Nov 25, 2009
Bunge Could Become Third Leading Producer of Sugar and Ethanol In Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The Bunge Corporation is making a major push to become one of the largest sugar and ethanol producers in Brazil. Bunge is in negotiations to purchase a Brazilian company called Grupo Moema and its six sugar mills. The estimated price tag is US$ 100 to US$ 105 per ton of sugarcane processing capacity. Since the six sugar mills owned by Grupo Moema have a crushing capacity of 13.5 million tons, the total purchase price is estimated at US$ 1.35 billion.
With the potential acquisition of Grupo Moema, Bunge's total sugarcane crushing capacity would leap to over 16 million tons of sugarcane per year. Grupo Moema's six sugar mills have a combined capacity to crush 13.5 million tons of sugarcane, which would produce 16.5 million sacks of sugar and 637 million liters of ethanol per year. Bunge already owns an 80% stake in a sugar mill in Minas Gerais with a capacity to crush 2.5 million tons of sugarcane. They have two other mills under construction, one in the state of Tocantins, slated to open in 2010, with a crushing capacity of 1.4 million tons per year and a second mill in Ponta Pora, Mato Grosso do Sul, slated to open in 2012, with a crushing capacity of 1.4 million tons per year.
If the sale goes through, Bunge will be near the top of all sugar producers in Brazil. Bunge would trail the two largest single producers in Brazil, Cosan with a 60 million ton crushing capacity followed by LDC-SEV with a 40 million ton crushing capacity. Bunge would be slightly ahead of Sao Martinho and Guarani, each of which has a capacity of 13 million tons. The large co-op called Coopersucar, has a crushing capacity of 67 million tons.