The groundbreaking puts Southridge on track to complete plant construction by early 2009. The company further stated that it expects to begin construction, which should take approximately 12 months, within the next thirty days.
First phase will have the capacity to dry up to 15MMGY of hydrous ethanol to be imported into the United States. The second phase would be to build the plant capable of producing 5MMGY of ethanol using sugar cane as feedstock. Having the capability to use feedstock grown and cut straight on land owned by the Company will give it a huge advantage.
Bagasse, the fibrous material that remains from sugar cane, will be burned as fuel and cut down our energy costs by 60%. Lower energy and feedstock costs will bring our profits to record highs in the industry. CEO, Ken Milken commented, "This groundbreaking represents an important step in our mission to accelerate the commercial adoption of renewable energy such as ethanol."
Southridge plans to export ethanol from Brazil and import it into the United States via its facility in El Salvador where the company can take advantage of the Caribbean Basins Initiative (CBI), a trade agreement signed in 2000 that allows Caribbean and Central American countries to export ethanol into the United States duty-free.
The new site in El Salvador is located in close proximity to a river making it easily accessible to transport product to an ocean local port for transport to the United States. The site has 25,000 mz (approx. 4,500 acres) of land and access to abundant sugar cane production capacity. With an average yield of 30 to 40 tons per acre grown on site, the location will be more than capable of supplying the 5 million gallon per year production plant.
Southridge is very encouraged by this strategic new facility in El Salvador as it will allow the Company to become one of the lowest cost producers in the industry through the benefits of export incentives and supply of its own raw materials. This comparative advantage of vertical integration and production diversification will act as a hedge against rising costs and will ensure the stability of future production levels.