Moema Par is a holding company that owns one sugarcane mill and has ownership in five others. Together the six mills, known as the Moema Group, have the capacity to crush 15.4 metric tons. This agreement, which is structured as a share exchange worth approximately $896 million, gives Bunge 60 percent effective share of the total capacity.

“This transaction fulfills Bunge’s strategic goal of building a large-scale, fully integrated business in sugar and bioenergy,” stated Alberto Weisser, Chairman and CEO of Bunge Limited. “It adds significant scale to our current milling operations and enables us to vary production among multiple sugar and ethanol products, according to market conditions. The Moema Group cluster is also strategically located near large domestic markets in Brazil and has excellent access to export logistics systems. All of these strengths make it a perfect fit with our global trading and marketing operations.”

The Moema Group cluster is located on the border of São Paulo and Minas Gerais states, the two largest domestic ethanol markets in Brazil. According to Bunge, the mills benefit from cost savings due to their cluster configuration, and have favorable road and rail access to three of Brazil’s largest export ports (Santos, Paranagua and Vitoria). The mills can produce both raw and crystal sugar, as well as hydrous and anhydrous ethanol. In addition, the mills have co-generation facilities, are self-sustaining in terms of energy requirements and sell excess power to the grid. The majority of the cluster’s sugarcane is harvested mechanically, which is now law in São Paulo.

According to Bunge, they may enter into agreements to secure some of all of the remaining interests in the mills that comprise the Moema Group in the next few weeks.

Source: Domestic Fuel

SAN PABLO (Reuters). – The international demand of ethanol would register an increase in the next months, but the Brazilian market will continue being the main production attractiveness in Brazil, the major world-wide biofuel exporter, an analyst said.

Encouraged by the increasing fleet of “flexible” fuel vehicles in the country, the demand of ethanol in Brazil reached a record last year and would increase again in 2008 in the middle of the peak in the sales of new automobiles, said Pliny Nastari, director of the Datagro consultant. “For the next five to seven years, the most important market will be the domestic one. The ethanol exports will increase, but just modestly”, indicated Nastari in Reuters Global Agriculture and Biofuel Summit, in San Pablo.

After the stagnate for 20 years, the Brazilian ethanol consumption grew in 3700 million liters in 2007, a record of 16,700 million liters. This year it would increase in 2900 million liters, in line with the increase of cars sales, the consultant emphasized.

The greater economic growth and the reductions of the interest rates in Brazil encouraged the sales of new vehicles in a 28 percent in 2007 and would increase to a 18 percent this year. The “flexible” fuel vehicles represent 86 percent of those sales.

In 2007, the competitive prices of ethanol in gas stations also encouraged the cars sales, detailed Nastari. However, the world-wide demand of ethanol did not reach the expectations of the majority of Brazilian producers and operators. The strong increase in the northamerican production, the commercial barriers and the indecision of some governments to introduce obligatory fuel mixtures frustrated the most optimistic perspective.

After registering an increase in 2006, the ethanol exports of Brazil fell in 2007 to 3800 million liters and they will be reduced again this year to 3400 million liters, said Nastari. The analyst affirmed that the expansion of the ethanol local market was causing a “structural change” in the Brazilian sugar industry, because the sugar mills are producing more ethanol than sugar. Datagro anticipates that the Brazilian demand of ethanol would reach 32,000 million liters after 2014, when that biofuels gets to represents 53 percent of fuels used in the green light vehicles, due the increase of the “flexible” fuel automobiles fleet.

The exports would not exceed the 7000 million liters in 2014. At that time, the sugar mills would destine near 62 percent of the countries cane drip to the ethanol production, against the near 55 percent of the South center region of Brazil in cycle 2007/2008.

Source: La Nación