Cargill, USJ form major Brazilian ethanol, sugar, power JV

June 3, 2011 |

In Brazil, Cargill and the USJ Group announced a joint venture in the sugar, ethanol, and bioelectricity segment. Each party will have a 50 percent interest in the venture, and management will also be shared. Transaction figures have not been disclosed.

The transaction should be concluded within 60 days and is subject to regulatory approval.  The new company will combine industrial assets of the USJ Group in the state of Goiás, which consist of the São Francisco mill and the Cachoeira Dourada mill, which is currently under construction in the same municipality. The joint venture will also inherit sugarcane supply agreements with local producers.

Part of the capital Cargill is investing in the joint venture will be used to conclude the Cachoeira Dourada mill, which is expected to enter operation for the 2013 harvest; resources will also be used to upgrade de São Francisco mill. The São João mill, in Araras, SP, will not be part of the new company.

After all upgrades, the two mills will have a joint processing capacity of 7.5 million metric tons of sugarcane per year. In addition to producing sugar and ethanol, they will also produce 120 MWH of electricity from sugarcane bagasse. One third of that will be used at the mills and the remainder will be supplied to the public grid.

Category: Fuels

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