SAO PAULO (Reuters) – U.S. commodities trader Bunge Ltd (BG.N) and British energy company BP Plc (BP.L) said on Monday they will merge their Brazilian sugar and ethanol operations to create the world’s third-largest sugarcane processor. The joint venture is the largest deal in Brazil’s bioenergy sector since Royal Dutch Shell (RDSa.L) joined forces with Cosan (CSAN3.SA) to form industry leader Raízen in 2011. Together, Bunge and BP will manage 11 cane processing plants in Brazil, with capacity to crush 32 million tonnes of cane per year, putting them behind just Raízen and Biosev, controlled by commodities trader Louis Dreyfus. The deal gives BP a key role in Brazil’s booming ethanol market ahead of a new federal policy next year aimed at boosting use of biofuels, which are used interchangeably with gasoline in Brazilian passenger cars. “Brazil is the Saudi Arabia of biofuel,” BP’s head of Alternative Energy, Dev Sanyal, told Reuters. He added that the new venture was cash-flow positive. Bunge said it will receive cash proceeds of $775 million as part of the agreement, which it expects to use to cut debt. Bunge shares opened up more than 3% in New York before reducing gains to 1.8%. BP… continue reading
Continue reading Bunge and BP team up for Brazil sugar and ethanol venture. This article appeared first on CTRM Center.
Source: CTRM Center