Glencore Could Acquire 70% of Rio Vermelho Sugarcane Ethanol Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--The commodities company Glencore International AG (Baar, Switzerland) could acquire a 70% stake of the ethanol plant owned by the producer Rio Vermelho Acucar e Alcool Ltda. (Junqueiropolis, Brazil). Even though Glencore has been participating in the world sugar trade for years, this would be the first time the company entered the growing Brazilian sugarcane industry.

The Rio Vermelho sugarcane-processing plant was inaugurated in 2007. Production processes focus on fuel ethanol for the domestic market. Like many sugarcane-based ethanol distilleries, the Junqueiropolis facility will probably install a sugar production factory and cogeneration units after an injection of capital by Glencore. The transaction is valued at about $80 million.

The current processing capacity of the plant is 1.2 million tons of sugarcane per harvest campaign, which goes from March to December. The plant is in the Sao Paulo state, where more than 50% of the Brazilian ethanol and sugar facilities are located.

Glencore's entry to the Brazilian sugarcane market is another example of the internationalization process this sector is undergoing. For more details, view related January 25, 2010 article - Brazilian Sugar and Ethanol Industry Moves Toward Economic Concentration and Internationalization.

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