Cargill Joint Venture Will Double Brazil Sugar Crush

SAO PAULO, BrazilCargill and Grupo USJ announced a 50-50 joint venture to establish SJC Bioenergia, a new company that will allow Cargill to double its Brazilian cane crushing capacity to 15 million metric tons by 2020.

SJC Bioenergia currently has the capacity to crush 5 million metric tons of cane to produce 170 million liters of ethanol and 420,000 tons of sugar every harvest. The partnership combines industrial assets of Grupo USJ, which includes two mills, and Cargills experience as a global trader of sugar and ethanol.

The new company will also inherit sugarcane supply agreements held with local farmers who supply its two mills. In addition to sugar and ethanol, SJC Bioenergia also will generate electricity from sugarcane bagasse. One-third of this power will supply all company needs and two thirds will be sold to the national grid.

Ingo Kalder, the director in charge of SJC, said the company plans to expand its operations by 2.5 million tons every two years to become one of Brazil's largest sugar and ethanol producers by the end of the decade. The first milestone is a target of 7.5 million of cane by 2013-14.

Our plans to expand the Cachoeira Dourada and São Francisco mills in the following years will enable us to double crushing capacity to 15 million metric tons of sugarcane. We will do this by adding modules of 2.5 million metric tons every two years. This will place SJC Bioenergia among the largest producers of sugar and ethanol in Brazil," he said.

Commenting on the joint venture, Marcelo Andrade, director of Cargills Sugar and Ethanol business in Brazil, said, The two SJC mills in Goiás have synergies, competitive economies of scale, and are designed for easy and fast expansion. We are also considering the possibility of producing other products in the region, based on new technologies. The region features fully mechanized planting and harvesting, and its farmers are committed to developing this industry."