The Joint Venture company includes Vega Biofuels and Virginia based Laoc, Inc., a newly formed company owned by Bio-Coal manufacturer, Doug Vance. The Joint Venture will operate under the name of LV, Inc. and will operate from Laoc's facility in Richlands, VA.
Vega Biofuels recently entered into an Agreement with Colorado based Vencor International, Inc. to manufacture the Company's Bio-Coal energy product on an exclusive basis. Vencor International has since ceased operations prompting Vega to go directly to Mr. Vance for production of its Bio-Coal product. The two companies have been working together recently to meet the requirements of Vega's clients and testing of the torrefied wood product exceeded the requirements to be called Bio-Coal.
Manufactured from timber waste using torrefaction technology, Bio-Coal has a high energy density of up to 13,000 BTUs/Lb and is considered a renewable energy fuel that meets the Renewable Portfolio Standards and Renewable Energy Credits (RECs) in the United States.
"We have tremendous interest in our Bio-Coal product from all over the world. However, our plan for the JV is to focus on the domestic market initially," stated Michael K. Molen, Chairman/CEO of Vega Biofuels, Inc. "We are very happy to be working with Doug Vance and his team. The situation with Vencor put us behind in our production and testing. It makes much more sense for us to work directly with the manufacturer. As a result of President Obama's plan to cut carbon pollution in the US by reducing carbon dioxide emissions created by coal-fired power plants, we have the opportunity to build our business domestically. We will continue to market our product to clients in Europe and Asia but our primary focus is now on the market here at home. All product produced by the JV will be shipped directly to our clients under the private label of Vega Biofuels. I want to thank our shareholders for their patience while we worked through these issues. Things should move much faster for the Company now. Vega's $25,000 deposit currently held by Mr. Vance will be applied to the business of the JV. We are hopeful that this move will help facilitate our desire to move up to the OTCQB. We are also in the process of assuming some of the other Agreements that Vencor had in place. We will have further announcements concerning these matters as we move forward."
Both Vega Biofuels and Laoc, Inc. will market products manufactured by the JV. Profits derived from the JV will be shared equally between the parties. Vega will be responsible for all decisions associated with marketing the products of the JV and Laoc, Inc. will be responsible for all decisions associated with production of the JV's products.
"This is a great deal for us," stated Doug Vance, President of Laoc, Inc. "Vega provides the marketing arm for the products that we manufacture. We've had a good relationship with Mr. Molen for quite a while now and it makes much more sense for our two companies to work together."
In order to finance the new venture, Vega Biofuels has undergone a reorganization of its securities and is planning a Private Placement of its common shares.