Cosan expects to double sugar cane ethanol exports to US in 08/09

In Brazil, Cosan said that it expected to double its sugarcane ethanol exports to the US in the 2008/09 cane season, and that exports would account for 25 percent of sales, up from 20 percent today. The announcement came as the company posted a net loss of $3.4 million for the recent quarter due to falling sugar prices. The company posted a profit of $105 million in the corresponding quarter last year.

Cosan background

Cosan has acquired ExxonMobil’s 1500 Brazilian service stations (under the Esso brand) in an $826 million deal. The company said that it is buying the stations to assure itself of a distribution network for its ethanol products. Ethanol consumption increased 29 percent since 2003 and last year exceeded gasoline sales. The deal gives Cosan a 7 percent share of retail fuel distribution in Brazil.

Cosan had said it was aggressively seeking opportunities in the United States. The chief commercial officer, Marcos Lutz, told Ethanol Statistics that Cosan has established a three-step strategy for international expansion, including a dehydration plant in the Caribbean, an ethanol distillery in Mexico and up to two ethanol plants in the US. Cosan had previously said that the company’s $1 billion IPO, completed last year, provided the necessary growth capital for the company, which derives 33 percent of its revenue from ethanol production.

The company announced in February that it will acquire the Usina Benalcohol ethanol plant for $61 million, plus assumption of $20 million in company debt. Benalcohol has a 1.3 million tonnes of cane a year, and is located in Aracatuba, Sao Paulo state. The plant will be Cosan’s fifth in the area.

In Brazil, Petrobras, the state oil company and Cosan, have locked horns over a Petrobras plan to build a state-owned pipeline to transport ethanol. “If Petrobras has the logistics, it will have control of the sector and this we don’t want,” said Rubens Ometto Silveira Mello, Cosan’s controlling shareholder and chief executive officer, told Agencia Estado. The proposed ethanol pipeline will run from Goias state to Sao Paulo.

Cosan (CZZ) has 17 ethanol plants in Brazil and is the country’s largest producer.

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