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Raízen’s Shares Drop After Global Leader in Ethanol Production Acquires Shell’s Lubricants Plants in Rio de Janeiro
The giant oil company Shell Brasil, announced on May 2 that it completed the sale of its lubricants division in Brazil to the largest global ethanol producer, a leader in sugarcane, ethanol, and bioenergy production in Brazil.Raízen, which saw its shares evaporate on the stock market!
The deal involving Raízen, a joint venture between Cosan and Shell that acts as the exclusive sales agent for Shell lubricants in the country, came after the expiration of a 10-year contract between the companies.
According to Shell’s statement, as of May 1, 2022, the lubricants plant on Ilha do Governador in Rio de Janeiro, the oils base in Campos Elíseos in Duque de Caxias (RJ), the Shell Marine lubricants division for vessels, and the lubricants supply and distribution businesses in the country were transferred to Raízen.
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A Brazilian city gains a factory worth R$ 300 million with the capacity to process 200 thousand tons of wheat per year, a mill of 660 tons per day, silos for 42 thousand tons, and an industrial area of 276 thousand m².
The long-standing partnership between Shell and Raízen includes retail, aviation, and fuel distribution portfolios. The integration of the lubricants division into the joint venture will generate synergies between the two companies and ensure a supply of lubricants and fuels with more decarbonization opportunities.
“With an annual production capacity of 280,000 m³ of lubricants, the Ilha do Governador unit is strategically located, featuring an exclusive pier for import and export. The lubricants line offers innovative solutions for light and heavy vehicles, trucks, and motorcycles, operating under the Shell Helix, Shell Rimula, and Shell Advance brands, in addition to a complete line of products for various industrial segments,” the oil company stated in its release.
After the transaction’s completion, the Shell brand will remain prominent through a licensing agreement with Raízen. Customers will continue having access to Shell brand products and services.
Raízen Approves Construction of Two Ethanol Plants in SP
Raízen has approved the construction of the 3rd and 4th Second Generation Ethanol Plants (E2G) in the Bioenergy Parks of Barra and Univalem, both in the state of São Paulo.
The announcement was made by the company yesterday (05/11). According to the ethanol giant, the investment in building the plants will be R$ 2 billion, adding a capacity of 164,000 m³ of biofuel per year.
The plants will add a capacity of 164,000 cubic meters of biofuel per year and are expected to start operations in 2024.
According to the company, the expected investment already takes into account the current inflation and exchange rate scenario for the supply and provision of machinery, equipment, and labor.
With the new plants, Raízen will be the only global producer operating four industrial-scale cellulosic ethanol plants with a total installed capacity of 280,000 cubic meters per year, of which 80% of the volume has been sold under long-term contracts, the company added.
Record Net Profit of R$ 1.21 Billion
Raízen achieved a record adjusted net profit of R$ 1.21 billion in the third quarter of the 2021-2022 crop year, corresponding to the fourth quarter of 2021. The result, on a pro forma basis, significantly exceeded the R$ 384 million recorded by the company in the same period of 2020. The accounting net profit reached R$ 1.4 billion.
Net operating revenue reached R$ 55.3 billion in the quarter, an increase of nearly 50% compared to the previous year, and R$ 142.7 billion in the first nine months of the crop year, representing a jump of nearly 60%.
The Ebitda – earnings before interest, taxes, depreciation, and amortization – adjusted totaled a record R$ 3.36 billion, an increase of 5.6% year over year. For the first nine months of the crop year, the result grew by 39.4% compared to the previous year and ended at R$ 8.92 billion.
Raízen, a joint venture between Shell and Cosan, is an integrated energy company, a leader in sugarcane, ethanol, and bioenergy production in Brazil. Raízen has 35 production units for sugar, ethanol, and bioenergy, 1.3 million hectares of cultivated agricultural land, a network of over 7,300 Shell-branded gas stations, 1,300 Select convenience stores, and more than 4,000 commercial customers in Brazil, Argentina, and Paraguay.
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