CHARLOTTE, N.C. -- NewGen Technologies Inc. has formed a new wholly owned subsidiary, NewGen BioFuels Inc., to focus on investment and strategic partnerships in renewable fuel production ventures, providing ReFuel America's fuel supply and distribution operations with what it said are the lowest-cost, highest quantity ethanol and biodiesel.
The mission of NewGen BioFuels is to identify and acquire whole or part ownership of biofuels producers that will provide significant and immediate opportunities for a return on investment as well as biofuels off-take [image-nocss] agreements that will provide NewGen and ReFuel America ample supplies of biofuels for the growing U.S. transportation fuel market. In addition, it will source the lowest-cost worldwide feedstocks to ensure profitable operations at these production facilities.
James Peeples will serve as president of NewGen BioFuels and continue in his role as senior vice president of business development and government relations for parent company NewGen Technologies.
NewGen BioFuels' strategic plan for expansion upon its initial mandate to supply the ReFuel America terminals and the APPCO supply agreement:
1. Secure biofuel supplies (ethanol and biodiesel) for ReFuel America terminals and other independent wholesale and retail customers like APPCO. This will be accomplished through strategic agreements and acquisitions that will enhance core profitability of NewGen's supply and distribution operations, ensure the highest quality fuels, as well as maintaining environmental responsibility in the markets we serve.
NewGen BioFuels will be a supplier of biofuel products initially in Tennessee, Virginia and Kentucky thanks to NewGen's long-term strategic agreement with Appco, which is expected to close in September 2007. Appco operates in six southeastern states selling more than 450 million gallons of fuel products annually through more than 200 retail outlets and through independent wholesale dealers. This market alone represents potentially as much as 50 million gallons or more of biofuels sales.
ReFuel America's four petroleum product terminals, strategically located along two of the nation's largest common carrier pipelines in North Carolina, South Carolina and Georgia, give NewGen BioFuels and ReFuel America the opportunity of directly providing more than 800 million gallons of blended biofuel products. Revenues from just these terminals when fully operational, given this amount of fuel sales capacity, are estimated to be in excess of $1 billion per year.
2. Seek investment opportunities through NewGen BioFuels of destination production facilities near to efficient transportation to large fuel markets that would vertically integrate and increase our leverage and position in the biofuel production and supply chain from the fields to wheels.
NewGen BioFuels' management team, strategic partners and investors are also pursuing the targeted acquisition of global and domestic biofuels feedstocks to supply the needs of NewGen's production partners that will supply the company's existing and future fuel distribution network.
3. Expand the markets it serves through strategic acquisitions and organic growth in surrounding markets.
As a unique, vertically integrated biofuel production, supply, and distribution company, NewGen will grow by leveraging its existing assets and expanding distribution supply agreements already in place, said Peeples. We are working to expand our operations, staffing up our new biofuels subsidiary with an experienced team of professionals, and maintaining our focus on further distribution of quality fuels to many customers, ultimately leading to significant growth in our surrounding markets in the southeastern United States.
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