February 08, 2010
Sugar cane output in Brazil’s Center South, the world’s largest producing region, may be 35 million metric tons in the 2010-11 season, according to Cosan SA Industria & Comercio, the world’s biggest cane processor.
The region may harvest 590 million tons of cane next year, and crush 45 percent of the crop to make sugar, compared with 43 percent last year, Carlos Murilo de Mello, commercial director at Cosan, said in an interview today at a conference in Dubai.
Raw-sugar prices may trade at 26 cents to 30 cents a pound until the country’s new crop arrives, de Mello said. Futures for March delivery lost 5.3 percent to 26.17 cents in New York on Feb. 5, the most since Oct. 9, as the dollar rallied and stocks retreated last week as concern mounted that Greece, Spain and Portugal will struggle to curb their budget deficits.
“The market should remain strong in the next two-three months,” de Mello said. “The market is still constructive despite an increase in risk aversion emanating from the EU situation.”
Brazil’s sugar production may total 35.3 million tons in the 2010-11 season, up 4.4 million tons, as farmers increase planting to gain from record prices, Plinio Nastari, president of the research company Datagro, said at the same conference.
By: Thomas Kutty Abraham
Source: BusinessWeek
Shell, Brazil's Cosan in $12 Billion Ethanol Deal
February 01, 2010
Brazilian sugar and biofuel giant Cosan plans to merge its ethanol and fuel distribution units with Royal Dutch Shell in a deal worth up to $12 billion, extending a trend of growing foreign investment in the fast-growing industry.
The deal, announced on Monday, significantly expands Shell's ethanol operations in Brazil and follows moves by British oil major BP, which in 2008 took a stake in a Brazilian biofuel project and unveiled $1 billion in investments.
Shares of Cosan jumped more than 6 percent in Sao Paulo, while Shell rose nearly 1 percent in London.
"It's a vote of confidence from an oil major for the Brazilian ethanol industry -- one of the most ecological and sustainable alternative fuels," said Jonathan Kingsman, managing director of the Lausanne-based Kingsman SA ethanol and sugar consultancy.
"I expect more interest from the oil companies in Brazilian ethanol, both in production and distribution," Kingsman said.
The deal will extend Cosan's fuel distribution business in Brazil after the company took over U.S.-based Exxon Mobil's Esso unit in 2008 for nearly $1 billion. Cosan last month also agreed to buy a local chain of filling stations called Petrosul for an undisclosed sum.
Oil companies and major global investors have been searching for partnerships in Brazil's ethanol sector, which is still largely dominated by family firms with complex ownership structures.
Shell has been looking for opportunities in Brazil's ethanol industry for years. U.S. agribusiness giant Bunge Ltd struck a deal in December to buy sugar and ethanol producer Moema for $452 million, while French commodities company Louis Dreyfus said in October that it would take over Santelisa Vale for an undisclosed sum.
Cosan said the Shell deal would help it gain greater access to Brazil's thriving ethanol retail market as the combined company would be the country's third-largest fuel distributor, with 4,500 filling stations around the country.
The combined entity will have about 40 billion reais in annual sales, Cosan Chief Financial Officer Marcelo Martins said on a conference call with analysts and investors.
Cosan said it had 180 days to discuss the nonbinding memorandum of understanding exclusively with Shell International Petroleum Company Ltd.
As part of the transaction, Cosan will transfer its sugar, ethanol, fuel distribution and energy generation business to the merged entity, with assets valued at $4.93 billion and debt of $2.52 billion.
Cosan said Shell would contribute its retail fuel and aviation distribution business and inject about $1.63 billion into the merged company in up to two years. Cosan will contribute another $300 million in cash over five years.
Cosan and Shell will have the option of buying each other's stake in the venture after 10 years, with the price to be determined at the time of purchase.
By: Elzio Barreto and Inae Riveras
Source: Reuters
Joint Venture to Source and Sell Bioethanol from Brazilian Sugarcane
January 26, 2010
Greenergy International, which has more that 15 per cent of the road fuel market in the UK, has entered a joint venture with the Bauche Group, the French commodities trader, to source and sell sustainable bioethanol made from Brazilian sugarcane.
