Jun 20, 2022

Brazil's FS Bioenergia Reports Record Profits from Corn Ethanol

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

FS Bioenergia is Brazil's pioneer and largest producer of corn ethanol. The company recently announced that gross receipts during 2021/22 increased 113% compared to the prior year and that profits before taxes, depreciation, etc., increased 126% to R$ 2.6 billion, which is a record for the company.

The company's first corn ethanol facility was inaugurated in the city of Lucas do Rio Verde in 2017. Their second facility was built in the city of Sorriso and it operated for 365 days during the 2021/22 fiscal year. The Lucas do Rio Verde facility operated for 355 days during the same period. Their third facility is being built in the city of Primavera do Leste in southeastern Mato Grosso and it will be inaugurated in June of 2023.

When the third facility comes online, FS Bioenergia will be one of the largest ethanol producers in Brazil surpassing 2 billion liters per year. The company has plans to construct three more corn ethanol facilities in Mato Grosso over the next few years. During the 2021/22 season, the company increased their corn usage by 27.7% to 3.27 million tons.

With their increased economy of scale for corn purchases and the production of ethanol and animal feed, the company announced that they have established a separate operation for corn marketing. During the past fiscal year, the company resold 222,600 tons of corn which generated gross receipts of R$ 285.6 million, which was an increase of 138% compared to the prior year.

FS Bioenergia is a joint venture between Tapajos Participacoes S/A from Brazil and Summit Agricultural Group from the United States.

The Mato Grosso Institute of Agricultural Economic (Imea) estimated that 19% of Mato Grosso's 2021 corn production would be utilized for ethanol production and that number is certain to increase in the years ahead. Mato Grosso is Brazil's largest corn exporting state, but more of the corn produced in the state is being utilized for ethanol production.