Corn Ethanol in Brazil

OMAHA (DTN) -- Alden, Iowa-based Summit Agricultural Group started construction on what will be one of the few corn-based ethanol plants in Brazil, according to a news release from the company Wednesday. The 60-million-gallon plant is expected to start production sometime in 2017.

The plant is being built in Lucas do Rio Verde in Mato Grosso, an agricultural state in west-central Brazil that is the country's largest corn and soybeans producer.

Summit said it broke ground recently on what will become the first large-scale corn-ethanol plant in Brazil. The $115 million project is the result of the collaboration between Summit and Brazilian agribusiness Fiagril.

Summit Chief Executive Officer Bruce Rastetter said in the news release the plant is scheduled for completion mid-2017.

Rastetter is co-founder of Hawkeye Renewables. In a September 2014 interview with DTN about the Brazilian project, he said farmers in the region are 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.

At the turn of the century, just as corn-based ethanol in the United States was starting 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.

For much of the past decade, the U.S. ethanol industry had the wind at its back from the blenders credit and the Renewable Fuel Standard, sparking debate with the Brazilian industry about which was more sustainable -- producing ethanol using sugarcane or corn.

Even California's low-carbon fuel standard gives sugarcane ethanol more of a carbon break when compared to corn ethanol's footprint, essentially excluding corn ethanol from the picture.

Rastetter told DTN biotechnology gave his company the opportunity to double-crop around Mato Grosso. Also, there is the ability to grow soybeans, corn and cotton without irrigation. It has become more profitable for farmers to double-crop corn and soybeans.

Summit said in its news release the plant will help offset Brazil's increasing demand for domestic ethanol that cannot be met by existing sugarcane ethanol production.

In addition, the new corn-ethanol plant will introduce high-fiber and high-protein co-products to the region that will serve as high-value feed for the Brazilian livestock industry.

"This is a significant day for renewable fuels, Brazil and Summit Agricultural Group," Rastetter said in a news release. "Through Summit's expertise in sustainable agriculture, investment and renewable energy, we will further realize the enormous corn-growing potential of a region that is poised to become a global leader in corn ethanol production."

Fiagril's operations throughout Mato Grosso and adjoining Brazilian states include biodiesel production, grain trading, crop production inputs and infrastructure development.

"We are extremely proud of our international collaboration with Summit Agricultural Group on this historic corn-ethanol production facility," said Marino Franz, founder of Fiagril. "Mato Grosso has set the standards for Brazilian agriculture and business development for years, and thanks to this effort, the region will grow to new heights in the area of renewable fuels."

The new plant will utilize 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.

Brazil began sugarcane ethanol production in the mid-1970s, according to the news release, and today produces 25% of the world's ethanol.

Bank of America has estimated that annual ethanol sales in Brazil could reach 13.5 billion gallons in 2022, or two-thirds higher than the 8.1 billion gallons estimated in sugarcane ethanol production in 2016.

Justin Kirchhoff, investment development manager for Summit, said in a news release the introduction of corn-ethanol production in Brazil will generate dividends beyond the fuel pump and highway.

"Mato Grosso will also benefit from corn ethanol co-products such as high-fiber and high-protein feedstocks for the region's growing beef, pork and poultry industries," Kirchhoff said.

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

Follow him on Twitter @ToddNeeleyDTN

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