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Farm To Fuel

Thomas Energy, LLC






A Project To Build 12 Ethanol Plants in the Southeast


Total Project Cost $1,440,000,000


Cost of Each Plant $120,000,000






Thomas Kovalchek

7200 Harcourt Crossing

Fort Mill, South Carolina. 29715

704 968 1173




The Project

Thomas Energy, LLC (the Company) was formed to meet the ever increasing demand by U.S. consumers for alternative fuels. Our primary objective targets producing approximately 70 million gallons of E85 fuel grade ethanol on an annual basis for the Southeastern U.S. market - a market which to date has been largely ignored by producers - through 12 plants to be built in that area.. At present, there are only two ethanol plants producing fuel for the Southern U.S. region; one 20 million gallon plant in Tennessee and a four million gallon plant in Florida. Consequently, there are very few stations dispensing Ethanol in the South, yet market demand is very strong. Over the first nine (9) years after funding, the Company will produce 2.5 billion gallons of fuel grade ethanol thereby controlling 22 percent (22%) of the total ethanol market in the United States. Therefore, our mission over the next ten (10) years is to become the producer of Ethanol for the Southern United States.

Ethanol is a fuel component utilized to enhance gasoline performance and abate gasoline exhaust primarily from processing corn into alcohol. It is a renewable source of energy because it is derived from corn, a readily available agriculture commodity. Ethanol's creation and use as a gasoline additive generally involves less toxic emissions than methyl tertiary butyl ether ("MTBE"). MTBE is a petroleum-based additive which is in the process of being phased out due to significant environmental concerns. Recently, the State of California began a ban on MTBE after detecting it in groundwater, and several southern states have either banned or are considering a ban on MTBE to be replaced by corn based Ethanol. Moreover, The Energy Act signed by the President in August 2005 is sharply reducing any incentives for the petroleum industry to continue using MTBE since there are no "safe-harbor" provisions to protect producers from litigation. Pipeline companies are refusing to ship gasoline with MTBE, which further compounds the incentive to move away from MTBE, thereby enhancing the opportunity for market adoption of ethanol. Lastly, since ethanol costs much less to produce and distribute (especially if its movement is less than 200 miles) than its petroleum counterparts, consumers are assured lower prices at the retail station.

Presently, only the Midwest is the major source for fuel grade ethanol (4 billion gallons per year) to meet the demands of the United States. Midwest producers are shipping 67,000 barrels of ethanol per day to California and 45,000 barrels per day of ethanol to New York and New Jersey. Consequently, hardly any ethanol is being sent to, or, produced in the southeast states.

The construction, operation, and support of our proposed 12 plants will not only meet the market demand for Ethanol in the Southeastern U.S., it will also generate approximately 9,000 jobs. Additionally, since our ethanol fuel is made from corn, our business model calls for the purchase of corn grown locally and within relative proximity to each of our plants, thus contributing significant economic benefits to local communities and farmers in which we operate. These farmers can expect as much as ten cents per bushel more due to our smaller transportation costs and will increase their crop growing operations given our continuous demand for corn. Once our 12 plants are online, daily production will deliver 55,548 barrels of fuel grade ethanol per day thereby further reducing the daily imports of oil and contributing significantly to the Department of Energy's mandate for 30% ethanol fuel in the marketplace.



Market Demand

Fuel usage and demand for alternative fuels have grown rapidly in the U.S. while the total ethanol production has seen minimal increases on a percentage basis.

The U.S. petroleum distribution system is divided into four regions: Chicago, New York/NJ, the Gulf Coast and the West Coast. The petroleum products sold to local gas stations originate from one of these regions. The southeastern United States where Thomas Energy, LLC seeks to built 12 fuel grade ethanol plants is served by the Texas based Gulf Coast distributors. Jim Jordan & Associates reported in their monthly fuel report that on August 4, 2006 9.62 million barrels of motor gasoline were consumed that day. Thus, each region supplies roughly 2.4 million barrels per day to their designated areas. The Renewable Fuels Association announced that the U.S. ethanol production and demand remained strong for July with the industry producing 316,000 barrels per day (b/d) while the country consumed 360,000 b/d.

The Department of Energy (September 22, 2006) has recently made a drastic postponement it its target date for expanded use of alternative fuels. Legislation passed in 1992 established a mandate that by 2010, 30% of all U.S. highway transportation fuel be made up of non-petroleum "replacement fuels", such as ethanol. However, it is readily apparent that the country cannot hope to achieve this target given the current and significant supply shortages.

