Cargill enters j.v. for sugar, ethanol, electricity

by Jeff Gelski
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SAO PAULO, BRAZIL — Cargill has entered a joint venture with USJ Group, a sugar, ethanol and bioelectricity producer in Brazil. The joint venture will combine industrial assets of the USJ Group in the form of a Sao Francisco mill in operation since 2007 and a Cachoeira Dourada mill under construction and expected to be operational for the 2013 harvest. The joint venture also will inherit sugarcane supply agreements with local producers.

Cargill’s investments in the joint venture will be used to complete construction of the Cachoeira Dourada mill and to upgrade the Sao Francisco mill. The two mills after all the upgrades will have a joint processing capacity of 7.5 million tonnes of sugarcane per year. The mills will produce sugar and ethanol as well as electricity from sugarcane bagasse, a fiber.

“These are two new mills with a competitive scale of production, in an area with up to date farming techniques and fully mechanized harvest,” said Marcelo Andrade, Cargill’s director for the sugar and ethanol business in Brazil.
Cargill and USJ Group each will have a 50% interest in the joint venture. The transaction is subject to regulatory approval but should be concluded within 60 days. Transaction figures were not disclosed.
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