BP is expanding its business in Brazil that produces ethanol from sugarcane. The company is increasing its share in Brazilian biofuel company Tropical BioEnergia S.A. to 100%, acquiring the remaining 50% of the company from the joint venture partners for about US$71 million.
BP is also taking an additional share of Brazilian sugar and ethanol producer Companhia Nacional de Açúcar e Álcool (CNAA) from LDC Bioenergia S.A. for a price of approximately US$25 million, bringing its holding to 99.97%.
BP’s current joint venture partners in Tropical BioEnergia S.A. are Maeda S.A. Agroindustrial (25%) and LDC-SEV Bioenergia S.A. (25%). After the deal is completed, subject to regulatory approval and agreed closing conditions, BP will become the 100% owner of Tropical BioEnergia S.A. and operator of its producing ethanol mill, located in Edéia, Goiás state. The mill will be able to supply both Brazilian and international markets with ethanol.
BP intends to double the size of the operations at Tropical BioEnergia to a capacity of 5 million tonnes of crushed cane—450 million liters (119 million gallons US) of ethanol equivalent—per year and also to expand operations in the region. The mill will also have the capacity to supply approximately 250GWh of electricity per year to the grid.This acquisition takes the number of producing mills in BP’s Brazilian ethanol portfolio to three, all of which are located in Goiás and Minas Gerais states in the center-south of the country.
Since April 2011, BP has been the operator of the CNAA mills in Itumbiara, Goiás and Ituiutaba, Minas Gerais.
This is another significant milestone in BP’s global biofuel strategy as we expand our operations base and demonstrate our genuine commitment to Brazil’s ethanol industry, which can deliver sustainable and competitive biofuels into the global market.—Philip New, Vice President of BP Biofuels