HOUSTON, TX -- 06/10/08 --
Dear Shareholder:
As the new Interim CEO of Gulf Ethanol (PINKSHEETS: GFET), I want to take a
few moments to talk to you as one of the owners and shareholders of the
Corporation. In every change of leadership, a company adjusts its course
to work toward improving its performance in order to maximize the benefits
to its shareholders. During my term in leadership, I expect to keep in
touch with you as shareholders as often as possible and keep you up to date
on developments within the company.
Management. We are currently in the process of recruiting additional
talent to our management team and Board of Directors. We announced last
week the addition of Robert Wilson to our Board of Directors. Robert is
the CFO of Clean Power Corp. based in The Woodlands Texas and is a Texas
CPA. He adds a strong knowledge of alternative energy and finance to our
Board of Directors. Upon the retirement of our former Chairman and CEO,
JT Cloud, I decided that we needed to broaden our management team and
expand our Board of Directors. We expect to continue with this process
throughout 2008.
Technology. As I look at the future of Gulf Ethanol, I am most excited by
the development of our new cellulosic ethanol feedstock preprocessing
technology. I know that is a mouthful, so let me explain. As ethanol
plants proliferated across America's Midwest, corn prices began to rise
which cut deeply into the profits of U.S. ethanol producers. In addition,
higher corn prices affected cattle and food industries as well creating a
negative backlash against the ethanol industry and most of its publicly
traded companies. As a result, the industry lost significant value over
the course of the last year.
Experts agree that the answer lies in new technologies that can convert
cellulose (rather than sugars and starches) into ethanol. The reason is
that cellulose is produced by all plants and is the most abundant
biological material on earth. It is widely available in most of the world
in the form of grasses, agricultural waste, sawdust, etc. The problem
today is that current technologies are not efficient in converting biomass
to ethanol. In addition, because of the bulkiness of most biomass,
transportation costs are high. This is where we believe our new technology
will fit within the nascent cellulosic ethanol industry.
Our first machine is currently being constructed for delivery sometime in
June 2008. We expect this machine to transform many types of cheap biomass
into a very fine, dry powder for processing into ethanol. This
preprocessing off cellulosic biomass into a fine powder is significant for
several reasons:
-- First, the fine, dry powder that we expect to produce will be more
efficient to transport because the moisture will have been removed reducing
weight and volume;
-- Second, the consistency of the feedstock will be dramatically altered
by turning it into a uniform powder which can be conveyed and processed
much more efficiently;
-- Third, the surface area of the feedstock is increased as the particle
size is reduced which further increases the efficiency of processing,
thereby increasing the amount of ethanol extracted from the feedstock;
-- Fourth, the speed of processing into ethanol is increased because the
size of the particles of each feedstock has been reduced.
As a result, we believe that our technology, after we have finished testing
and development, will play an important role in the advancement of
efficient cellulosic ethanol plants in the U.S. and around the world.
Technology Development. Every new technology must be tested before it is
ready for final deployment. We will begin the testing of our technology
this summer after delivery of our initial processing unit. This will
include the testing of different potential feed stocks such as switchgrass,
sorghum, sawdust, grass clippings, etc. The product we produce from these
tests will then be sent to nationally recognized laboratories to be tested.
The purpose of these tests is to both verify the quality of the feedstock
pre-processing achieved by our technology and to determine the efficiencies
produced by our preprocessing of the various feedstocks. This information
will allow end users to evaluate the value of what we have to deliver as
part of the biofuels industry.
Based upon the results of our initial testing, we expect to make
adjustments and improvements to our technology platform to prepare it for
final commercial delivery. Please watch for our press releases and
disclosure filings where we will update you regarding our progress in the
coming months.
Our History. Under prior management, Gulf Ethanol has attempted to advance
a variety of alternative energy strategies which were not successful. The
Company attempted to engage in the international trading of ethanol, it
attempted to acquire a couple of different facilities which it was unable
to close and it even attempted to build an ethanol plant in China, Texas
but abandoned that effort after meeting with resistance from the community.
In December, we entered into an agreement to jointly develop a technology
that had been proposed by Meridian Biorefining but found they could not
deliver to our specifications.
The inability of the Company to complete these projects slowed our
development and diminished our performance as a Company during this period.
The new management team cannot change history but we believe we can write a
new future for the Company by advancing and expanding on the technology we
are about to complete. We expect to try to maintain a focused approach to
what is working and to advance this technology to full implementation.
With traditional energy costs shooting through the roof, people are more
aware of the importance of developing alternative and renewable sources of
energy as quickly as possible. The initial ethanol plants built in the
U.S. use corn for their primary feedstock. This business strategy has not
worked well since food prices and corn prices have risen with the increased
demand for corn. Cellulosic biomass should not have this same problem
because the materials are non-food plant crops and because they are far
more widely available. We don't expect cellulosic ethanol to replace oil &
gas but, rather, to supplement traditional fuels. In addition, because
these fuels can be produced locally, they help develop energy independence
based upon locally produced renewable energy sources.
Our Stock. As a Pink Sheets stock, we don't recommend that any investor
over concentrate their investment in any one company. We have and will
continue to strive to meet all of the disclosure requirements of the Pink
Sheets to maintain their full, current reporting status -- called PS
Current. We do this in order to try to keep you, as our shareholders,
informed of our current financial and operating status. Pink Sheets
companies, however, do not share the same rigorous disclosure requirements
of SEC reporting companies so investors may have less information on which
to make their investment decisions.
Pink Sheets stocks are often subject to traders who try to make money by
shorting these stocks. Their method generally includes posting negative
comments and, often, misinformation on blogs and message boards in order to
create a negative view of a particular company while they are selling short
into the stock. These bloggers seldom have any unique or inside
information about the companies they are shorting and are, generally, not a
reliable source of information about a company.
In Conclusion. We believe that the implementation of our new technology
will be beneficial to our shareholders by validating the Company's business
plan and by moving us toward profitability based upon a technology for
preprocessing biomass into an efficient feedstock for ethanol producers.
Realizing that many of you have been shareholders of Gulf Ethanol for a
long time, I want to thank you for your confidence in the Company. I will
be working hard to earn your continued confidence and to advance the
Company as an important participant in the emerging cellulosic ethanol
industry in coming months. Thank you for your support of the Company.
Keep an eye on our progress in coming months and I believe you will be
pleased with what we are able to achieve.
Sincerely,
/S/
William Carmichael
Interim CEO
About Gulf Ethanol Corporation
Gulf Ethanol is an alternative energy company focused on the development of
the cellulosic ethanol industry with a particular emphasis on Texas and the
Gulf Coast. For more information please visit our homepage at:
www.GulfEthanolCorp.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: This news release contains forward-looking information within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, including
statements that include the words "believes," "expects," "anticipate" or
similar expressions. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the company to differ materially
from those expressed or implied by such forward-looking statements. In
addition, description of anyone's past success, either financial or
strategic, is no guarantee of future success. This news release speaks as
of the date first set forth above and the company assumes no responsibility
to update the information included herein for events occurring after the
date hereof.
CONTACT:
William Carmichael
1240 Blalock Road, Ste. 200
Houston, Texas 77055
Office: 713-461-9229
Email Contact
