Brazil ethanol sector consolidation to continue - FO Licht

23 March 2010 22:59  [Source: ICIS news]

SAO PAULO (ICIS new)--Brazil's ethanol sector will continue to consolidate in the coming years and the industry will likely be dominated by heavily capitalised, multinational groups, an FO Licht official said on Tuesday.

Brazil's ethanol sector saw some 60 deals in the past year, involving some 100 sugarcane mill, said FO Licht's managing director Christoph Berg during the Sugar and Ethanol Brazil 2010 in Sao Paulo.

“The sector is no longer dominated by [local] family-run groups,” he told delegates.

Berg said a joint venture announced by Shell and Brazil's ethanol heavyweight Cosan in February is an example of the new face of the Brazilian industry.

The two companies last month signed a memorandum of understanding to form a $12bn (€8.9bn) joint venture for the production of ethanol, sugar and electricity.

The deal is likely to trigger more competition from other oil companies, which do not want be left behind in the biofuels race, a market participant said on the sidelines of the conference.

Shell is the third oil major to invest in the Brazilian ethanol sector, along with BP and Brazil's state-run Petrobras.

The 2010 Sugar and Ethanol Brazil conference opened on Tuesday. The two-day event was organised in partnership with IBC Brasil.

For more on ethanol, visit ICIS chemical intelligence
To discuss issues facing the chemical industry, go to ICIS connect

By: William Lemos
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly