ADM joins Grupo Cabrera in ethanol j.v.

by Eric Schroeder
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DECATUR, ILL. — Archer Daniels Midland Co. and Grupo Cabrera have reached agreement to form a joint venture to produce ethanol from sugarcane. According to the companies, the partnership will combine ADM’s expertise in ethanol production, logistics and marketing with Cabrera’s extensive knowledge of sugarcane agriculture and production.

"As the world’s need for food and energy grows, agriculture — and ADM — will provide renewable, responsible solutions," said John Rice, executive vice-president of commercial and production at ADM. "This joint venture will leverage the expertise of both participants to meet growing Brazilian demand for ethanol. Importantly, this partnership also advances ADM’s goals of diversifying our feedstocks and growing our global bioenergy business."

As part of the joint venture, the companies will build 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 Jatai in Goias.

Once completed, each mill will have annual crush capacity of 3 million tones, ADM said.

In a Nov. 4 conference call held in conjunction with first-quarter financials, Patricia Woertz, chairman and chief executive officer, commented on the joint venture.

"We believe we have the right opportunity and the right partner," Ms. Woertz said. "The partnership brings together the Cabrera organization’s deep knowledge of sugarcane and expertise in regional agriculture and our expertise in ethanol production and marketing. The investment by the joint venture will be around $500 million over seven years, about $370 million of that will be ADM’s share. And we expect to reach about six million metric tons of sugarcane crushed per year, with about half of that cane used to produce about 70 million to 90 million gallons of ethanol per year."

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