Joint venture plans five plants, with R$2.5bn for the first project in Mato Grosso.
Brazil’s largest corn ethanol producer, Inpasa, and corn producer and commodity firm Amaggi have announced the creation of a joint venture to build at least five corn ethanol plants in the country. Valor has learned that the first investment is expected to be R$2.5 billion in Rondonópolis (Mato Grosso).
This is projected to be the average cost per plant, each with an initial capacity to process 2 million tonnes of corn per year. If the plan proceeds as expected, the joint venture will invest at least R$12 billion in the sector.
For the first project, the funds are expected to come exclusively from the companies’ cash reserves, without resorting to external financing, according to a source close to both firms.
Of the five planned plants, at least three are expected to be located in Mato Grosso, in Querência and Campo Novo do Parecis, the same municipalities where FS—the country’s second-largest corn ethanol producer—operates its facilities. The joint venture will evaluate locations for the other two units, with municipalities in Tocantins, Goiás, and São Paulo under consideration, according to the source.
The partnership with Inpasa is Amaggi’s chosen route to enter the corn ethanol market after missing the first wave of investments in the segment. To do so, it partnered with a company that already has operational and financial expertise in the business. Inpasa currently operates seven corn ethanol plants across the states of Mato Grosso, Mato Grosso do Sul, and Maranhão, plus Paraguay.
Although Amaggi is a major corn producer, it is not expected to be the sole supplier for the plants, according to the same source. The company already operates eucalyptus plantations, which could be used to fuel the boilers at the energy generation units. Inpasa is still developing its first biomass projects.
For Amaggi, the partnership with Inpasa marks its second step in the biofuels sector. The company already produces biodiesel at a unit adjacent to its soybean crushing plant in Lucas do Rio Verde (Mato Grosso).
In a statement, Amaggi said, “The creation of the new company is subject to approval by Brazilian antitrust authorities, in accordance with current legislation, and will be formalized once these formalities are completed.”
Source: Valor International
