run rate, it becomes mind-boggling. DGD 1 and DGD 2 can run, you know, around 750 million gallons, maybe a little more, without a turnaround involved there. You think about that times almost 9 pounds a gallon, you got, what is that? Almost 7 billion pounds of fat and divide it by, you know, 350 days. That's a lot of cars. We had to partner and invest in a tank terminal 5 miles away that has that capability. Back to Craig's question on 3. Number 3 was married to Howard Energy Terminal in the OmniPort, a 1,100 acre site 1 mile away. Absolutely the most gorgeous place ever for unloading 100 cars at a time. We have to unload 75 cars a day to stay even. A hundred to get there. We have not been able to do that. When I say we, our partner. They made the promises. They have now reinvested in the facility. They've added bigger pumps. We got hit with the super cold weather, if everybody remembers at the end of December. Everything came in there as a brick. Long story short, we froze up the place. We froze up every car. We're there now. We're back up March 8th. We're at capacity now. We're proud of it. Really never a problem of a shakedown in the front end, if you will, or the back end, the hydrotreater. It was all logistics. The key learning for people is still, you can announce a plant on the West Coast of California, whether it's you know, Marathon or Phillips 66, show me the logistics. Then you've got to deal with the pretreatment if you wanna run this stuff. These plants, when they start creeping up at 200, 300 million gallons, you know, that's 2.7 billion-3 billion pounds of fat at 185,000 pounds a car. Oh, by the way, if you don't have your own cars, there's no way to get it there. There's this whole logistical supply chain that has to fall into place here for this to work. Thank you for that. Aviation fuels is a hot subject these days, right? You know, if I look backwards, you know, it's really the success of Darling with green diesel that allowed the Low Carbon Fuel Standard to work in California. I wouldn't be surprised if we see some similar dynamic over the next few years, right? 'Cause you guys know how to make fuel. Can you maybe just update us on where you are in, you know, participating in that market? You know, you've invested, you have capacity to serve some of the early demand. You know, what's your vision? Yeah. As we always say, what we've always been most proud of is our courage to be the first mover with our partner, Valero. I mean, you know, 10 years ago, well, 12 years ago, when we started construction with serial number 01, I still remind myself when I look in the mirror, that was a career bet, not only from the balance sheet, but from a technology side. We got it right. As we started looking at what's the next frontier, I'm gonna stop and rewind the movie here. Who do you have in the administration today? You've got the Biden administration that is what? They are pro-electrification, they're anti-food versus fuel, and they're pro in the sense of SAF. They clearly have said that we're gonna move away from heavy transportation fuels in favor of SAF. If you know, airline emissions are something that are really not well understood by the general public today. Craig's always telling me it's kind of that dirty little secret of only measuring emissions in the first 2,500 feet, then God blows the rest of it away. You, you don't have to measure it anymore. It's a, it's a really significant polluter. Where we're going is we're in second place. Neste, the Finnish oil company, public, beautiful company, they moved first in Singapore. We had to get number 3 online, which we've done, and now we're adding the fractionation module to make 250 million gallons. Between Neste and ourselves, we'll make 625 million gallons. Here's the trivia question. How many gallons have American cargo carriers and airlines pledged? They've pledged to buy 11 billion gallons. I mean, it's a bit absurd. I love it. I mean, it's only bullish for our business going forward. SAF, we had to get comfortable that it had some type of remuneration or subsidy that's in the Inflation Reduction Act. We wanted to get comfortable that it favored waste fats versus other feedstocks, which it does in the carbon intensity. It moved it to a true tax credit versus a blending credit. It's made in America, and it will be available to those that can actually make money at it. The question we have as we go forward is, we've got a great guy in the commercial side of the venture that comes from the aviation fuel side. You know, Valero is a huge aviation fuel, Jet A distributor and manufacturer. We've had visibility to this for a while. I always like to joke with people and say, in 2009, when embarked on the dream, and I was able to woo Valero into the venture here. Believe it or not, we were building a plant for the US Navy. They wanted fuel. They wanted non-international crude oil. Of course, we had to break it to the commander and the generals that this stuff was gonna cost a little more, about double. You know where that ended. We ended up being in the road transportation business. Now, you know, with all these pledges in SAF, someone's got to buy this stuff, and they're gonna pay what it takes to do it. It might be private aviation. It might be cargo. I suspect Amazon's, you know, more image-conscious than the commercial airlines. The United Airlines guys, you can see what they're doing out there. They've pledged to buy 1.5 billion gallons. Now let's put this in perspective. How