Dec 12, 2013 - Raizen, the sugar and ethanol joint venture of Brazilian sector player Cosan (SAO:CSAN3) and Anglo-Dutch oil major Shell (AMS:RDSA, LON:RDSA), plans to lower its investments in 2014 in search of efficiency in its agribusiness operations.
According to Raizen's vice-president for sugar, ethanol and bioenergy, Pedro Isamu Mizutani, quoted by local business daily Valor yesterday, the exact value of the investments next year is not defined yet, but non-priority projects will be withdrawn from the company's short-term plans or they will be developed slowly. One of these non-priority projects is the boost of electricity production at Raizen's co-generation plants. Mizutani reminded that the company has been expanding some of its facilities in order to be able to generate power 11 months per year and not only during the eight-month sugar cane crushing cycle, but this project is abandoned for the moment.
The company's plans for capacity increase of anhydrous ethanol production will also be slowed down. Currently, anhydrous ethanol accounts for 45% of the total ethanol production of Raizen. The company targets to raise this share to 100%, but in the long term, Mizutani explained.
The executive added that as a whole, the investments of Raizen, which is also engaged in fuel distribution activities, will be by BRL 200 million-BRL 300 million (USD 85.4m/EUR 61.9m-USD 128.1m/EUR 92.9m) lower next year and the most affected will be its sugar and ethanol operations.
The belt-tightening in the sugar and ethanol operations of Raizen started in October and it will have also an impact on the company's projects planned for 2013. However, investments in the sugar and ethanol business will be higher in comparison to 2012, Mizutani outlined. Between January and September, investments in this segment came in at BRL 1.9 billion, up 6% in annual terms.
(BRL 1.0 = USD 0.427/EUR 0.309)
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