Petrobras Biocombustivel postpones Goias'Boa Vista ethanol plant capacity expansion

Aug 23, 2013 - Petrobras Biocombustivel, the biofuels subsidiary of Brazil's oil and gas giant Petrobras (SAO:PETR3), decided to postpone for an indefinte time the doubling of the capacity of its ethanol plant Boa Vista in the central-western Goias state, originally projected for the 2014/15 crop, CEO Miguel Rossetto declared.

The decision mirrors the expectations for low return on investment at the moment, Rossetto explained. The expansion plan will be kept but there is no exact date set for its development, the CEO added.

Petrobras Biocombustivel has announced a BRL-520.7-million (USD 213.8m/EUR 160.3m) partnership with sector firm Sao Martinho (SAO:SMTO3) for the transformation of the Boa Vista plant in the world's largest ethanol producing facility. The two companies planned to boost the the plant's sugar cane crushing capacity to 8 million tonnes in 2014/15, with the whole raw material to be used for the production of biofuels.

In the 2013/14 crop, the plant is expected to process 4 million tonnes of cane.

Petrobras' biofuels area has been registering losses since the company entered the segment in the beginning of this decade. In 2012, Petrobras Biocombustivel posted a loss of BRL 218 million from BRL 157 million loss in 2011. Besides the joint venture for the Goias plant, Petrobras has a 49% stake in sector firm Acucar Guarani SA, majority controlled by Tereos (SAO:TERI3), and a shareholding in Bambui Bioenergia.

Petrobras Biocombustivel is seen to crush 26.5 million tonnes of cane in 2013/14, up 18%, and to produce 1.06 billion litres (233.2m gallons) of ethanol, a 29% annual hike.

Under the company's 2013-2017 business plan, Petrobras Biocombustivel is expected to invest USD 2.9 billion (EUR 2.174bn) in ethanol and biodiesel operations. In the 2012-2016 plan, the investments were projected at USD 2.5 billion.

(USD 1.0 = EUR 0.750; BRL 1.0 = USD 0.411/EUR 0.308)

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