If the deals between Raízen and Biosev are completed, production will be 17% of the total sugarcane and ethanol plants in the Center-South region
Raízen, a company producing ethanol in Brazil and the owner of the Ipiranga gas stations, is acquiring one of the leaders in the sugar-energy sector, Biosev. If the deals go through, the new project alone will have a production capacity of 17% of all sugarcane mills in the Center-South region, home to the main producers in Brazil, which account for 70% of national production.
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Production of the two large plants:
Raízen is a joint venture between Cosan and Shell that has the largest sugarcane processing capacity in the country, raw material for the production of sugar, ethanol and electricity. According to the company, Raízen has 26 plants in operation with an installed capacity of 73 million tons.
Biosev, a French company belonging to the Louis Dreyfus group, controls 8 production units and has the capacity to process 31,6 million tons of sugarcane.
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Its large companies in the sugar-energy sector can together add up to 105 million tons. This number means no less than 17% of the 598 million tons of sugarcane planted by mills in the Center-South region of the country.
Mills should prioritize sugar production this year
In 2021, sugarcane mills will prioritize the production of sugar and not ethanol. The main producers in Brazil that are located in the Center-South region, which correspond to 70% of national production, have the following factor to have priority in production: the price of the sweetener in the domestic market and the recovery of values in the foreign market.
Unlike plants that produce ethanol from corn, sugarcane plants can determine whether to produce more sugar or ethanol. Therefore, a broader mix term for one or the other product.