Ethanol leader: ETH acquires Brenco
In Brazil, ETH Bioenergia, part of the Odebrecht group, is to acquire one of its smaller rivals, Brenco, creating one of the world’s largest ethanol producers.
Brazilian construction and petrochemical giant Odebrecht and Japanese group Sojitz are the current shareholders in ETH and will own 65% of the new company. Brenco will own the remaining 35%.
ETH has invested $1.27 billion (€0.9 billion) since its start up in 2007, while Brenco invested $470 million. But the partners have committed to invest an additional $364 million before the transaction, scheduled for April, is completed.
Under the leadership of ETH’s CEO José Carlos Grubisich, the company will invest an additional $1.9 billion by 2012. At that time, the merger’s nine mills will be in operation generating $2.2 billion in revenue.
Those investments will enable the merger company to crush 40 million tons of cane per harvest in nine mills, producing 3 billion gallons of ethanol and generating 2700GW a year of energy from biomass.
Even though the ETH-Brenco merger will create an industry giant, the ethanol production capacity scheduled for 2012 equals that of the current capacity of Cosan, (now in joint venture with Shell), to 2.9 billion gallons, according to data from Bloomberg New Energy Finance.
According to Grubisich, 40% the total investment will come from ETH’s resources and the balance will be borrowed from financial institutions. The company has plans to go public on the Sao Paulo Stock Exchange by the end of 2011.
Despite the all-star team, the financial crisis left the company with cash difficulties. Reluctant to make new contributions, the partners went after new investors. The company almost reached a deal with Petrobras, but ended up signing with ETH.
Brazilian construction and petrochemical giant Odebrecht and Japanese group Sojitz are the current shareholders in ETH and will own 65% of the new company. Brenco will own the remaining 35%.
ETH has invested $1.27 billion (€0.9 billion) since its start up in 2007, while Brenco invested $470 million. But the partners have committed to invest an additional $364 million before the transaction, scheduled for April, is completed.
Under the leadership of ETH’s CEO José Carlos Grubisich, the company will invest an additional $1.9 billion by 2012. At that time, the merger’s nine mills will be in operation generating $2.2 billion in revenue.
Those investments will enable the merger company to crush 40 million tons of cane per harvest in nine mills, producing 3 billion gallons of ethanol and generating 2700GW a year of energy from biomass.
Even though the ETH-Brenco merger will create an industry giant, the ethanol production capacity scheduled for 2012 equals that of the current capacity of Cosan, (now in joint venture with Shell), to 2.9 billion gallons, according to data from Bloomberg New Energy Finance.
According to Grubisich, 40% the total investment will come from ETH’s resources and the balance will be borrowed from financial institutions. The company has plans to go public on the Sao Paulo Stock Exchange by the end of 2011.
Despite the all-star team, the financial crisis left the company with cash difficulties. Reluctant to make new contributions, the partners went after new investors. The company almost reached a deal with Petrobras, but ended up signing with ETH.
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