SAO PAULO, Brazil (Reuters) — Two Brazilian companies plan to build ethanol facilities using corn as raw material, aiming to take advantage of ample supplies of the cereal in the country’s west-central region.
Brazil’s ethanol industry, the world’s second largest behind the United States, is almost entirely based on sugar cane, a raw material usually seen as more efficient than corn. But rising demand for ethanol and successive corn output surpluses could offer opportunities in some regions.
Cerradinho Bioenergia plans to build a corn-based ethanol plant in Goiás state with capacity to produce 230 million litres per year, according to a statement released by the state’s press agency.
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Cerradinho already owns a sugar and ethanol mill in the same location in Goiás. It plans to invest C$108 million in the project.
FS Bioenergia, which opened a large corn-based ethanol plant last year in Lucas do Rio Verde in Mato Grosso state, plans to invest $140 million to double the current production capacity to 530 million litres of ethanol per year.
FS chief executive officer Henrique Ubrig said in a written statement that the results so far have been positive, prompting the decision to expand. U.S.-based Summit Agricultural Group is a shareholder in the project.
Ethanol sales are climbing in Brazil as consumers switch to the fuel in the face of rising gasoline prices. Hydrous ethanol sales, the type used as a gasoline substitute in flex fuel cars, jumped 33 percent in November from a year earlier, according to oil and fuels regulator ANP.
Brazil has also passed legislation setting mandates for fuel distributors to market increasing volumes of ethanol and biodiesel, in a policy designed to increase the use of renewable energy and cut carbon emissions.
