By PAUL KIERNAN
Global oil giant BPs Brazilian biofuels division plans
to quadruple its sugarcane-crushing capacity in the next five
years as it seeks to capitalize on the growing market for
ethanol, the company confirmed.
BP Biocombustiveis, which operates three sugarcane mills in
Brazil, aims for crushing capacity of 30 million tpy of
sugarcane by 2017, up from 7.5 million tpy currently, local
newswire Agencia Estado reported Tuesday, citing an interview
with company President Mario Lindenhayn.
A BP Biocombustiveis press official confirmed the
According to the report, BP Biocombustiveis expects to reach
the goal by expanding its existing mills and building three new
Possible acquisitions aren't figured into the 30-million-ton
estimate but haven't been ruled out.
Lindenhayn said that in 2011, BP invested around $750 million
to expand to 100% its stake in Tropical Bioenergia, which has
one sugarcane mill in central Goias state, and CNAA, which owns
two functioning mills and one greenfield project in Minas Gerais and
In addition to expanding industrial capacity, BP
Biocombustiveis and other Brazilian sugar and ethanol producers
face an ongoing challenge to obtain enough feedstock.
A number of factors related to weather and irregular
investments in the sector caused Brazil's main center-south
sugarcane crop to fall 11% last year from the previous
"In the crop that's ending now, our crushing only amounted to 5
million tons," Lindenhayn said, according to Agencia
BP Biocombustiveis is currently investing to expand by 35%
its sugarcane acreage for the upcoming 2012-13 harvest, which
will begin in April.
BP Biocombustiveis owns 80% of the sugarcane it crushes to
produce sugar and ethanol, while the remaining 20% is purchased
Sugarcane-based alcohol is a major fuel source in Brazil, where
around half of the domestic auto fleet have flex-fuel engines
capable of running on pure hydrous ethanol.
Regular gasoline in Brazil contains a 20% mixture of
Dow Jones Newswires
Image courtesy of BP p.l.c.