Brazilian Sugar and Ethanol Industry Sees Unprecedented Growth

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The acquisition of a Brazilian ethanol and sugar company by an Indian group and the merger of two Brazilian companies are two examples of the growing sugarcane-based sugar, ethanol and power industry. Giant companies are being formed almost every month in Brazil, and get to own and operate up to 10 of the existing processing plants, making millions in investments to produce sugar, fuel ethanol and electric power out of the cultivation of sugarcane.

Shree Renuka Sugars Limited (BOM:532670) (Mumbai), one of the largest Indian sugarcane processing companies, has signed a definitive agreement to acquire a major stake in the sugar and ethanol companies of the Brazilian company Grupo Equipav (Campinas). The investment to be made by the Indian company reaches $335 million. Shree Renuka will own a 50.79% stake of Equipav S/A - Acucar e Alcool (Promissao) and Biopav S/A Acucar e Alcool (Brejo Alegre), both of which are in the state of Sao Paulo. The two plants have a combined sugarcane processing capacity of 10.5 million tons per year, and produce fuel ethanol, sugar and power.

This is not the first acquisition in Brazil by the Indian company. Last year, in November, Shree Renuka acquired 100% of Vale do Ivai S.A. Acucar e Alcool (Sao Pedro do Ivai), which owns and operates three sugarcane processing facilities and logistic assets, including sugar and ethanol storage and loading terminals. The production plants are in the cities of Sao Pedro do Ivai, Marialva and Fronteira, in the states of Parana and Minas Gerais. For more details, view November 19, 2009, article - India's Shree Renuka Sugars Acquires Brazilian Producer Vale do Ivai.

On the other hand, ETH Bioenergia S.A. (Sao Paulo) and Brenco-Companhia Brasileira de Energia Renovavel (Sao Paulo) combined their assets to create one of the biggest sugarcane processing companies. ETH Bioenergia is owned by Japanese company Sojitz Corporation (TYO:2768) (Tokyo) (33%) and by the Brazilian engineering and construction company Odebrecht S.A. (Salvador) (67%). They will keep a 65% stake in the new company, while Brenco owners will have the remaining 35%. The new company, which will keep the name of ETH Bioenergia, will have a milling capacity of 40 million tons of sugarcane per year and will produce 3 billion liters of fuel ethanol by 2012 in nine production facilities, located in the cities of Teodoro Sampaio, Mirante do Paranapanema, Cacu, Rio Brilhante, Nova Alvorada do Sul, Mineiros, Costa Rica, Perolandia, and Alto Taquari. The new company plans to take all nine plants to maximum production capacity during the next few years.

The Brazilian sugarcane-based sugar, power and ethanol industry, composed of more than 430 processing plants, keeps trending toward economic concentration and internationalization. For more details, view January 25, 2010 article - Brazilian Sugar and Ethanol Industry Moves Toward Economic Concentration and Internationalization.

View Plant Profiles - 1090532 1088869 1087946 1079651 1083557 1079524 1089517 1087855 1084188 1082894 1079906 1079914 1079913 1079889

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.