FS Bioenergia, a JV between Brazilian and US-based investors, is building its second corn-based ethanol plant in Brazil’s top grains-producing state of Mato Grosso. FS Bioenergia said it will spend 1 billion reais ($308 million) on the project.
This is the first venture to build a 100% corn-based ethanol plant in Brazil, where currently all ethanol is made from sugar cane. The announcement reinforces an investment trend in Brazil’s centre-west region toward corn-based ethanol production capacity, as investors are attracted by low corn prices and rising demand for ethanol.
FS Bioenergia is owned by privately-held Brazilian firm Tapajós Participações SA and US-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 is following the same strategy and chose the municipality of Sorriso, in northern Mato Grosso, which is also a large grains-producing region. The Sorriso plant will be larger than the first one in Lucas do Rio Verde. The investors project an annual production of 680 million litres 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.
“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.
Brazil’s Agriculture Minister Blairo Maggi has encouraged that type of investment in the centre-west region, saying it would provide the demand it needs for its growing corn production. The government has subsidized the transportation of corn from centre-west states to markets in other parts of the country as a way to support prices and help farmers.