Oct 29 2010
Petrobras, Brazil’s state-run company, revealed that it has signed an agreement amounting to $ 1.23 billion with Tereos International, a French group, for the supply of ethanol.
This deal would help Petrobras to fulfill its objective of becoming a leader in the biofuel sector world-wide. As per the deal, 2.2 billion liters of ethanol would be supplied to BR, a fuel distribution subsidiary company of Petrobras, for a period of four years by the Brazilian branch of Tereos, Acucar Guarani. Petrobras further divulged that the contract not only guarantees the continued supply of ethanol to BR, but also gives access to Guarani for BR’s distribution system for a portion of hydrated and anhydrous ethanol production. This would also help in coordination between logistics, marketability and production.
The ethanol industry in Brazil has for quite a few years tried to consolidate and expand and especially after the financial crisis, acquisitions and mergers have become the norm. In 2008, Exxon Mobil’s fuel distribution assets were purchased by Cosan, the biggest producer of ethanol and sugar in the world. Later in the month of February, Cosan and Royal Dutch Shell came together in a joint venture to create a No. 3 fuels distributor in Brazil. In the month of April, Petrobras staked a claim for 46 % of Guarani, expending $920 million to stride into the ethanol production industry. The funds would help in expanding biofuel production. In 2009, BR became Brazil’s leading fuel distributor, with a 46 % market share. After the United States, Brazil is the second largest ethanol producer in the world.