The Ethanol Project

A Feasibility Study
Government and Policy
 Progressive State Actions

•Public Education about Ethanol

•Direct Financial Incentives for Producers and
Customers
•Possible use in all state vehicles
Policies Regulating Ethanol Production

•Recent Energy Bill secures market and increases

demand – new plants will be needed
•New plants must follow same guidelines as
commercial refineries
•Currently no other regulations, but more may
follow
 Overall Assessment

•Prospects for local Ethanol plant is positive

•New legislation supports the initiative

•No major obstacles, regulatory or otherwise,

facing new plant
Supply
 Where will the corn come from?

•Whenever possible, the feed stock will come

from local suppliers. However, price will
dictate the supplier of our input materials

•If it is cheaper to truck in corn from outlying

areas or haul corn in by railcar, then the
material will be sourced that way
 Local Corn Production
•In Delaware about 160,000 acres of corn are planted
each year

•At an average yield of about 100/bu per acre that

produces 16 million bushels per year

•Total production on the Delmarva peninsula in 1999

was over 39 million bushels

•So, local producers grow more than enough corn to meet

the needs of our proposed facility
 What acreage is needed of Corn
to supply needs?
•Manufacturing states we need 8,712,000bu/yr
•Delaware produces on average, 100 bushels per
acre
•So, if all the corn is sourced from within
Delaware a total of about 87,120 acres is
needed
 What is the projected cost of the
crop delivered into the plant?

•The cost of the crop is based on the price from

the source with the added cost of transportation
•Assuming a crop price of $1.94/bu
•Trucking would add .08/bu
•Railcars would add .70/bu
 Total cost of crop

•Since all our corn requirements can be met

locally and we need 8,712,000
bushels per year, then with a cost of
$1.94/bu of corn and truck hauling
cost of $.08/bu

•Our total cost for corn each year would be

about $17,598,240
 Total cost of crop cont.

•In addition to our variable input costs, the

fixed costs of land, rail sidings, and
storage facilities would also have to be
considered as a part of the total capital
costs by the manufacturing division
Manufacturing
 Objectives

1) Produce ethanol from corn at a minimum expense

2) Produce several co-products to enhance company

profits
 Assumptions

1) Corn supply could be transported on-site at a

cost lower than that of production.

2) Corn prices will remain low enough to make

production feasible.

3) Local customers will utilize all of our ethanol and

co-products.
 Assumptions cont.

4) Competition from Delmarva Poultry industry

will not detract from profits of either.

5) Price assumptions
•Corn @ $1.94 per bushel.
•Production cost @ .88 per gallon.
 Results
•Plant production capacity: 25 million gallons per year
(330 Working Days)

•Production Process: Wet Milling

•Production Results
1)25 million gallon requires 8.8 million bushels of corn.
2)Initial capital investment = $ 27.9 million.
 Results cont.

3) Annual operational cost = $ 22 million per year /

$ 66,667.04 per day.
4) Corn/Ethanol Transportation Considerations
• Assuming 4000 bushels of corn per car,
we require 33 cars in per week.
• Assuming 10,000 gallons ethanol per car,
we require 38 cars out per week.
 Co-products

1)Distillers Grain
2)Corn Gluten meal, 60%
3)21% Protein feed
4)Corn Oil
5)Carbon Dioxide
Wet milling Process
Marketing
 Recommendations
• Acquire help from American Coalition for
Ethanol in regards to product development
and advertising

• Sell product to refineries

– 80% gas
– 20% ethanol
 Recommendations cont.
• The blend can be used in most engines
– End of the line consumer: Typical car owner
• Pursue a contract with a rent-a-car business
– Only buy 80/20 blend
– Shows a market for our product
• Secondary product: Corn Glutton Meal
– 60% protein
– No negative side effects
 Secondary Product
• Target poultry industry

• Establish a contract with Perdue or like

company
– Corn costs rise
– Offer our meal at a reasonable price

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