Ethanol Blog

Company Launches Construction of Second Corn-Based Ethanol Plant in Brazil

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A joint venture in Brazil co-founded by an Iowa-based agriculture company, has started construction on its second corn-based ethanol plant in Mato Grosso. (Photo courtesy of Summit Agricultural Group)

Brazil-based FS Bioenergy, a joint venture between Iowa-based Summit Agricultural Group and Brazilian company Tapajos Participacoes, launched construction last week on their second corn-based ethanol plant in Sorriso, Brazil, according to a news release from FS Bioenergy.

The total plant investment announced at R $1 billion, or $267.5 million, is expected to be completed in time to sell ethanol to market by February 2020. According to the company, its operations are benefitting from the country's RenovaBio program that pays biofuels producers for reducing carbon emissions.

The first phase of the construction includes a production capacity of about 70 million gallons per year, using about 24.8 million bushels of corn, the company said.

A yet-to-be-announced second phase of construction is expected to double the production capacity at the new plant, requiring an additional investment of more than $93 million.

"Our idea to anticipate construction with a first phase is to access the market early," FS Bioenergy Chief Executive Officer Rafael Abud said in a news release. "Building the entire project at one time would only take a longer time."

Once completed, the new ethanol plant in Mato Grosso will add production capacity to a state that already produces more biofuel than it consumes. The company said currently it sells ethanol to the north region of Mato Grosso and is expected to sell new volumes to the underserved Para.

"As this mill will start operating at an off-season corn season in Mato Grosso, FS Bioenergia is closing grain purchase contracts that will be harvested next winter and will be stocked until the unit begins operations," the release said.

Abud said the company's goal is to help corn producers become more productive. Currently, Moto Grosso's corn yield is around 100 sacks per hectare (2.5 acres). "The more technical ones already produce 150 sacks per hectare, but in the United States already produces near 200 sacks per hectare," he said.

To expand agriculture production, the company said it plans to reserve area on its land in Sorriso for experimental maize crops and for demonstrations of new technologies.

The new plant also will depend on the supply of eucalyptus chip to fuel the cogeneration of energy that supplies the unit. The company said it is partnering with producers in the midwest of Mato Grosso to plant about 74,000 acres of eucalyptus, which will be able to supply their two plants in the state.

So far, partnerships have been made to plant more than 12,300 acres, many of which have been planted.

In January 2018, FS Bioenergy announced plans to double capacity at its plant in Lucas do Rio Verde, Mato Grosso, from 60 million gallons to 140 million gallons, according to a news release from the company.

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 as a result of the expansion.

At the time, the company said the expansion was 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.

Production at the plant was launched just prior to the Brazilian government levying a 20% tariff on ethanol imports from the United States.

Summit Agricultural Group was founded by Bruce Rastetter, co-founder of Hawkeye Renewables. In a September 2014 interview with DTN about the first 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.

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

Follow him on Twitter @toddneeleyDTN

(TN)

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