Brazil broods on 3 billion litre a year ethanol project

Brazilian ethanol and sugar groups ETH Bioenergia and Brenco are deliberating a merger which could create one of Brazil's largest bioethanol producers.

The projects combined could yield 3 billion litres of ethanol a year by 2013/14. It would also crush 37 million tonnes of sugarcane annually.

‘Both companies have modern, competitive assets which are headed for a future of clean and renewable energy,’ Jose Carlos Grubisich, executive officer at ETH, the ethanol and sugar subsidiary of construction and petrochemical giant Odebrecht, comments.

Mergers and acquisitions have picked up paced in Brazil's sugar and ethanol sector since the financial crisis crumbled some highly-leveraged mills.

ETH and Brenco have similar growth strategies based on low-cost production clusters. Each has several mills in cane states.

The resulting company would also have capacity to generate 2,500 gigawatt hour/year of electricity burning cane bagasse.

ETH, which inaugurated its first green-field mill in August, has two operating sugar and ethanol plants bought in 2007 and 2008. Another two plants which will come on-stream by the end of the month.

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