According to Greenergy, which expects to supply around half of the UK’s bioethanol this year, traded volumes are likely to exceed 600,000 cubic metres in 2010 and more than double over the next three years.
Much of this increase in demand for bioethanol will be regulation-driven: the UK’s Renewable Transport Fuel Obligation Programme (RTFO) requires that, from this year, five per cent of all fuel sold on UK forecourts comes from a renewable source, while under EU’s Renewable Energy Directive (RED), 10 per cent of all energy used in transport must be renewable by 2020.
The new company, Greenergy Brazil, which is headquartered in Sao Paulo, has been established to meet this increasing demand for bioethanol, while at the same time complying with sustainability and carbon emission standards set down by the RTFO and the RED, the company said.
With the increasing global demand for oil, environmental groups have warned that pressures to increase sugarcane production in Brazil could accelerate deforestation in the Amazon.
Greenergy is keen to point out that since 2007 it has been working with suppliers in Brazil “as part of an ongoing commercial relationship to support them in the implementation of environmental and social sustainability” and has established what it describes as a “gold standard sustainability audit programme” for producers in Brazil.
Greenergy says it has also been working with Bauche Group – which has an established presence in Brazil – for a number of years to establish best practice for suppliers of sustainably sourced and traceable bioethanol for movement into the UK and Europe.
The new joint venture will formalise and expand this collaboration.
“We now have outstanding access to significant volumes of pre-certified product that meets and exceeds RTFO and RED sustainability requirements and are ideally placed to capitalise on growing demand for RED compliant product in Europe,” said Andrew Owens, Greenergy chief executive.
Board director Alexander Bauche added: “Working with Greenergy has enabled us to strengthen our network and to develop the supply infrastructure to guarantee the highest quality sustainable bioethanol from the Brazilian market.
“Greenergy Brazil is the next step in establishing a secure export market and in expanding our trading position.”
By: Peta Hodge
Source: Reuters
The region may harvest 590 million tons of cane next year, and crush 45 percent of the crop to make sugar, compared with 43 percent last year, Carlos Murilo de Mello, commercial director at Cosan, said in an interview today at a conference in Dubai.
Raw-sugar prices may trade at 26 cents to 30 cents a pound until the country’s new crop arrives, de Mello said. Futures for March delivery lost 5.3 percent to 26.17 cents in New York on Feb. 5, the most since Oct. 9, as the dollar rallied and stocks retreated last week as concern mounted that Greece, Spain and Portugal will struggle to curb their budget deficits.
“The market should remain strong in the next two-three months,” de Mello said. “The market is still constructive despite an increase in risk aversion emanating from the EU situation.”
Brazil’s sugar production may total 35.3 million tons in the 2010-11 season, up 4.4 million tons, as farmers increase planting to gain from record prices, Plinio Nastari, president of the research company Datagro, said at the same conference.
By: Thomas Kutty Abraham
Source: BusinessWeek
Shell, Brazil's Cosan in $12 Billion Ethanol Deal
February 01, 2010
Brazilian sugar and biofuel giant Cosan plans to merge its ethanol and fuel distribution units with Royal Dutch Shell in a deal worth up to $12 billion, extending a trend of growing foreign investment in the fast-growing industry.
The deal, announced on Monday, significantly expands Shell's ethanol operations in Brazil and follows moves by British oil major BP, which in 2008 took a stake in a Brazilian biofuel project and unveiled $1 billion in investments.
Shares of Cosan jumped more than 6 percent in Sao Paulo, while Shell rose nearly 1 percent in London.
"It's a vote of confidence from an oil major for the Brazilian ethanol industry -- one of the most ecological and sustainable alternative fuels," said Jonathan Kingsman, managing director of the Lausanne-based Kingsman SA ethanol and sugar consultancy.
