Petrobras Biocombustivel Invests $239 Million in Sugarcane Company

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Researched by Industrial Info Resources (Sugar Land, Texas)--Brazilian oil company Petroleo Brasileiro SA (NYSE:PBR) (Petrobras) (Rio de Janeiro) has announced another major move into the sugarcane-based ethanol industry through wholly owned subsidiary Petrobras Biocombustivel (Rio de Janeiro).

On June 21, the company released details regarding Nova Fronteira Bioenergia SA (Quirinopolis, Brazil), a joint venture with Sao Matinho SA (SAO:SMTO3) (Pradopolis, Brazil). Petrobras' president, Jose Sergio Gabrielli, said that the company should be the second- or third-largest ethanol producer in the country by 2014. For more details, see related June 8, 2010, article - Brazilian Company Petrobras Invests $2.8 Billion in Biofuels.

One of the assets of the new company is the already operating Usina Boa Vista SA ethanol plant in Quirinopolis, which has a sugarcane-processing capacity of 2.5 million tons per harvest. A greenfield project, SMBJ Agroindustrial SA, is also part of Nova Fronteira Bioenergia. The plant will be built in the city of Bom Jesus de Goias. Both are located in the state of Goias. Sao Martinho holds 51% of Nova Fronteira, while Petrobras Biocombustivel owns the remaining 49%.

Sao Martinho SA is one of the biggest sugar producers in Brazil. In addition to Usina Boa Vista and SMBJ Agroindustrial, the company owns and operates sugarcane facilities in Pradopolis and Iracemapolis.

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