MEMS USA, Inc. (MEMS), a California-based professional engineered systems, products and services company, announced that Northern Ontario, Canada, will be the site of Hearst Ethanol One, Inc. ("HEO"), a biomass-to-fuel-ethanol conversion facility targeting annual production of 227 million liters of fuel-grade ethanol.

At least 1.5 million long tons of biomass, or approximately a three-year supply of raw materials, are now on HEO's Ontario site. There is sufficient biomass in place within a 30-kilometer radius of the site to feed the plant at maximum operating capacity for at least 15 years. The site also offers superior rail access, immediate access to the Trans-Canadian Highway, proximity to a major natural gas pipeline, access to electric power and it is located within a large forest area. Fast approvals (zoning, environmental, etc.) and commissioning of this eco-friendly plant are anticipated.

HEO, a Canadian corporation, will design, engineer, build, own, operate and maintain the biomass-to-fuel-ethanol plant. HEO is majority owned by MEMS USA, Inc. and the Canadian company, C. Villeneuve Construction Co. Ltd., which is well known in the forestry and construction industries in Northern Ontario and which exchanged an equity ownership position in HEO as full payment for the Hearst site.

The capital budget for the HEO project is US$150 million. MEMS recently entered into a Memorandum of Understanding with a European funding group to provide the initial equity capital for the development of HEO and other Canadian biomass-to-fuel-ethanol conversion projects. MEMS has now located and is negotiating the acquisition of additional preferred sites for biomass-to-fuel-ethanol conversion projects in Eastern Canada.

The forestry products industries of Eastern Canada continue to produce and have stockpiled large quantities of forest and mill waste biomass that are suitable for conversion to fuel-ethanol. The Province of Ontario is aware of the potential environmental problems associated with storing or incinerating such land-filled biomass wastes. HEO would convert these wastes to ethanol, thus removing the environmental blights while simultaneously making needed biorenewable fuels. As an inducement to use biorenewable ethanol and thereby reduce greenhouse gas emissions resulting from the combustion of fossil fuels, combined Canadian Federal and Ontario Provincial tax incentives for biorenewable ethanol fuel used in Ontario are CN$0.249/liter, or about US$0.80/gallon.