many pounds of fat does it take to make 1.5 billion gallons? Almost the entire U.S. edible soybean crop. You know, you gotta step back and say, "Is that practical, realistic?" Probably not. At some point in time, aviation fuel will continue to grow with other crops that may support a cover crops. It can be other oil seeds in the world, but it's gonna be a while. At the end of the day, it's not a U.S. phenomenon. This is European-driven. There are mandates in Norway. I can't remember the exact gallons by 2025 or 2030. In the new LCFS scoping plan, there is an intrastate requirement. I think it totals 425 million gallons here in California. We are extremely bullish on what this can actually deliver to us. We've got the technology. We've got the plant. Long lead equipment's ordered. Hopefully, our target is to be online. You know, it's always waiting on the permits. The target to be online would be sometime in early 2025, and hopefully the team can do better. Excellent. I've pulled your leg, a number of times over the last several years about elephant hunting, right? Your M&A program. You've been after some big game lately and had some pretty nice prizes. Can you maybe just update people here on what you've accomplished these last 2 years? Are you still in the market? The history here is about every 5 years, we've been able to double the size of the company. The underlying thesis is very simple: population growth, wealth creation, center of the plate dining, and it involves some type of protein, and that's not plant-based. We just see the world as a trajectory and a runway that has unlimited potential. We figured out the right way to do business. Our margins would tell you we know how to do it. It's a capital-intensive business, not only domestically, but internationally. It's odor, wastewater. We've been able to look at different businesses around the world. In the last, I think if you think 2005, we doubled 2010, 2015. We missed 2020 because of COVID. In 2022, I think we've added another 42 plants, 4,000 employees. Today, if you wanna have fun with the numbers, one out of every six and a half animals goes, after the meat's gone, goes through one of our factories. Pretty good number. We still see China having a lot of opportunity, although I'm reluctant to kinda press investment in China at this time. I favor South America. We just bought 16 plants in South America and another 6 gelatin factories or 5 in South America, one in the U.S. that will close here in a couple weeks. It's been a big undertaking. The question is, can we do more? The answer is, we're gonna focus 2023 on execution and integration. I mean, people forget, as a public company, we, you know, we've gotta get the numbers right. 20 years now, I've never had a restatement. I don't plan to have one. We gotta get it right. It just takes time to put in human resource systems, IT systems, get books closed, get the organization structures. Brazil's now our second-largest asset base and earner in the world. So getting those structures in place. The answer is, short answer is yes, I'm always looking, Craig, if that's the answer you want. I love it. I love it. I guess we got time for one more question. A lot of investors out there think that your guidance for this year might have been just a little bit conservative. That, you know, the volatility in fats is understood, and the supply situation of renewable diesel sort of on a macro level, I think is somewhat understood. If you were being conservative, where would you see potential for things to go really well? You know, maybe you wanna unpack that for us a little bit as far as, you know, what the assumptions are. Is this really just being careful, given that you have so much integration going on? you know, are there headwinds we need to pay attention to in this crazy environment we're in? Well, I mean, ultimately, it comes down to, you know, our credibility, our belief, and then how you being the stakeholder base puts a multiple on the company. I mean, you know, if you take the last five years of $540 million, $816 million, $840 million, $1,235 million, $1,541 million, built in that $1,541 million last year was $1,001 million in the base business, $443 million in Diamond Green Diesel. Diamond Green Diesel made 750 million gallons, now it's going to make 1.2 billion. The model is built on the arbitrage. If fat prices go down, Diamond Green makes more. If fat prices go up, Diamond Green has a competitive advantage, what we call the moat around it, location, energy, technology over anybody in the world. We have what we believe is a safe haven there. We gave 1.2, which you would say, well, if you bought the U.S. assets and the Brazilian assets, and you're given guidance of earning about $200 million on those, you should have been 1.3. We got some energy headwinds in Europe. They've come off quite a bit. We came into the year at EUR 250 per megawatt hour, and we're down to EUR 50 a megawatt hour now. We're gonna get that back. It's a lag, Q2. At the end of the day, we're 1.2. We're saying $600 million. We'll see the Gelnex acquisition that closes here on or about March 31 should give us somewhere between another $75 million and $100 million. What I want to say is, I feel really comfortable with the 1.8 guidance. I'm gonna hedge myself a little bit on which side of the fence it lands on, but that's the power of the model. I love it. With that, I would say thank you, Randy. Really appreciate you joining us. Thanks, everyone. Yeah.