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Telecom supplier Telamon hopes to 'ignite' racing industry

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Carmel-based Telamon Corp. rose to become one of the largest minority-owned businesses in the metropolitan area largely by serving telecommunications giants.

Now the company founded in 1985 by Taiwanese native Albert Chen is veering off its traditional course to supply racing teams with an ethanol-based fuel made from corn grown in Indiana.

Telamon began marketing the fuel, dubbed Ignite, in September to sprint and midget car teams that run on the dirt tracks so prevalent throughout the Midwest. The company has yet to secure any commitments or contracts, but executives think it’s just a matter of time before that happens.

Reggie Henderson, former executive director of the Indiana Minority Supplier Development Council, is spearheading the effort as president of Telamon subsidiary National Biofuels Distribution LLC.

“We’re offering, particularly smaller racers and racers on a budget, the same octane [available in other racing fuels] but with a 100-percent American-made product made with Indiana corn,” Henderson said.

Henderson is the biofuels unit's sole employee but is receiving assistance with purchasing and accounting tasks from Telamon workers and—perhaps most important—backing from Chen.

While the plunge into alternative fuels may seem like a stretch for Telamon, Chen said his interest in "green" issues led him to endorse the idea introduced by Henderson.

“I thought, ‘yeah, why not,'” he recalled. “What a great opportunity to support a local producer.”

As a distributor, National Biofuels purchases its fuel from Central Indiana Ethanol LLC in Marion and will ship it directly to a racer’s address. Most racing fuels are sold in 55-gallon drums.

National Biofuels formally launched in September 2008 to provide municipal and government fleets with traditional E85 gasoline. Its clients include the city of Anderson, the Indiana Department of Administration and Vincennes University.

E85, which is 85-percent ethanol and 15-percent gasoline, is cheaper than traditional gas and can be used in nearly 8 million flex-fuel vehicles on U.S. roads today. Indiana has about 120 pumps—tied for third most with Iowa and Wisconsin.

But the racing fuel National Biofuels is marketing is blended with a higher ethanol content and burns even cleaner than the E85 used in average vehicles. Perhaps most important, its formula is cheaper than similar fuels produced by larger competitors.

Philadelphia-based Sunoco Inc., for instance, sells its Turbo Blue racing fuel for about $7 to $9 a gallon. National Biofuels is pricing its product at about $5 a gallon, Henderson said. He declined to divulge revenue projections for the company. And Chen acknowledged that the company is unlikely to become a big moneymaker, unlike its parent Telamon, which posted $468 million in revenue in 2008.

Besides sprint and midget car teams, National Biofuels also plans to target the operators of monster trucks and high-performance tractors that participate in tractor pulls.

“A lot of those racers have roots in agriculture,” Henderson said, “so we think it’s a good fit.”

National Biofuels is a member of the Indiana Motorsports Association and is marketing its product through the association. Tom Weisenbach, executive director of the trade group, has given Henderson some guidance and thinks his venture has potential.

“There are obviously some big brand names out there, but they serve a very small scope of the racing industry in the United States,” Weisenbach said. “Considering Indiana has 49 active race tracks, it makes sense for an Indiana-based company to try to take this on.”

Most racing fuels, including National Biofuels’, contain an octane level of 108, which is much higher than the 91 octane found in premium, petroleum-based gasoline. But selecting what brand of fuel to use in a race car sometimes is beyond the control of a driver or owner.

The sanctioning body of a racing league or racetrack might require the use of just one brand, Weisenbach said, which could make it more difficult for National Biofuels to crack the market.

Even so, if National Biofuels is pricing its fuel cheaper than competitors, “then the racers and the racetracks will want to look at that,” Weisenbach said.

At the lowest levels of racing, fuel stipulations may not even exist at all. But most cars run on petroleum-based gasoline or methanol. Shane Cottle, a sprint car driver from Kokomo who drives in the United States Auto Club series, prefers methanol. He’s never used ethanol, and doesn’t know a driver who does, but said it might be worth considering.
   
“If they get the prices where they’re competitive and it doesn’t mess up the way the cars run, everybody is always looking for a cheaper alternative,” said Cottle, who won four races this year and finished second 13 times.

A car’s motor would need to be modified in order to accommodate ethanol. Henderson hopes his company can work with a race team to make the switch, to help promote the fuel to others.

Of course, Henderson  would like to see more drivers follow in the footsteps of Mario Clouser, a driver from Bloomington, Ill., who finished second this year in the United Midget Auto Racing Association’s points standings. 

“[Clouser’s] racing and using Illinois-based ethanol,” Henderson said. “We’re hoping Indiana races will start using Indiana ethanol.”

Clouser is pushing UMARA to adopt ethanol as its official fuel. The Indy Racing League did in 2007, but a decision last year to make a Brazilian consortium its ethanol supplier angered Midwestern farmers.

Brazilian ethanol is made from sugar cane but works in automobiles virtually the same as corn-based ethanol.

Mark Walters, biofuels director at the Indiana Corn Marketing Council and Indiana Soybean Alliance, said his members would have preferred the IRL use corn-based ethanol. But he applauded National Biofuels’ efforts to further integrate the fuel into the racing industry.

“Indiana has a great motorsports tradition,” Walters said. “And having Indiana-produced ethanol in racing is great news for anyone interested in biofuels.”

Other than the IRL, the American Le Mans Series is the only other racing league to embrace alternative fuels. NASCAR is exploring the possibility but has put no timetable on adopting another fuel.

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