4 November 2008

Archer Daniels Midland Company (ADM) and Brazil-based Grupo Cabrera have agreed to form a joint venture to produce ethanol from sugarcane in Brazil. The partnership will bring together ADM’s expertise in ethanol production, logistics and marketing with Cabrera’s extensive knowledge of sugarcane agriculture and production.

The joint venture will construct two processing complexes, each consisting of a sugarcane plantation, a sugar mill, an ethanol distillery and a biomass-powered cogeneration facility to provide power and steam.

The complexes will be located in Limeira Do Oeste in the state of Minas Gerais, and Jataí in Goiás. Upon completion, each mill will have crush capacity of three million metric tons annually.

Separately, Monsanto yesterday announced it is acquiring Aly Participações Ltda., which operates the sugarcane breeding and biotechnology companies, CanaVialis S.A. and Alellyx S.A., both of which are based in Brazil. The $290-million (R$616 million) cash purchase marks a major move by Monsanto into the large-acre row crop. Monsanto said that the acquisition was driven by long-term changes driving greater global demand for food and biofuel sources. (Earlier post.)