Acquisition Aims for California Ethanol Market

May 19, 2004 [] Accessity Corp. has signed a definitive agreement to acquire Pacific Ethanol, Inc., Kinergy Marketing, LLC and Re-Energy, LLC in a stock-for-stock share exchange transaction. Pacific Ethanol and Re-Energy are in the business of developing large-scale ethanol plants in the Western United States where Kinergy Marketing is currently engaged in the business of marketing ethanol. The combined companies seek to become the first California-based, vertically integrated ethanol producer and marketer. According to industry sources, the annual demand for ethanol in the United States has doubled over the last four years to a projected three billion gallons in 2004. Pacific Ethanol expects California’s ethanol demand to increase to nearly 1 billion gallons this year representing approximately one third of the current total U.S. market for ethanol. Also according to industry sources, practically all of the estimated 750 million gallons of ethanol used in California in 2003, with a wholesale value of approximately one billion dollars, was imported by rail or ship, mainly from Midwest-based producers. Pacific Ethanol plans to commence construction in the third quarter of 2004 of a $50 million ethanol processing facility at Pacific Ethanol’s existing grain handling and storage facility located near Madera, California. The Madera, CA facility is expected to produce 35 million gallons of ethanol annually.


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