Pavel Molchanov: Okay. Maybe in terms of what you guys can control, and I’ve asked you this question before multiple times. Are you seeing any opportunistic M&A kind of potential in terms of getting our capacity expanded through some asset acquisitions?
Stuart Rose: Not currently. We have in the past, and we’ve tried hard to get them. But currently, we — I don’t — I have not seen anything. In fact, I think people are doing better now and the best time to buy a company at the prices we want to pay, when things aren’t so good, and things in the industry has certainly become much better in the last couple of months. So, I think, our attention properly is on carbon capture and maybe other uses of our — we have three potential carbon capture projects. One of them, we hope to be ready pretty quick in the next couple of years, but we have two others that we’ve applied with the EPA. I think our potential of growth is to find uses for those carbon capture projects, whether it’s our own uses or taking someone else’s carbon in, and that’s probably more than mergers of other ethanol companies. I think that is probably a better focus of our time at this point in time.
Zafar Rizvi: I will add that, I think, Pavel, if you look at it, originally, the ethanol facility was 100 million gallon and we have grown that our consumption from 250 million the both location from 100 million to 150 million. Now we are growing organically from 150 million to 200 million. So we certainly are growing our ethanol production over the year. And then the most important thing is we know these plants. We know how the — what corns of availability from that area. And we think it’s much better to grow organically than acquisition of some other location and find out that location was not as good as we had our own plants.
Jordan Levy: Got it. Thanks very much guys.
Stuart Rose: Thank you, Pavel.
Operator: Our next question comes from Chris Sakai with Singular Research. Please proceed.
Chris Sakai: Yes. Hi. Can you talk about…
Stuart Rose: Hi, Chris.
Chris Sakai: Yes, the price of natural gas and how that’s affecting your profitability?
Zafar Rizvi: I think the natural gas price has considerably dropped over the — last year, at this time, it was trading close to $6 to $7. Now it’s about $4, and $3 or less. Suddenly, it’s a major impact on P&L because that’s the second highest expense we have. So certainly is helping and we believe that this will continue at least this year. The natural price will continue to be same or a little bit better, but we cannot predict what happened in the winter season in January, February, March and that depends a little bit different situation can be. But through December, we feel much better, the prices will stay same or a little close to the pricing which we have now.
Chris Sakai: Have you [indiscernible] thought about potentially hedging this price and locking in these prices for the future?
Zafar Rizvi: We do consider that it is the lowest price we consider, we do buy those prices — those consumption for our ethanol facilities. We do not leave everything open. But certainly, January, February, March, we look at it, see if it’s feasible at this stage or not. But through December, we have purchased some of those natural gas throughout the year.
Chris Sakai: Okay, sounds good. And then can you talk about demand for ethanol globally, which countries are demanding it more?
Zafar Rizvi: I think that ethanol demand is basically continuously Canada is on the top of the list. We have seen the last year — last month, the Netherlands and UK, South Korea and Peru. These are the top five countries, which is importing from U.S. But certainly, the demand ethanol export has dropped, as I mentioned previously.
Chris Sakai: Okay. Great. Thanks for the answers.
Stuart Rose: You’re welcome.
Operator: Our next question comes from David Locke with Old Mammoth Investments. Please proceed.
David Locke: Good morning, gentlemen. How are you today?
Stuart Rose: Good morning.
David Locke: Good. Thanks. Could I ask a quick question about just sort of what do you guys think the cost of new capacity in the industry is in terms of, call it, dollars per gallon of throughput? And then related to that, since it doesn’t seem like there’s any assets trading in the business right now, and you guys have said that you haven’t found anything that you’ve been able to buy. What sort of the ask in terms of what holders of assets want on that same kind of metric?
Stuart Rose: The cost to build would probably be in the $2.5 to $3 a gallon, but that’s just off the cuff estimate. It depends on the project. And we have not — I would think it would cost somewhere in that level to buy a plant if there was even one for sale. I don’t — the advantage of buying a plant versus building one. And I don’t know if anyone building one at that price. The big advantage is that you could be in operation pretty much right away and take advantage, whether it’s through a pipeline or whether it’s through your own carbon capture project, but you could be in business right away to get 45Z credits. So there’s a big advantage if there was something for sale. But in all honesty, everyone in the industry knows all about this. There’s no secrets in the prices. If you were to find something, the price would be pretty high.
David Locke: And in terms of like brownfield expansion, like along the — along the lines of what you guys are doing moving one plant from 150 million to 200 million. Is that a lot less? Or is that sort of similarly high to that $2 kind of range?
Zafar Rizvi: It certainly is — it certainly is less than $2 range because you have already lot of equipment and other loading facility is already there and so many other facilities already exist. So it certainly is less than $2.
David Locke: Okay. And on an unrelated topic, can you guys spend a couple of seconds reflecting on any opportunities in — ethanol to sustainable air fuel, if there’s anything that you guys might do there at some points or in general, just if sustainable air fuel might sort of soak up some ethanol capacity going forward?
Zafar Rizvi: Yes, I think that that’s the one of the other reason which, as you can see, we have expanded our ethanol facility not only to take advantage of 45Z. And then in future, if we have to pivot, we can certainly pivot to SAF. And because every 2 gallon of ethanol produced approximately 1 gallon of SAF. So we have — we have discussion with several other companies who are really — believe they have technologies and they can convert the ethanol to SAF. So we have in discussion with those. We are — certainly try to make sure what exactly is in the market. So that way, if we decided to pivot at the later stage, we certainly will pivot that to SAF. But there is no proven technologies at this time, which can we feel comfortable and we’ll let other people to experiment. And once we know this is successful, we certainly will get into it.
