Xethanol’s Luncheon Presentation in Atlanta: Key Takeaways (XNL)

Jul.13.06 | About: Xethanol Corporation (XNL)

Xethanol Corporation (AMEX: XNL) held a luncheon presentation in Atlanta, GA on July 11th, to discuss its expansion plans on the east coast and specifically in Georgia. I was invited by Xethanol Corp. to attend the luncheon and I obviously had a great time. Xethanol is one of the few pure play publicly traded ethanol companies and I wasn’t going to miss the opportunity to attend the presentation and meet with its executive team.

Following are some of the key points from the presentation and the Q&A session held by Mr. Chris Taylor.

Xethanol is focused on the East Coast.

Xethanol will be opening ethanol plants in Augusta, GA and Savannah, GA

Most of the management team will move on down to Augusta, GA

Xethanol is also looking at some sites in North Carolina and Maine

They see southeast as an important and underserved area and the epicenter of the forest products industry. Plan is to open plants close to raw materials and save on transportation.

Looking at closed Paper mills and then retro fitting them to save money rather than constructing brand new plants.

Another option might be to co-locate with Paper mills.

Could co-produce bio-diesel with its licensing arrangement with H2Diesel, Inc.

Will be focused on small ethanol plants rather than huge ones like some other Ethanol companies are planning.

Although, they have explored California they are not looking at building plants up there for now. With the whole management team in the East coast it will be hard to focus on California.

About $40 million in the bank and cash flow positive

About $250,000/month burn rate.

Ethanol production target for the end of 2007 are as follows:

South East - 150 million gallons

Midwest - 60 million gallons

North East - 100 million gallons

To me the best part of this company is its focus on Cellulosic Ethanol rather than ethanol from Corn. For ethanol to be a viable alternative to oil we need to focus on research in the cellulosic ethanol field. Xethanol’s business model to locate small plants near major east coast cities also seems very promising. A lot of money has flowed into the ethanol sector recently but smart money has focused on cellulosic ethanol. Iogen with investments from Shell and Goldman Sachs and Vinod Khosla starting a cellulosic ethanol company called Cilion on top of his investments in PRAJ are just some of the promosing aspects of cellulosic ethanol.

I would like to thank Xethanol for inviting me to the luncheon. It was great talking to the executive team and see the excitement they showed for the future of their company and the ethanol sector.

If you have any questions leave me some comments or email me at comments@FinancialNirvana.com and I will answer them. Also, if you have any questions for Xethanol maybe I can combine them and see if I can get Xethanol to answer them.