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GSPI - GSPI Completes Purchase of Two Super Ethanol Plants and Continues Construction of Its Biodiesel Plant6/10/03
SAN DIEGO, Jun 10, 2003 (BUSINESS WIRE) --
Green Star Products, Inc. (OTC:GSPI), formerly BAT International (OTC:BAAT), announced today that it has recently completed the purchase of two commercial super ethanol plants.
GSPI originally purchased a 60% equity position in the two 'super ethanol'plants in November 2002 (see press release dated Nov. 5, 2002). Since that time, GSPI has been negotiating to acquire the balance of 40% ownership.
The facilities are located in the state of Kentucky. The purchase agreement also includes the acquisition of 100 percent of the intellectual property to produce 'super ethanol.'
'Super ethanol'is covered by three patents that describe the process to form a new higher-octane ethanol to increase octane in fuels. The final 'super ethanol'usage application patent was recently granted patent status (February 2003). 'Super ethanol'has a much higher octane rating than regular ethanol, which would allow for a wider acceptance of ethanol by the consumer by reducing the percentage requirement in gasoline blends by 30 percent.
GSPI's two 'super ethanol'plants were built in 1993 and each has a production capacity of 30,000 gallons per day. They were modified in the year 2000 to meet OSHA and API insurance requirements. One facility is still 9 percent owned by the Somerset refinery where it is located. The ethanol plants use a platinum catalyst and are designed to operate at a pressure of 500 psi and a temperature of 275 degrees Fahrenheit. The plants have a combined book value of over $4 million but shall be booked at a much lower cost basis on GSPI's financial statements as defined by accounting procedures.
The plants and intellectual property were purchased by GSPI for a combined financial package that includes six million shares of GSPI stock, a $4 million net profit royalty at five percent, the completion of phase two of the 'super ethanol'processing program at Southwest Research Institute and a two percent net profit continued royalty after the initial five percent royalty is completed.
The plants have been designed with a dual operating function that also allows them to be used to upgrade low octane gasoline to a consumer grade. Both plants will need some additional upgrades before any production can start.
GSPI has been involved in renewable fuels for many years. GSPI's long-term acquisition program is designed to trade its engineering expertise, proprietary knowledge and publicly traded stock in exchange for hard asset plant production capacity to produce biodiesel and ethanol products.
ABF Construction of Bakersfield Biodiesel Plant
GSPI also purchased a 35 percent interest in American Biofuels in July 2002 (see press release dated July 23, 2002). American Biofuels announced in February 2003 that it was assembling the largest biodiesel production facility in the U.S. at the Bakersfield, Calif., location (see press release dated Feb. 24, 2003). The production capacity of this plant is expected to reach 35 million gallons per year at full production. This is significant when considering the entire U.S. production of biodiesel in 2002 was only 15 million gallons.
The Bakersfield plant was initially engineered to be a smaller plant, but the proprietary reactor/separator modular design indicated that a larger plant could be built at a much lower incremental cost. As a result of this change in design, some unexpected delays have been experienced in several areas including delivery of the equipment. Presently, initial production is scheduled for late summer of 2003.
American Biofuels is a member of the National Biodiesel Board and presently has the only continuous flow production plant in the United States to produce EPA (ASTM) specification grade biodiesel.
Presently, there is a tremendous effort in the U.S. and abroad to move away from the unstable petroleum fuel market and toward renewable domestically produced biofuels, e.g. a sustainable development economy.
The Energy Bill and the Farm Bill contain many incentives to expand biofuel production and its use in the U.S. Both bills are receiving bi-partisan support.
The cost of petroleum fuels will eventually increase. Meanwhile, the cost of biofuel has been decreasing and production has increased due to technology advances and economies of scale in production and higher demand.
Some advantages of using biofuels (both ethanol and biodiesel) include:
1. They support the American farmer's work.
2. They are new industries that create new production jobs.
3. They insure against oil embargoes.
4. They reduce life cycle CO2 (a greenhouse gas).
5. They reduce dependency on foreign oil.
6. They are a renewable energy source.
7. They reduce hydrocarbon and carbon monoxide emissions.
8. They reduce particulate emissions and smoke.
9. They rate higher cetane and octane values.
10. They contain no sulfur or cancerous toxins.
11. Their quality is assured by recent ASTM standards.
It is interesting to note that the diesel engine, which was invented by Rudolf Diesel, was designed to operate on renewable vegetable oils and not petroleum diesel. The way industry is being fueled is now changing and will continue to change as petroleum fuels run out.
Green Star Products, Inc. is organized as a holding company with major ownership positions in a set of affiliate and subsidiary companies now commercializing advanced automotive and energy technology products. For more information, see GSPI's Web site at http://www.baat.com or call Investor Relations 619/409-8977, Fax [phone], or email [e-mail]. Information about trading prices and volume can be obtained at several Internet sites including http://www.bloomberg.com under the ticker symbol 'GSPI.'