Cargill and Grupo USJ Enter Joint Venture and Create SJC Bioenergia
The two partners will share management of SJC Bioenergia on a 50/50 basis. The new company will also inherit sugarcane supply agreements held with local farmers who supply its two mills.
Sep 20 2011 --- Cargill and Grupo USJ have entered a joint venture to establish SJC Bioenergia. The new partnership combines industrial assets of Grupo USJ in the state of Goiás, which consist of the São Francisco mill, in operation since 2007 in Quirinópolis, and the Cachoeira Dourada mill, which is currently under construction in the same municipality. SJC Bioenergia will have an installed capacity to process up to 7.5 million metric tons of sugarcane in 2013. It combines Cargill’s experience as a global trader of sugar and ethanol and Grupo USJ’s 65 years of expertise in the sugarcane industry.
The two partners will share management of SJC Bioenergia on a 50/50 basis. The new company will also inherit sugarcane supply agreements held with local farmers who supply its two mills. In addition to sugar and ethanol, SJC Bioenergia will also generate electricity from sugarcane bagasse. One third of this power will supply all company needs and two thirds will be sold to the national grid.
According to Ingo Kalder, the director in charge of SJC, the company currently employs 2,195 people. Once Cachoeira Dourada is concluded in 2013, this figure will increase to 3,000. Today, the two mills process 5 million metric tons of sugarcane to produce 170 million liters of ethanol and 420,000 tons of sugar every harvest, in addition to 350,000 MW of energy every year. Once the company crushes 7.5 million metric tons of sugarcane in 2013/2014, it will be able to produce an additional 200 million liters of ethanol and another 200,000 MW of electricity. “Our plans to expand the Cachoeira Dourada and São Francisco mills in the following years will enable us to double crushing capacity to 15 million metric tons of sugarcane. We will do this by adding modules of 2.5 million metric tons every two years. This will place SJC Bioenergia among the largest producers of sugar and ethanol in Brazil,” adds Kalder.
According to Hermínio Ometto Neto, president of Grupo USJ, one of the deciding factors to select Cargill was the alignment of organizational values between the two groups, in addition to the technical experience. “Grupo USJ has great expertise in the sugar and energy industry, and its mills are based in the most promising region for sugarcane production in Brazil. And Cargill is one of the world’s largest food companies and one of the most important sugar traders,” says Ometto Neto.
Cargill already has equity interest in Cevasa, a mill based in Patrocínio Paulista, SP, which recently doubled its sugarcane processing capacity to three million metric tons per year, and now also produces sugar. “The two SJC mills in Goiás have synergies, competitive economies of scale, and are designed for easy and fast expansion, “We are also considering the possibility of producing other products in the region, based on new technologies” says Marcelo Andrade, director of Cargill’s Sugar and Ethanol business in Brazil. “The region features fully mechanized planting and harvesting, and its farmers are committed to developing this industry,” adds Andrade, pointing out the potential of the state of Goiás in the sugar and energy industry.