"I expect more interest from the oil companies in Brazilian ethanol, both in production and distribution," Kingsman said.
The deal will extend Cosan's fuel distribution business in Brazil after the company took over U.S.-based Exxon Mobil's Esso unit in 2008 for nearly $1 billion. Cosan last month also agreed to buy a local chain of filling stations called Petrosul for an undisclosed sum.
Oil companies and major global investors have been searching for partnerships in Brazil's ethanol sector, which is still largely dominated by family firms with complex ownership structures.
Shell has been looking for opportunities in Brazil's ethanol industry for years. U.S. agribusiness giant Bunge Ltd struck a deal in December to buy sugar and ethanol producer Moema for $452 million, while French commodities company Louis Dreyfus said in October that it would take over Santelisa Vale for an undisclosed sum.
Cosan said the Shell deal would help it gain greater access to Brazil's thriving ethanol retail market as the combined company would be the country's third-largest fuel distributor, with 4,500 filling stations around the country.
The combined entity will have about 40 billion reais in annual sales, Cosan Chief Financial Officer Marcelo Martins said on a conference call with analysts and investors.
Cosan said it had 180 days to discuss the nonbinding memorandum of understanding exclusively with Shell International Petroleum Company Ltd.
As part of the transaction, Cosan will transfer its sugar, ethanol, fuel distribution and energy generation business to the merged entity, with assets valued at $4.93 billion and debt of $2.52 billion.
Cosan said Shell would contribute its retail fuel and aviation distribution business and inject about $1.63 billion into the merged company in up to two years. Cosan will contribute another $300 million in cash over five years.
Cosan and Shell will have the option of buying each other's stake in the venture after 10 years, with the price to be determined at the time of purchase.
By: Elzio Barreto and Inae Riveras
Source: Reuters
Joint Venture to Source and Sell Bioethanol from Brazilian Sugarcane
January 26, 2010
Greenergy International, which has more that 15 per cent of the road fuel market in the UK, has entered a joint venture with the Bauche Group, the French commodities trader, to source and sell sustainable bioethanol made from Brazilian sugarcane.
According to Greenergy, which expects to supply around half of the UK’s bioethanol this year, traded volumes are likely to exceed 600,000 cubic metres in 2010 and more than double over the next three years.
Much of this increase in demand for bioethanol will be regulation-driven: the UK’s Renewable Transport Fuel Obligation Programme (RTFO) requires that, from this year, five per cent of all fuel sold on UK forecourts comes from a renewable source, while under EU’s Renewable Energy Directive (RED), 10 per cent of all energy used in transport must be renewable by 2020.
The new company, Greenergy Brazil, which is headquartered in Sao Paulo, has been established to meet this increasing demand for bioethanol, while at the same time complying with sustainability and carbon emission standards set down by the RTFO and the RED, the company said.
With the increasing global demand for oil, environmental groups have warned that pressures to increase sugarcane production in Brazil could accelerate deforestation in the Amazon.
Greenergy is keen to point out that since 2007 it has been working with suppliers in Brazil “as part of an ongoing commercial relationship to support them in the implementation of environmental and social sustainability” and has established what it describes as a “gold standard sustainability audit programme” for producers in Brazil.
Greenergy says it has also been working with Bauche Group – which has an established presence in Brazil – for a number of years to establish best practice for suppliers of sustainably sourced and traceable bioethanol for movement into the UK and Europe.
The new joint venture will formalise and expand this collaboration.
“We now have outstanding access to significant volumes of pre-certified product that meets and exceeds RTFO and RED sustainability requirements and are ideally placed to capitalise on growing demand for RED compliant product in Europe,” said Andrew Owens, Greenergy chief executive.
Board director Alexander Bauche added: “Working with Greenergy has enabled us to strengthen our network and to develop the supply infrastructure to guarantee the highest quality sustainable bioethanol from the Brazilian market.
“Greenergy Brazil is the next step in establishing a secure export market and in expanding our trading position.”
By: Peta Hodge
Source: Reuters