Marketing & Sales

The Company has signed a renewable two year contract to sell our total production of ethanol to C&N Ethanol Marketing Corporation of Eagan, Minnesota. C&N Ethanol Marketing Corporation will then resell our ethanol primarily to the southeastern U.S. market (C&N will sell a small portion of our production to other markets). This agreement will automatically renew for subsequent two year terms. With this contract, the Company is assured sales of our total output and at fair market rates.

C&N was founded in 2002 by Mr. Bjornstad. He has over 20 years experience marketing ethanol to the U.S. refiner base for the nation's second largest ethanol producer. C&N ethanol sales are expected to reach 800 million gallons for 2006. C&N's clients include BP Petroleum, Chevron, Getty Petroleum, Gulf, Kern Oil Co and Marathon/Ashland.

Success Factors

Our study of existing modern plants of 40 million gallons per year or more has revealed levels of sensitivity in prices of co-products, feedstock and operating expense items. Since natural gas is the second largest expense in the ethanol process behind corn, the Company will work with Frontline BioEnergy to design a fluidizer bed vessel that will gasify biomaterial into a gas that is burned in place of natural gas. We expect a 60% cost reduction in our heating requirement by producing our own gas for heating. Moreover, a recent analysis of feedstock and co-products prices versus operating expenses revealed that dry mill ethanol producers were very profitable in 2004 and 2005. In fact, an Iowa farm co-op which started building a 40 million gallon Ethanol plant in 2004, used 2005 profits to completely pay-off its debts including construction costs.




Our business model, which is centered on producing Ethanol outside of the Midwestern corn-belt, is very viable, we believe, for the following reasons:

         Lower transportation costs: moving locally grown corn to our plants are considerable less than the competition.

         Lower distribution costs: our distribution costs to ship ethanol to the southeastern market are less than the competition given the proximity of our proposed plants.

         Greater profits: By employing advanced technologies, alternative fuel sources and recycling energy for our plants, combined with lower transportation and distribution, costs and a contract to sell our full production leads to greater profitability.

         Local economic benefits: We will generate a tremendous amount of jobs and, therefore, significant economic activity in the areas that we operate - areas that are some poorest in these states because they have suffered from erosion of agriculture income.

The company's goal is to construct 12 ethanol plants in the Southern U.S. We have selected Tunica, MS as our first. The locations of our proposed are:

1.       Tunica, MS

2.       Lancaster, SC

3.       Greenwood, MS

4.       Memphis, TN

5.       Valdosta, GA

6.       Atlanta , GA

7.       Jonesboro, AR

8.       Birmingham, AL

9.       Manning, SC

10.   Washington, NC

11.   Bartow, FL

12.   Fort Pierce, FL


General Introduction

Thomas Kovalchek, President and CEO

Thomas has extensive experience growing fibers for the last 15 years for product innovation and development. Prior to forming Thomas Energy, Kovalchek served as agriculture consultant to American Bast Fibers, a firm that grows harvests and processes ramie fibers for "tree free" papers in color computer printers.

Thomas' responsibilities include:

         Develops and maintains the company vision.

         Oversees all areas and company departments.

         Approves all financial obligations.

         Seeks business opportunities and strategic alliances with other organizations.

         Plans, develops and establishes polices and objectives of the business.

         Directs and coordinates financial programs to provide funding for new or continuing operations in order to maximize return on investments and increase productivity.

After starting a composite lumber (recycled plastic and sugar cane fibers) project in South Bay, Florida (1995) Mr. Kovalchek realized the opportunities available for adapting this new technology to other cities in need of recycling projects. His development and implementation of Tyson's core technology of steam exploding of fiber cells to open up the cell wall concept are proving to be a valuable and profitable source for cities in disposing of fiber waste.

In addition, Mr. Kovalchek previously was the Controller and Assistant Secretary at a raw sugar mill with sales of 75 million dollars annually. He was also instrumental in the start-up of a four million gallon ethanol plant in the 1990's in Bartow, Florida that utilized waste sugar streams as the raw material in the production of ethanol. Plant is still in production.

Ray Woody, VP Operations

Ray has over 32 years in business covering a wide variety of sectors in Texas and Mississippi. He is a major investor for the last twenty years in the rental market in the Town of Lewisville, Texas. In the 1970's he was the owner of a cleaning and maintenance firm that had the contract for fourteen years to maintain the Dallas Airport. He managed a staff of four and a crew of seventy-two. He was instrumental in the 1980's in the development of the crop kenaf in Texas and Mexico. A plant grown for its fiber contents as made into fine writing paper by a local paper manufacture and sold in the U.S. market. For the last seven years he has assisted several manufacturing firms to establish their operations in Anguilla, Mississippi.

