Business update from Kreido Biofuels 
Kreido Biofuels, Inc. has provided a business update. Chief Executive Officer Ben Binninger reported, “We have accomplished a great deal since our financing in 2007, and we are continuing to address the significant market and financing challenges affecting our industry and our company. We remain confident that our advanced technology will enable us to achieve both better raw material utilization and lower operating costs than conventional biodiesel plants. We believe these factors, coupled with our favorable plant location and our feedstock flexibility, position us to succeed.”
"We are pleased to report on our progress during the last few months, including:
* Built two additional STT® reactors, each with approximately 13 mgy capacity, for our next plant at our expanded laboratory and reactor manufacturing facility within our Camarillo headquarters
* Completing the durability and mechanical testing of our commercial-scale STT® reactor system in Kreido’s manufacturing facility
* Finalizing the fabrication of the production modules at Certified Technical Services L.P. in Houston Texas, which await shipment to the Wilmington site
* Obtained Federal and State regulatory approvals for 100M gallons of annual capacity for our Wilmington, North Carolina plant, although a limited number of local and county approvals still remain
* Successfully conducting additional laboratory test runs with the STT® reactor using soy, canola/rapeseed, jatropha, karanja, pork and chicken fats
* Hosted distinguished biofuels scientists Dr. Naveen Kumar from Delhi College of Engineering in India and Dr. Lincoln Cambraia Teixeria from CETEC in Brazil, to facilitate prospects for commercializing Kreido technology in their countries
* Vigorously pursuing numerous sources for funding, including: debt, convertible debt, Port of Wilmington bonds, equipment and working capital lines of credit as well as partnering or other equity-type financing"
Operation of Kreido’s Wilmington, North Carolina biodiesel facility is presently expected to commence in the fourth quarter of calendar 2008, subject to securing the necessary financing. Kreido’s plant will be equipped with in-line monitoring and fully integrated control systems, and will be situated on a deep water port further enhancing its attractiveness by providing access to U.S. East Coast and European market as well as for sourcing of imported feedstocks.
The Wilmington plant will operate initially using vegetable oils as the feedstock and it is expected to provide employment for up to 20 local employees. Kreido also expects the Wilmington facility to serve as a showcase for carrying out the company’s licensing strategy on a global scale.
“Although these are all important milestones toward our goal of commencing biodiesel production in 2008, our efforts have been materially and adversely affected by unprecedented increases in the cost of vegetable oils, downward pricing pressure on biodiesel, and the severe contraction in the capital markets in general and in the alternative fuels sector in particular. The tightening of potential margins in the alternative fuel sector is affecting the ability of biodiesel companies to attract needed capital,” stated Binninger.
“We expected by now to have raised the additional funds necessary to commence construction at Wilmington. Due to delays in funding, obtaining final governmental approvals and in light of current adverse biodiesel market conditions, we have pushed back our target commercial production date to the fourth quarter which would still allow us to benefit from the government mandate for the use of 500 million gallons of biodiesel that becomes effective on January 1, 2009 through the Energy and Security Independence Act of 2007.
“The initial Wilmington plant will have annual capacity of 33-50 million gallons. We must raise approximately $25 million for working capital and to complete this plant, which we now estimate will cost between $30 million and $32 million. This cost estimate includes approximately $4 million to prepare the site for the second modular unit that would bring capacity up to 66-100mgy. The increase in construction cost is due to the delay in completing the plant, process changes and improvements as well as additional requirements related to permitting and government approvals.
“As of December 31, 2007, Kreido’s cash balance was $6 million. We believe we have sufficient cash to continue to operate the Company’s Camarillo headquarters, laboratory and manufacturing facility while we continue to seek the necessary financing to commence construction. We have scaled back our spending in light of our current financial resources and will continue to manage our spending accordingly. We believe that by distinguishing Kreido from other alternative fuels companies, we will be able to attract the needed financing when capital market conditions stabilize and financing sources seek opportunities in our sector. We recognize that further delays in arranging financing and remaining approvals will adversely impact our Wilmington plant cost and construction schedule.
“The Kreido technology we will be installing will accelerate the rates of chemical reactions, increase conversions and yields and lower operating costs using less equipment than conventional processes. We remain as confident as ever that with adequate financial resources, we have the ability to deliver a more efficient biodiesel production facility. We expect to file our annual report on Form 10-KSB on March 31, 2008, which will contain additional information,” concluded Binninger.
Related categories: Biofuels and biomass
