SOURCE: TexCom, Inc.

June 18, 2009 11:34 ET

TexCom Announces Progress on Its Paraguay Oilseed Crushing Project

HOUSTON, TX--(Marketwire - June 18, 2009) - TexCom, Inc. (PINKSHEETS: TEXC), a Houston, Texas-based company, announced that its biodiesel division, Biodiesel International Corporation (BIC), has made significant progress on its Paraguay Project.

The Paraguay project is a direct result of TexCom's timely exit from its Seabrook Biodiesel facility in 2007. TexCom was the principal party in the development of a 35 million gallon biodiesel production facility. After TexCom conceived, planned, initiated design and development and raised funding for the project, management elected to exit the project and sold its interest for $3.1 million.

Having seen the margin compression challenges that non-vertically integrated biodiesel producers experienced, TexCom management sought an opportunity to position the company upstream into oilseed crushing. An opportunity was identified in Paraguay which will position TexCom upstream into oilseed processing and allow it to control a greater portion of the grain to biodiesel value chain. This move would position TexCom to provide oilseed crushing in an ideal location and allow it to create value downstream into oilseed meal sales, soy, sunflower and canola oil sales, and biodiesel production. The expected profit potential from crush margins and sale of meal (protein) into the livestock feed and human consumption markets will provide a measure of insulation from the price swings between retail biodiesel prices and vegetable oil prices that have challenged U.S. biodiesel producers over the past 4 years.

Additionally, TexCom is developing a position for itself for investment in non-food biodiesel feedstock crops such as Jatropha that are ideal for the climate and land in Paraguay. Through this integration, a combined grain crushing and biodiesel facility can be established to meet the needs of the existing agricultural complex and foster new agricultural initiatives into non-food oilseed crops to create fuel for Paraguay, South America and the world.

TexCom has invested approximately $1.2 million to bring the project to its current status. An additional $1,000,000 in capital will be spent to complete the development phase of the project and bring it to the point of final project financing. TexCom is currently in discussions with capital sources to fund the project.


Paraguay, a country of approximately 6.5 million people, is the sixth largest producer and fourth largest exporter of soybeans in the world. Currently, the majority of oilseeds produced in Paraguay are shipped out of the country without further processing. TexCom's facility will provide increased economic benefit to the region through the export of meal and vegetable oil as opposed to lower priced un-crushed oilseeds that may soon be subjected to an export tax. The facility will create construction and permanent operations jobs. TexCom is working directly with farmer's cooperatives in Paraguay to meet their need for crushing capacity within the country.


The facility will ship biodiesel, soybean oil and soy meal by barge from its site on the Parana River, taking advantage of the fully developed existing barge traffic on the river system, delivering products to the ports at Rosario and Buenos Aires. One of the country's primary roadway systems will be utilized to receive soybeans, canola and sunflower produced in the region.

The port facility developed by TexCom may also serve as a port through which Coops can sell excess crop production over and above that needed by TexCom. As well, it will be an ideal receiving point for necessary seed and fertilizer that the farmers import for their crops, thus providing an additional revenue stream for TexCom. Revenue from the core crushing and biodiesel plant is projected at over $500 Million annually at current commodity prices and full capacity operation.

Strategic Location

TexCom has secured a site at Puerto Triunfo on the Parana River for construction of an integrated 4,000 metric ton/day oilseed crushing and 60 Million gallon/year biodiesel plant. The site is near the only major highway in this region that provides easy access to oilseed producers, making it one of the nation's optimum locations for such a facility. The site has year-round river transport access to the port of Buenos Aires and world markets. Approximately half of the raw material requirements for the crusher can be procured from within a 37 mile radius of the site and 100% from within 75 miles.

To date the following milestones have been met:

Feasibility Studies: Independent Feasibility studies and an Environmental Impact Assessment for the planned project are complete. Economics for the project are extremely attractive. TexCom has developed excellent relations with both the government and the agricultural community in Paraguay, resulting in strong local interest and support.

Plant Technology: Plant technologies have been selected. The crusher will be fabricated in South America using proven design technology. Candidates to serve as the general contractor for the overall project have been identified.

Preliminary Engineering: A Houston engineering firm is conducting the preliminary engineering for the entire facility. The preliminary engineering work and capital cost estimate are near completion.

Availability and Sourcing of Feedstock: A detailed analysis has been completed by an agronomist and consultant in Asuncion retained by BIC. The report includes data on annual production volumes of grains by individual farm cooperatives. Discussions regarding supply contracts have been held with farm cooperatives in Paraguay since the outset of planning. The benefit that this strategically located crusher and port will provide to the cooperatives is significant, reducing farmer's costs for delivery of product to market.

Construction and Operating Arrangements: Construction will be under the terms of a lump sum, turnkey EPC Contract with the General Contractor, containing usual provisions for process and product guarantees, completion schedules, etc. Local sub-contractors have also been identified.

Environmental Approvals: GeoMap, S.A. (Asuncion) has conducted a fully detailed Environmental Impact Assessment, including identification of approvals and procedures for applications. Final completion awaits review of the process description to be provided in the Technical Feasibility Report and Preliminary Engineering Package.

Initial Financial Plan: TexCom is in discussion with sources of equity and senior debt on a project financing basis. Additionally, TexCom has spoken with officials from the International Finance Corporation, a division of the World Bank. The company has relationships from its prior biodiesel plant that it will utilize for off-take agreements to assist in obtaining financing for the operation.

About TexCom, Inc.

TexCom, Inc. is headquartered in Houston, Texas and is an early-stage, growth-oriented company with its primary focus on the production of biodiesel. Domestically, TexCom is in disposal of non-hazardous of fluids generated in the oil and gas exploration and is expanding its interests in liquid waste disposal serving the oil & gas and petrochemical industries.

Forward-Looking Statements

Statements contained herein and the information incorporated by reference herein may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, "may," "will," "expect," "anticipate," "estimate," "would be," "believe," or "continue" or the negative or other variations of comparable terminology. We intend such forward-looking statements to be covered by the safe harbor provisions applicable to forward-looking statements contained in Section 21E of the Exchange Act. Such statements (none of which is intended as a guarantee of performance) are subject to certain assumptions, risks and uncertainties, which could cause our actual future results, achievements or transactions to differ materially from those projected or anticipated.

Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance and underlying assumptions and other statements, which are other than statements of historical facts.

These statements are subject to uncertainties and risks including, but not limited to, product and service demands and acceptance, changes in technology, economic conditions, the impact of competition and pricing, and government regulation and approvals. TexCom cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those TexCom expects include changes in soybean, canola and crude oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as our ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business.

Our expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, including without limitation, our examination of historical operating trends, data contained in our records and other data available from third parties. There can be no assurance, however, that our expectations, beliefs or projections will result, be achieved, or be accomplished. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no duty to update these forward-looking statements.

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