David Still, CFO

David has 27 years in the accounting profession as a CPA in North Carolina. He specializes in the development of small businesses in the Charlotte, North Carolina area. David will lead all financial affairs for the Company. He has assisted firms in securing funds for corporate expansion with the development of business plans and one to five year budgets. To accomplish this goal, he has developed a comprehensive plan to intensify and accelerate the marketing and sales activities, product development, service expansion, engineering, distribution and customer service.

Mark Michaud, Secretary

Mark's primary role will be to manage equipment maintenance schedules to insure that ethanol production is not impeded. Mark has over 28 years in business covering a wide variety of sectors and he can effectively lead any project. With background in technology, business and marketing he has the ability to strategically develop projects from inception to completion. Mark has a proven ability to adapt and lead as needed in any business situation on a day to day basis. With Mark's strong business diversity he has channeled his efforts in manufacturing, equipment process design, mining, estimating, logistics along with retail and hospitality industry marketing, also including involvement in patents and intellectual property advances in North America that support energy fuel advances, water and magnetic technology markets and development.

George Tyson, VP Production

As Chief Engineer of Xylon, George brings twenty-seven years of R&D to the company having tested nearly every form of biomass, in nearly every combination. He is the holder of three patents covering the steam explosion of biomass. His technology is utilized in the production of decking boards, dust free cat litter, composite railroad ties and fuel grade ethanol.

George's key responsibility is to manage the daily production of fuel grade ethanol to ensure quality and compliance with the Department of Energy specification standards.

Clark Dale, Consultant

Dr. Dale has been working in the areas of bioreactor design and chemical separation for the past 20 years. He has presented over 60 papers and presentations of the subject to date. His work includes process conceptualization, directing lab scale experimentation, pilot scale design fabrication, industrial scale design, process flows, and process economics. He has developed technologies utilizing immobilized cells (yeast, bacterial, and plant cells), fermentative production of alcohols, organic acids, higher value products, and microbial biomass as well as distillation technologies and other product recovery process. He was CEO and design engineer for a small whey ethanol plant in Wisconsin from 1998-2000. His career in ethanol also includes project management assistance with plant start-up and personnel training at three dry mill ethanol plants during 2001 and 2002. Dr. Dale will consultant with the company to advise our staff in the fermentation process

Clifford A. Tate, Consultant

Clifford has a background in farming and currently runs a grain elevator in Mississippi. He will use his skills at the ethanol plant to achieve the lowest cost in the purchasing of corn for all sites. His prime responsibility will be to advise our staff of corn buyers in the procurement of corn inventory for our various plants.

Larry Johnson, Consultant

Larry has eighteen years experience in the fuel grade ethanol industry especially in the utilities required for efficient operation of the ethanol plant. He will be responsible for electric power including loads for process motors and utility motors including cooling tower fans.

William Hurst, Consultant

For the last fifteen years, William has been part owner of a 40 million gallon fuel grade ethanol plant in New Orleans. He has a working knowledge of all the process equipment in an ethanol plant from corn milling, distillation, and steam generation to ethanol storage.

Robert Hamlin, Project Engineer (Agrisystems, Inc of Billings MT)

Robert has been contracted to design and build each of our proposed 12 ethanol plants. His company, Agrisystems, Inc. has been selected as our project engineer. This company has been in business 33 years with their own ethanol process design. They will be responsible for process engineering, structural engineering design flow and adding additional fermentation equipment to the production of ethanol.

Funding Request

Thomas Energy, LLC seeks the amount of $ 1,440,000,000 USD to construct and operate 12, 70 million gallons, fuel grade ethanol plants. Each plant will cost of $120M USD to build. The allocation of these funds, per plant, is described below.





Projected Use of Funds:

Each of the 12 plants we will be constructing will employ the following use of proceeds:



Equipment cost






Fees / license


Plant start-up


Corn inventory





Phases of Funding:

Phase One  Start-up plus First Quarter (First Draw)                      $360,000,000

Included is feasibility study by  The Rutland Group 

Engineering Study by                The Etruscan Group 

Phase Two:  First Year,    2nd Quarter                                          120,000,000

Phase Three: First Year    3rd Quarter                                           120,000,000

Phase Four:   First Year    4th Quarter                                           120,000,000

YEAR ONE TOTAL                                                                $  720,000,000

Phase Five:  Year Two                                                              $ 480,000,000  

Phase Six:     Year Three                                                           $ 240,000,000   


Total  for  Three Years.............................................................$1,440,000,000 



We expect to have all twelve plants in full production within twenty-six months from funding. We will break ground on two (2) ethanol sites immediately upon funding. Construction will begin on five (5) additional sites in the second quarter of 2007. The remaining five (5) sites will start in the third quarter of 2007 for completion September 2008. Our construction plans anticipate that all sites will be fully operation within eleven months from the start of their construction.

