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The acquisition of Appalachian Oil Co. Inc. (APPCO) by diversified holding company Titan Global Holdings brought together two entities committed to offering biofuels to customers, as demonstrated in recent fuel agreements. Titan recently announced that APPCO has reached an agreement with international ethanol manufacturer Tate & Lyle to purchase significantly increased quantities of ethanol at reduced price levels in 2008. Based in London, Tate & Lyle is one of the world's leading manufacturers of renewable food and industrial ingredients.
APPCO, based in Blountville, Tenn., also completed a biofuels supply agreement with Refuel America Inc. Refuel offers domestic, internationally produced and environmentally friendly alternative fuels. Its supply of biofuels to APPCO will complement those of Tate & Lyle, company sources said.
"Our biofuel agreements will fortify our position as a leading renewable energy provider in the southeast United States," said Marty Anderson, APPCO president and CEO. APPCO distributes petroleum products to more than 160 dealers in the Southeast and operates 56 c-store sites. "Additionally, increased access to these biofuels will enhance our sales efforts as we are diligently adding dealer accounts in our existing markets and new markets as well." Anderson said he is proud that APPCO has offered ethanol blended fuels in many of its locations for several years.
Titan considers the agreement to be part of the foundation of its plan to source and distribute biofuels. It also views the supply agreement as a way to significantly advance its efforts to establish secure sources of biofuels as demand for alternative fuels grows.
"We will look to identify and acquire environmentally friendly sites for biofuels sales," said Bryan Chance, Titan CEO and president. "With the APPCO acquisition, we want to assume market leadership in biofuels." Titan plans continued expansion of its biofuels product line and revenues through agreements and acquisitions to enhance core profitability at the wholesale and retail distribution levels, he said.
APPCO has been approved for a grant from the Tennessee Department of Transportation's environmental division as part of the Green Island Biofuel network to offer E85 (ethanol) and B20 (biodiesel) at four stores in Tennessee. The goal of the Green Island Corridor program is to place biofuels stations along Tennessee's interstates and major highways no more than 100 miles apart. Through the state's department of transportation, "competitive funding opportunities" will be offered to retail fuel station owners such as APPCO who are interested in promoting and selling biofuels. Retailers will work in partnership with the state to convert or install fuel storage tanks and dispensing equipment for B20 and E85 for sale to the public.
Anderson is excited about the state grants.
"I look forward to expanding the network of APPCO stores that will offer alternative fuels in addition to the traditional fuels we have always offered," he said. While some industry analysts have predicted a gloomy future for ethanol, based on the current surplus of product, Anderson attributes the surplus to lack of flex cars that can use the fuel and lack of stations that sell E85.
"We decided that somebody had to make the first move in our area in selling E85 and B20," he explained. "While it may not make economic sense for us in the beginning, in the long run we feel we will be ahead of the curve and demand will come for this product." APPCO will be removing kerosene pumps and converting tanks in some locations to offer biofuels while other sites will receive new equipment.
"Ethanol has a bright future and is here to stay," Anderson said. "It was a struggle until recently to get supply, but now there's a glut of ethanol, and it can be bought slightly cheaper. We are locking in some supply at lower prices because we do believe demand will catch up to supply," he said.
"I believe alternative fuels have enormous potential to benefit the communities we operate in by providing economic growth, agricultural opportunity, consumer choice and environmental quality," Anderson said. "Americans gain in freedom and independence when we lessen our dependence on foreign oil."