Cargill enters Brazilian sugarcane venture

by Eric Schroeder
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SAO PAULO, BRAZIL — Cargill and Grupo USJ have entered a joint venture to establish SJC Bioenergia. The cane crushing venture includes Grupo USJ’s São Francisco mill, in operation since 2007 in Quirinópolis, Brazil, and the Cachoeira Dourada mill, which is under construction in the same municipality. Combined, the two mills will have capacity to process up to 7.5 million tonnes of sugarcane in 2013.

Under terms of the partnership, Cargill and Grupo USJ will share 50/50 ownership of SJC Bioenergia. The new company will take on sugarcane supply agreements held with local farmers who supply Grupo USJ’s two mills. In addition to sugar and ethanol, SJC Bioenergia will generate electricity from sugarcane bagasse. One third of this power will supply all company needs and two thirds will be sold to the national grid, Cargill said.

According to Cargill, the two mills process 5 million tonnes of sugarcane, which in turn produce 170 million liters of ethanol and 420,000 tons of sugar every harvest, in addition to 350,000 MW of energy every year. Once the company crushes 7.5 million tonnes of sugarcane in 2013-2014, it will be able to produce an additional 200 million liters of ethanol and another 200,000 MW of electricity, Cargill said.

“Our plans to expand the Cachoeira Dourada and São Francisco mills in the following years will enable us to double crushing capacity to 15 million metric tons of sugarcane,” said Ingo Kalder, director in charge of SJC Bioenergia. “We will do this by adding modules of 2.5 million metric tons every two years. This will place SJC Bioenergia among the largest producers of sugar and ethanol in Brazil.”

Cargill already has equity interest in Cevasa, a mill based in Patrocínio Paulista, Brazil, that recently doubled its sugarcane processing capacity to 3 million tonnes per year and now also produces sugar.

“The two SJC mills in Goiás have synergies, competitive economies of scale, and are designed for easy and fast expansion,” said Marcelo Andrade, director of Cargill’s sugar and ethanol business in Brazil. “We are also considering the possibility of producing other products in the region, based on new technologies. The region features fully mechanized planting and harvesting, and its farmers are committed to developing this industry.”
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