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August 14, 2017

Brazil President Inaugurates Ethanol Plant, Meets with Governors

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazil's President, Michel Temer, along with Brazil's Agricultural Minister, Blairo Maggi, inaugurated last Friday Brazil's first corn-based ethanol facility in the city of Lucas do Rio Verde in central Mato Grosso.

The US$ 115 million dollar facility is a joint venture between the American company Summit Agricultural Group and the Brazilian company Fiagril Participacoes. Jointly, they created FS Bioenergy to operate the facility and Fiagril will be responsible for originating the corn needed for the plant.

The facility will utilize the same technology used in over 100 corn-based ethanol facilities in the United States to produce 250 million liters of ethanol, 6,200 tons of corn oil, 186,000 tons of DDGs, and 60,000 megawatts of excess electricity annually. The ethanol produced in the facility will be distributed in Mato Grosso and in other northern and northeastern Brazilian states.

FS Bioenergy anticipates that the facility will utilize a significant part of the corn produced in the municipalities of Lucas do Rio Verde, Sorriso, Tapurah, Nova Mutum, and other nearby locations. Fiagril announced that they have already purchased 120,000 tons of corn, which is enough to run the plant for two months.

In addition to inaugurating the new ethanol facility, President Temer participated in the initiation of the cotton harvest in Mato Grosso, which produces about two-thirds of Brazil's cotton. The President climbed inside the cab of a cotton harvester to symbolically start the cotton harvest.

He also met with governors and politicians from the states of Mato Grosso, Tocantins, Para, Rondonia, Roraima, Amazonas, and Amapa to discuss regional development projects in northern Brazil, especially the proposed new railroads in the region.

The governor of Mato Grosso, Pedro Taques, emphasized to the president the importance of the Sinop-Miritituba railroad known as the Ferrograo of "Grain Railroad." This proposed railroad would link the main grain producing state of Mato Grosso with ports on the Amazon River. The proposed Grain Railroad will be constructed in a public-private partnership with the federal government and multinational grain companies.

Currently, the only way to ship grain north out of Mato Grosso to the Amazon is by truck on highway BR-163. During peak periods, the cost of moving grain north can be as high as nearly $2.00 per bushel. The proposed railroad could reduce that cost by 40%.

The governor of Mato Grosso also pressed the President for progress on the Center-West Railroad, which would be an east-west railroad linking Mato Grosso with an existing railroad in Goias. The goal of all these projects is to offer various alternatives to moving grain out of Mato Grosso to various ports in Brazil instead of relying mainly on trucks to transport the grain.