Global Clean Energy Holdings, Inc. Issues an Annual Update to Shareholders and Provides Jatropha Oil for Demonstration Flight in
April 14 2011 - 7:19AM
Global Clean Energy Holdings, Inc. issues a letter to shareholders.
To All GCEH Shareholders:
As the President and Chief Executive Officer of Global Clean
Energy Holdings, Inc. (OTCBB:GCEH), I like to send an annual letter
to my fellow Shareholders to provide an update about the past year
and our plans for the coming year.
Through our wholly-owned Mexican corporation, Globales Energia
Renovables, we provided feedstock for the April 1, 2011 Interjet
demonstration flight on an Airbus A320 fueled by "Green Jet Fuel,"
produced by Honeywell. We are very proud to be part of this
initiative and we were fortunate to be on the flight and experience
first-hand a significant event in aviation history.
I am sure you are all aware of the increase in the price of
fossil fuels over the past year. This is a result of two major
events occurring simultaneously—the growth of demand in the
commodity market, as the world economy recovers from its worst
financial crisis since the Great Depression; and uncertainty in oil
supply caused by unrest in the middle-east and northern Africa.
Although these events have been anticipated for some time, price
increases are affecting many industries. In response, large users
are aggressively looking for alternatives for their current supply
chain of fossil fuels.
Global Clean Energy Holdings is in the business of growing plant
oil, which provides an alternative to the world-wide
over-dependency on fossil fuels. The motivation for this endeavor
is to achieve both clear and sustainable environmental benefits
while simultaneously mitigating volatility and instability in the
world-wide oil markets. Global oil demand is expected to
continue to grow and its corresponding prices are expected to
mirror that trend. By providing alternative oil into the
market, at our expected production cost of $42 per barrel, we will
generate recurring profits, while making significant environmental
improvements globally.
Our primary focus remains on delivering on our business plan
which will in-turn provide shareholder value. The current demand
for plant oils, biofuels, and replacement fuels provides virtually
unlimited opportunities for our products. We continue to build out
the entire supply-chain model. This is not an easy or fast process,
and it is not a short-term investment. Our model is the foundation
for a long-term, highly-profitable business solution and we are
well-poised to lead this effort.
This past year we have accomplished many things. The most
significant accomplishments include:
- We entered into an off-take agreement with a U.S.-based
renewable diesel processor to supply millions of gallons of crude
Jatropha oil over the next 20 years. We are currently seeking
project financing for this dedicated farm.
- We increased our farm size by more than 65%.
- We increased our full-time employees by 75% to more than
375.
- We increased our asset base by more than $3.5 million. We
continue to invest in assets and expand our farming
operations.
- We improved our liability-to-asset ratio by 17%.
- We formed a non-profit research center, the Center for
Sustainable Energy Farming (www.CfSEF.org) to continue our genetic,
agronomy and horticulture research efforts.
- We purchased and prepared an additional 3,450 acres and
continue planting through the season. We are acquiring additional
land this year, and will prepare and plant that land before the end
of 2011.
- We continued to increase the sales of Jatropha oil, biomass and
seeds from our farms.
- We continued to generate development and management fees by
providing management and advisory services to partners and third
parties.
- We continued to provide Jatropha oil and biomass for conversion
into fossil fuel alternatives and for the development and testing
of high value products, and new markets.
- We continued to invest in our research efforts internally and
in partnership with the CfSEF, who has a Master Research Agreement
in place with Penn State University. We continue to invest in
Intellectual Property development.
- We raised an additional $3.7 million in project equity and
financing.
- We applied for approximately $20 million in low-cost financing
through the Overseas Private Investment Corporation, (OPIC) a U.S.
agency designed to assist U.S. companies with international
development in targeted countries.
- And as stated above, we recently supplied Jatropha feedstock
from our farms in Yucatan, Mexico to ASA, the Mexican National
Airport authority. The oil was converted by Honeywell's (UOP)
division into bio-jet fuel for a demonstration flight which took
place in Mexico on April 1st, 2011, on an Airbus A320 operated by
Interjet of Mexico. We were passengers on that flight along
with a number of Mexican officials, Interjet executives and
representatives from Honeywell and Airbus. This is part
of a larger national bio-jet initiative within Mexico--which has
declared a goal of 15% of all jet fuel consumption to come from
biofuels by 2020. We plan to be an integral part of that supply
chain.
In addition to our focus on core competencies, we are also very
proud of the community work we are doing with local villages near
our farms. We generally don't publicize these efforts but as
supporters of our company, I feel you should know about the
community work that the Company and our employees are doing to
improve social conditions in local communities where many of our
employees live. We provide health care services for our workers and
their families including inoculations, vitamins and heath
training. When we began, the local villages near our farm had
a part-time doctor and clinic. Now there is a full-time doctor
and a fully-staffed and -supplied clinic with a new
ambulance. When we recently found out that many local school
children were coming to school hungry, we quickly implemented a
breakfast program. We now feed more than 125 students breakfast
daily before class. We donate construction supplies for the
repair of school facilities and our employees donate their time to
perform necessary repairs. We have plans to donate computers
to the schools and hope to expand the wireless service at our farm
so that they can have access to the internet. We are looking
into a "sister schools program" with schools in the U.S. As we
grow, we hope to expand these efforts, to touch more communities
and improve more lives.
Since we refocused the Company in 2007 to be a renewable energy
company, we have had one primary goal -- preparing the company to
be a leader in the bio-fuels space. We have worked diligently
to develop the infrastructure needed to execute a scalable growth
model as the financial markets ease and allow us access to growth
capital. We are successfully testing this model. In a short
time, we have reduced the capital costs needed to develop energy
farms by more than 30%, and we continue to improve operating
efficiencies by reducing operating costs. We are committed to
being "the low cost producer" in the biofuels feedstock market.
In our last shareholder meeting, you overwhelmingly approved a
State of Incorporation change from Utah to Delaware, and granted
our Board the authority to institute a reverse stock
split. Both of these changes are part of a bigger plan to
expand the company and prepare it to carry a higher stock
price. We have completed the State of Incorporation change to
Delaware but decided to wait on the reverse stock split until our
other business efforts warranted a reduction in the number of
outstanding shares. The recovery of the financial markets is
still affecting small companies and as a result the stock continues
to trade in a lower trading range. We hope this will correct
itself with time as we successfully deliver on our business
plan. The weather in Mexico late in 2010 had a negative effect
on most agricultural business in the region, and we were not immune
to these weather-related challenges. However, we expect to have
very good sales and revenue in 2011.
This continues to be a very exciting business for all of
us. We have a very unique opportunity that rarely comes along;
we are positively affecting more than 1,000 lives, improving the
environment and making the world a safer place, while building a
sustainable long term business solution. As I said before, it
doesn't get any better than this.
I continue to be very proud of our entire team. I am
inspired daily by their hard work, commitment to excellence, and
their kind hearts. Thank you for being part of this effort,
supporting our goals, and being patient as we work towards
[literally] changing the world for the better. We never forget
the responsibility that you, the shareholders, have entrusted to
us.
Sincerely,
Richard Palmer President and Chief Executive Officer Global
Clean Energy Holdings, Inc.
This shareholder letter contains forward-looking statements
which involve risks and uncertainties, including without
limitation, those discussed in our reports on Form 10-K, 10-Q and
8-K. We undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
CONTACT: Global Clean Energy Holdings, Inc.
Merilee Myers
mmyers@gceholdings.com
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