AFTC: Quenching Korean Fuel Demand

After last week announcing the completion of a contract worth more than $1 million with Volvo AB, Alternative Fuel Technologies Inc. (OTCPK: AFTC) is back with more big news today, a purchase order from a Korean customer for four of its DME fuel pump products.

Given the fact that Korea is completely and utterly reliant on Middle Eastern fossil fuels, this could be the beginning of a very lucrative relationship for AFTC, and potentially make them Korea's leading supplier of an effective replacement for traditional fuel systems.

Major Opportunity for DME & AFTC in Korea

With a robust propane distribution infrastructure capable of feeding the country's more than 1 million propane cars, Korea represents an a ideal launching ground for widespread DME fuel adoption. For those of you not in the know, DME can be distributed through pre-existing propane infrastructure. This should help the emerging fuel source overcome one of the main barriers to the widespread adoption of many competing alternative energy sources, including ethanol.

The national government is also taking steps to promote the replacement of conventional fossil fuels with DME and has publicly stated plans to provide 100 tons of the fuel per annum by 2010 and facilitate full-scale use of DME by 2012. Since the emerging fuel source can reportedly be produced at ½ the cost of petroleum fuels when oil is valued at $125 per barrel, both DME and AFTC’s technology are extremely compelling propositions in today’s rough and tumble economic environment.

What is DME?

Dimethyl either or DME is a colorless liquid that can be produced from natural gas, coal, or biomass and can be used as a clean-burning alternative to liquefied petroleum gas, liquefied natural gas, diesel, and gasoline.

Advantages of DME include but are not limited to:

- Non toxic to humans and non damaging to the environment;
- Low CO2 and 90% less NOx emissions than standard automotive fuels;
- Biodegradable and non-corrosive;
- 30% higher fuel economy than gasoline in passenger cars;
- Easily transported and distributed via pre-existing propane infrastructure;
- Can be up to 5X more efficient than traditional fuels.
- Comparable torque and power for DME and Diesel operation
- 75% particulate emissions vs. diesel
- Proven to allow compression engines to meet ’98 California LEV standard without addition of expensive systems; and
- Low engine noise

Going to Cash Could Cost You

Despite a major market rally on Monday, investors still have their collective finger on the sell button waiting anxiously to move their assets quickly to cash if things happen to go south in a hurry again. However, most of the research that I've come across lately indicates that heading for 'greener' pastures is not historically as profitable a decision as holding tight and weathering the storm.

According to a recent New York Times article that examines a 2005 study conducted by the University of Michigan, "From 1963 to 2004, the index of American stocks tested gained 10.84 percent annually in a geometric average, which avoided overstating the true performance. For people who missed the 90 biggest-gaining days in that period, however, the annual return fell to just 3.2 percent. Less than 1 percent of the trading days accounted for 96 percent of the market gains."

Timing is Everything

Timing is everything folks, and most investors like ourselves never seem to end up getting back in before the market bounces back. Unless the world disintegrates over the next 5-10 years, a major market rebound is inevitable. Since there indeed is not much upside potential in cash today other than short-term safety, if you have the money, I suggest looking long and hard for value in today's bargain basement environment.

Business looks to be progressing nicely for AFTC.PK even as the global economy screeched to a halt. An indication of what the future holds for the company? Despite atrocious market conditions these past few weeks, AFTC continues to impress with positive corporate developments.

With aspirations of becoming the global leader in DME fuel system development and a growing global customer base that includes automotive market leaders such as Volvo AB, AFTC.PK is showing a great deal of promise heading into '09. Check the OutcastTrader Blog periodically for updated coverage on this and other companies that stand to forever revolutionize our perception of fuel and energy.