Mar 15, 2018
Brazil's First Corn-Based Ethanol Facility to Double in Size
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazil's first corn-based ethanol facility is less than one year old and already the company has announced plans to double the capacity of the plant. FS Bioenergia operates the facility and they announced this week that they will invest R$ 350 million (approximately $310 million) to double the capacity of the plant. FS Bioenergia is a joint venture between Tapajos Participacoes S/A from Brazil and Summit Agricultural Group from the United States.
When the expansion is completed, the facility, which is located in the city of Lucas do Rio Verde in central Mato Grosso, will utilize 1.3 million tons of corn annually. The same group recently announced that they will construct a second corn-based ethanol facility up the road in the city of Sorriso at a cost of R$ 1 billion (approximately $110 million).
The second facility in Sorriso, which is currently in the process of obtaining licenses, will utilize 1.8 million tons of corn annually to produce 680 million liters of ethanol, 500,000 tons of DDGs, 20,000 tons of corn oil, in addition to producing excess electricity which will be sold back into the grid. These two facilities alone will consume approximately 3.1 million tons of corn annually or more than 10% of the corn produced in Mato Grosso.
Approximately 1.5% of Brazil's ethanol is produced from corn, but that percentage is expected to increase significantly over the next few years. Having another alternative for selling their corn is very good news for farmers in Mato Grosso who produce a significant surplus of corn on an annual basis. Since the cost of transporting the corn to export facilities is very expensive, corn prices paid to farmers in Mato Grosso are generally some of the lowest in Brazil. The farmers are hoping that these facilities will result in firmer corn prices.
These facilities also generate excess electricity that is fed back into the electrical grid. Currently, Mato Grosso generates 95% of its electricity from renewable sources. Hydroelectricity accounts for 93.3% of the electricity consumed in the state with biomass and solar accounting for 1.2% with diesel and natural gas accounting for 5.4%.