Community Impact

All Thomas Energy, LLC plants will be located in the southeastern part of the U.S. Our plan calls for the construction of 12 plants, with each plant providing at least 118 production and support jobs for a total 2,832 jobs. During the construction phase, we estimate approximately 540 jobs will be created at each plant site for a total of 6,480 jobs. Once a plant is operational, we further estimate that an additional 174 local jobs will be created as a result and in the following sectors.















Finance, real estate














Ethanol outperforms its gasoline counterpart in the following areas: lower cost of production, lower cost of acquisition (cheaper to the U.S. consumer) and is better for the environment since ethanol does not emit toxins. Lastly, as ethanol becomes more readily available, it will dampen our dependency on foreign oil imports.

The plant operations are configured by Delta -T of Williamsburg, Virginia; as such all water utilized in the plant will be recycled for use back into the plant. We will capture the carbon dioxide generated during fermentation, compress the gas into liquid format and sell it to a third party; thus, no odors will escape from the plant.

Specific Performance

Projected gross revenue and net profit:



Net Profit













Once funding starts, the company will purchase the land for all proposed twelve sites. As land is acquired, our design engineers will draft the building, rail and utilities layouts. We expect this task to be completed within two months. Equipment configuration will start at the same time and take an additional month to have finished drawings suitable for the quote process to begin. Equipment purchases will be off the shelf rather than a complete design application to save time in overall construction. The first 8 months are allocated the amount of 12 million dollars per month. The last four months are allocated 6 million dollars per month per plant site.

The installation of the rail system will be addressed in the second month after funding in order to have the rail in place to the plant site by the fifth month to receive equipment and supplies. Should the rail system not be completed on time, the total project would be delayed from one to four months. Installation of the metal based buildings and tanks will start in the fourth month and finish completion by the sixth month after funding. Delivery and installation of the fermentation equipment will follow thereafter. We expect that at the end on the ninth month

83% of all the equipment will be paid and delivered and 70% of said equipment installed. As the equipment is installed, each system will be tested and fine-tuned thereby saving considerable time at the start up phase of the construction process.

The eleventh month reflects the ethanol start-up phase of the first plant whereas the employees are trained for their position reflecting the completion of the ethanol plant. We anticipate that the plant will be producing at 100% capacity after two (2) months of employee training.

Increased Market Share

In order to continuously and significantly increase our market share, the company's goal (with the approval of its members) is to leverage the first four (4) years of profits to develop up-to an additional 24 ethanol production sites over the following four (4) to five (5) years. As a result, the company would own and operate up-to a total of 36 fuel grade ethanol plants thereby dominating the Ethanol production landscape. The construction of each of these additional plants would be financed from profits from the first two (2) existing plants (71M USD profit per site per year) with 60M USD allocated to plant development and 11M USD payable to the Company's members.

Per Site Projected Financials

The following table shows projected financials for one (1) site in full production for one (1) year. Please note: the data below is based on the sale price of ethanol (E85) fuel at $2.34 gallon and the purchase price of corn at $2.39 bu. Also, the profit returns by each site is dependent upon the sale price of ethanol to the consumer.

Sales Revenue


Less of Cost of Corn


Less Processing Cost


Profit per plant







Exit Strategy

As a major supplier of fuel grade ethanol, the sale of our operation at a given multiplier would be eagerly awaited in the tenth year either by a petroleum producer or a blender / distributor. The buyer will have a given production level to work with and plant production strategically placed in the southeast to service his marketing area.

Supporting Documents

A full business plan, financial pro forma, and technical research information are available.


Thomas Energy, LLC is poised to capture a fairly sizeable and untapped portion of the U.S. ethanol marketplace. By building 12 strategically placed ethanol plants in the southeastern U.S., a market in great need of alternative and cheaper fuel, we significantly lower our production and distribution costs compared to current producers, thereby leading to more competitive prices for the consumer and higher profits for the Company. Moreover, by leveraging the profits from these plants to construct up-to an additional 24 plants, we assure ourselves and our investors a significant return on investment for years to come.

Thank you for considering Thomas Energy, LLC..