Oct 26, 2010
Cargill Announces Its First Biodiesel Plant in Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Cargill announced this week that they will build their first biodiesel plant in Brazil. It will be located adjacent to one of their existing soybean crushing plants in Tres Lagoas, Mato Grosso do Sul. The facility will be operational in 2012 and it will produce 200,000 tons of biodiesel per year. The total investment in the project is R$ 130 million.
In January of 2010, Brazil went to a B5 mixture of vegetable oil in their petroleum diesel. Over 80% of the vegetable oil used in the mixture is soybean oil and the current mixture requires the use of approximately 2 million tons of soybean oil per year. The Brazilian government has been trying to promote other vegetable oils for the mixture, but for the foreseeable future, the primary vegetable oil used in the mixture will continue to be soybean oil. Expectations are the government will continue to aggressively increase the amount of vegetable oil blended into petroleum diesel. As a result, even if soybean production increases in Brazil over the next few years, the amount of soybean oil exported from Brazil may actually decline.
Cargill operates six soybean crushing plants in Brazil with the newest plant opening in 2009 in Primavera do Leste in Mato Grosso. Cargill's gross receipts in 2009 from their Brazilian operations totaled R$ 15.8 billion with profits of R$ 325 million.
Soybean oil is also being used in biodiesel production in Argentina as well. In July, the Argentine government announced that their petroleum blend would go from a B5 to a B7 blend. In August, Cargill started construction of a biodiesel plant in Argentina which is expected to start operations sometime in 2011.