Ethanol Blog

Iowa Company to Double Ethanol Production at Plant in Brazil

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Iowa-based Summit Agricultural Group announced plans to double production at a corn-ethanol plant in Brazil. (Photo courtesy Summit Agricultural Group)

Just five months after launching corn-ethanol production at a plant in Brazil, Iowa-based Summit Agricultural Group announced plans to double capacity at the plant in Lucas do Rio Verde, Mato Grosso, from 60 million gallons to 140 million gallons, according to a news release from the company.

The $100 million expansion is scheduled for completion in early 2019.

FS Bioenergia is expected to process more than 50 million bushels of corn, produce more than 14,000 tons of corn oil and 400,000 tons of feed rations for Brazil's livestock industry.

"This is a significant step for FS Bioenergia, but it's even more important for the growth of corn ethanol production in Brazil," Bruce Rastetter, founder and CEO of Summit Agricultural Group, said in a news release.

"When we began this project several years ago, we were confident of the opportunities in Brazilian renewables. Today, we're more convinced than ever of the potential for corn ethanol in Mato Grosso."

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First, the company said the expansion is possible because of increased corn production through double cropping, as corn production has increased by five times in Mato Grosso in the past decade. Second, the company said Brazil's RenovaBio program calls for a doubling of the country's use of renewable fuels by 2030.

"Brazil's long-standing commitment to renewable fuels coupled with an abundance of affordable feedstocks make for an attractive corn ethanol picture in Brazil," said Justin Kirchhoff, managing director and head of private equity for Summit Agricultural Group.

"As we look at the expansion of FS Bioenergia over this next year, we're in a strong position to benefit from these favorable conditions."

Production at the plant was launched just prior to the Brazilian government levying a 20% tariff on ethanol imports from the United States. As a result of years of bumper corn crops, farmers in Brazil have been facing storage problems and were leaving stockpiles on the ground.

Rastetter is co-founder of Hawkeye Renewables. In a September 2014 interview with DTN about the Brazilian project, he said farmers in the region were looking to add value to their corn crop, and a market for dried distillers grains is growing as more cattle become part of the mix.

Brazil launched sugarcane ethanol production in the mid-1970s and today produces about 25% of the world's ethanol. According to Bank of America, annual ethanol sales in Brazil could reach 13.5 billion gallons in 2022.

The plant also generates 60,000 megawatts of electricity for the local power grid. It was built in an agricultural state in west-central Brazil that is the country's largest corn and soybeans producer.

At the turn of the century, just as corn-based ethanol in the U.S. started to hit its stride with investors pouring money into building new plants as fast as they could, North American producers struck up a rivalry with their counterparts in Brazil.

The new plant utilizes process technologies from Kansas-based ICM, Inc. Since 1995, ICM has provided engineering, construction and operational services for more than 100 ethanol plants in North America.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

(TN)

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