Brazil ethanol stimulus a ‘positive sign’ for industry – Bunge CEO

25 April 2013 17:16  [Source: ICIS news]

HOUSTON (ICIS)--Brazil’s planned stimulus package for country’s sugar-ethanol sector is “clearly a positive sign” for producers, the CEO of US-based agribusiness major Bunge said on Thursday.

Earlier this week, Brazil’s finance minister unveiled a stimulus package to boost ethanol production and investment in the sector.

“[The measure] is clearly a positive sign of more support from the government; they realise that the profitability of ethanol needs to be higher for millers to invest,” Bunge CEO Alberto Weisser said during the company’s 2013 first-quarter results conference call.

Bunge, for its part, is in a good position as it managed to reduce costs, but for Brazil’s ethanol industry as whole, more help was needed, he added.

At this time, Bunge cannot yet quantify the effects the measure will have on its sugar and bioenergy business, Weisser said.  

“It’s too early [to say], because the devil is in the details,” he said.

The stimulus involves a tax reduction – partially among millers, partially among distributors – as well as a tax credit for millers and distributors, he added.

Earlier on Thursday, Bunge reported a sharp increase in 2013 first-quarter gross profit in its sugar and bioenergy segment – to $57m (€44m), up from $8m in the 2012 first quarter. The segment’s sales were $1.1bn, up from $881m in the year-earlier period.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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