AEC was organized to operate as an ethanol producer, focusing primarily on the production and sale of ethanol and its co-products. AEC's founders believed that its assembled team represents a formidable pool of talent that possesses extensive experience on Wall Street, in the investment banking industry and, of high importance to ICRI and its shareholders, in the ethanol industry. It is management's intent to leverage this range of industry experience by identifying and capitalizing on opportunities within the ethanol industry. To date, under its plan to construct an ethanol production facility in Manchester, Iowa, AEC has made the following important progress towards:
- Obtained $2 million in private equity funding;
- Acquired an option to purchase land for proposed ethanol production facility in Manchester;
- Signed five-plant engineering and design agreement with Delta-T Corporation (Delta-T has over twenty years of experience in the ethanol industry that management believes possesses superior expertise and technologies in the ethanol production space).
- Engaged Natural Resources Group to handle water-related environmental matters; and
- Engaged Yaggy-Colby to handle air-related environmental matters.
In addition to these construction-related activities and in furtherance of its business plan, AEC continues to pursue vigorously many opportunities to acquire part or all of existing ethanol production facilities located in several locations in the Midwest. AEC must obtain significant funding, in order to complete any one or more of the opportunities being pursued.
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Currently in the United States, at both the federal and state government levels, Public policy is strongly in favor of the development of sources of renewable fuels. In the wake of this strengthening, the ethanol industry has grown significantly over the last several years, expanding production capacity at a compounded annual growth rate of approximately 20% from2000 to 2006, and is expected to continue to grow as a result of its favorable production economics relative to gasoline, due to ethanol's clean burning characteristics, a shortage of domestic petroleum refining capacity, geopolitical concerns and federally mandated renewable fuel usage.
According to the Renewable Fuels Association (RFA),domestic ethanol production has increased from 1.3 billion gallons in 1997 to a current production capacity of approximately 5.4 billion gallons. Recently, the RFA estimated ethanol facilities with capacity of an aggregate of an additional 6.1 BGY were proposed or under construction. Ethanol is a type of alcohol. In the U.S., ethanol is produced principally from corn.
Ethanol is primarily used as a blend component in the U.S. gasoline fuel market, which approximated 140 billion gallons for 2005, according to Energy Information Administration. Refiners and marketers, including some of the major integrated oil companies and a number of independent refiners and distributors, have historically blended ethanol with gasoline to increase octane and reduce tailpipe emissions. Ethanol is also used as the primary blend component for E85, a fuel blend composed of up to 85%ethanol. Approximately 6.0 million vehicles on the road in the U.S. today are flexible fuel vehicles. The primary uses of ethanol are octane enhancer, clean air additive, valuable blend component and E85. |
