Brazil-U.S. venture to build second corn ethanol plant in Mato Grosso

SAO PAULO (Reuters) – FS Bioenergia, a joint venture
between Brazilian and U.S.-based investors, said on Tuesday it
will build its second corn-based ethanol plant in Brazil’s top
grains-producing state of Mato Grosso.

FS Bioenergia, the first venture to build a 100 percent
corn-based ethanol plant in Brazil – where basically all ethanol
is made from sugar cane – said it will spend 1 billion reais
($308 million) on the project.

The announcement reinforces an investment trend in Brazil’s
center-west region toward corn-based ethanol production

capacity, as low corn prices in the area and rising ethanol
demand in the country attract investors.

UNEM, a local association of corn ethanol producers, sees
six new corn-based ethanol projects being developed in the next
two years.

FS Bioenergia is owned by privately held Brazilian firm
Tapajós Participações SA and U.S.-based Summit Agricultural
Group. Last year, the companies opened their first plant,
located in Lucas do Rio Verde, a top soy- and corn-producing
part of Mato Grosso.

For the second project, FS Bioenergia followed the same
strategy and chose the municipality of Sorriso, in northern Mato
Grosso, which is also a large grains-producing region.

“The Sorriso area and Mato Grosso in general are strategic
for us. They will provide the raw material we need to produce
ethanol and (corn) meal with the quality we seek,” FS Bioenergia
Chief Executive Henrique Ubrig said in a statement.

The Sorriso plant will be larger than the first one in Lucas
do Rio Verde. The investors project an annual production of 680

million liters of ethanol, 500,000 tonnes of corn meal and
20,000 tonnes of corn oil. The plant is expected to process 1.8
million tonnes of corn per year.

Brazil’s Agriculture Minister Blairo Maggi has encouraged
that type of investment in the center-west region, saying it
would provide the demand it needs for its growing corn
production.

The government has subsidized the transportation of corn
from center-west states to markets in other parts of the country
as a way to support prices and help farmers.

When the second plant is ready, FS Bioenergia projects that
it will process 3.1 million tonnes of corn per year in Mato
Grosso, which currently produces around 26 million tonnes of the
cereal per crop.

($1 = 3.25 Brazilian reais)

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