Biofuels Company Presses Ahead

Southern States Power Co. Inc., a member of the National Biodiesel Board, has signed a Letter of Intent to invest in a biodiesel production partnership with a Southern California feedstock supplier, which plans to produce up to 3 million gallons of EPA-registered OxEG Biodiesel fuel per year for the on-road market.

Riverside, California – December 13, 2002 [] Southern States intends to invest in and develop a number of similar production facilities, each capable of generating between US$750,000 and US$1 million per year of cash flow, based on a projected fuel sale price well below current market levels. The biodiesel production partnership, which will do business as the Inland Empire BioEnergy, L.L.C., has initiated the site development necessary to prepare the location and begin production of saleable fuel within a matter of months. Southern States is currently in negotiation to invest in a company that will have the exclusive manufacturing, sales and marketing rights to mobile, modular biodiesel production technology, which will be installed on the site of a grease recovery, recycle and reuse business and will convert recycled animal fats and used yellow grease into the company’s OxEG Biodiesel. The completion of this transaction is expected to be announced shortly. “Much of the biodiesel that is sold on the open market for on-road use is marketed at prices ranging from approximately US$1.45 per gallon, to over US$2 per gallon in some cases,” said Harrison A. McCoy, III, president and CEO of the company. “It is the intention of Southern States to invest in companies that will market OxEG Biodiesel at various prices, but at levels that will always be lower than that of their competitors. “Installing production capacity in a location with an abundant and secure supply of feedstock and utilizing superior production technology will also allow production to ramp up quickly and generate profits more rapidly,” said McCoy. “The company’s investments are now concentrated in two major areas: The development of green fuel to power generation, and the sale of fuel into the fast-growing on-road market.”
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