ADM considers sale of Brazil ethanol asset - report

27 October 2010 16:11  [Source: ICIS news]

US agricultural giant Archer Daniels Midland (ADM) is mulling the sale of a stake it owns in a Brazilian ethanol plant, according to a media report in Brazil on Wednesday.

The potential sale involved a 49% stake ADM has in a sugarcane mill in Limeira do Oeste in Minas Gerais state, said business daily Valor Economico.

Valor did not provide a source for the information and ADM declined to comment on the story.

"ADM does not comment on rumours or speculation," said Roman Blahoski, the company’s media relations manager in the US.

ADM’s investment in the Limeira do Oeste mill resulted from a joint venture the company signed in November 2008 with Brazil’s Cabrera Group, according to information on its website.

The report about the US company’s possible divestment contrasted with news earlier this week that Brazil’s oil giant Petrobras was increasing its own reach in the country’s ethanol sector.

Petrobras on Monday announced an agreement with French group Tereos, which will supply the oil company with 2.2bn litres of ethanol through its Brazilian subsidiary Guarani.

Guarani will deliver the biofuel to Petrobras over a period of four years. The deal is valued at Brazilian reais (R) 2.1bn ($1.2bn).

Petrobras said the agreement was the result of a strategic partnership it signed with Tereos in April, when Petrobras acquired a 46% equity interest in Guarani.

Brazil is the world’s second-largest producer of ethanol after the US.

($1 = R1.70)

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By: William Lemos
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