The São Martinho Group – one of the largest sugar and ethanol groups in Brazil – and Petrobras Biocombustível, which has been producing biofuel since July 2008, have their fingers on the pulse of the Brazilian biofuel industry and see the time is right for expansion.
As a result, the two companies have announced R$520.7 million will be spent through the joint venture, Nova Fronteira Bioenergia S.A., to expand the sugarcane crushing capacity of the Boa Vista mill in the city of Quirinópolis in Goiás to 8 million metric tons as of the 2014/15 harvest year.
“This major project will mark the beginning of a new cycle of investments in ethanol production in Brazil,” said Miguel Rossetto, CEO of Petrobras Biocombustível.
The Boa Vista mill has gradually been increasing its sugarcane crushing capacity since its inauguration in 2008. A total of 2 million metric tons of sugarcane was crushed in the 2010/11 harvest year, which should jump to 2.3 million metric tons during the 2011/12 harvest year.
Of the total investment, R$430.5 million will be allocated to the acquisition of industrial equipment and the remaining R$90.2 million to agricultural equipment. Upon completion of the expansion, slated for 2014, nearly 70% of the mill's production will be supplied by the company's own sugarcane.
“These investments are essential for leveraging our production capacity and, consequently, increasing ethanol supply in the market,” commented Fábio Venturelli, CEO of Nova Fronteira Bioenergia S.A.
Once the expansion programme is complete, Boa Vista will boast an electricity cogeneration capacity of 600,000 MWh, making it the world’s largest mill focused solely on ethanol production. Furthermore, it will generate 3,000 direct and indirect jobs in the Quirinópolis region.
The São Martinho Group is one of the largest sugar and ethanol groups in Brazil, with annual sugarcane crushing capacity of 14 million metric tons. It operates three mills: São Martinho, in Pradópolis (in the Ribeirão Preto region of São Paulo), Iracema, in Iracemápolis (in the Limeira region of São Paulo) and Boa Vista (Quirinópolis, 300 kilometres from Goiânia in Goiás). The group's average harvest mechanization ratio is 87.1%, with this figure reaching 100% at the Boa Vista Mill.
Petrobras Biocombustível, meanwhile, ended 2010 with interests in 10 mills with crushing capacity of 24.5 million metric tons of sugarcane, a production capacity of 942,000 cubic metres of ethanol and exports of 517 GWh of electricity (generated from sugarcane bagasse). The company’s 2011-2015 Business Plan lays out investments of US$1.9 billion in ethanol production in order to reach a production volume of 5.6 billion litres by 2015 (including partnerships) and 12% of the domestic market share.
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