ADM sells sugarcane ethanol operations in Brazil

Archer Daniels Midland (ADM), a US-based global food processing and commodities firm, has struck a deal to dispose of its sole Brazilian ethanol plant, citing a "challenging" environment for the biofuel.

The Minas Gerais distillery, and its sugarcane plantation, which has the capacity to process up to 1.5m tonnes of cane a year, and produce 37,000 gallons of ethanol, will be sold to JFLim Participacoes, subject to regulatory approval.

“We regularly review our asset portfolio to determine how best to maximize shareholder returns, and in this case, we have determined that our sugarcane ethanol operations in Brazil are unlikely to meet our long-term returns objectives,” said Chris Cuddy, president of ADM’s corn processing business unit.

He added: “As our sole sugarcane ethanol operation in Brazil, this asset is too small for ADM to compete effectively in a challenging ethanol environment.”

The transaction is expected to close in the second quarter of 2016. Financial details were not provided.

The company said it was continuing to invest in Brazil, one of the world's most important producers of agricultural products.

While announcing fourth-quarter results in February, ADM  said it had begun a strategic review of its corn ethanol dry mills. The company has three such plants in the US.