British sugar trader Czarnikow has entered as a partner in a new ethanol trading company in Brazil, in a joint venture with a group of local investors who control sugar and ethanol plants, according to documents released on Friday by the Brazilian government.
It is reported by Reuters.
CADE, the Brazilian anti-trust watchdog, said it has approved the creation of the ethanol trading venture after a request by Czarnikow and its partners Vale do Tijuco Açúcar e Álcool SA and Canápolis Açúcar e Etanol SA.
Both Brazilian companies are controlled by a group of investors including IndoAgri Brazil Participações and investment fund Marseille FIP. The group will have a combined 51% share in the venture, with Czarnikow taking 49%, according to the documents released by CADE.
Czarnikow, a sugar trader and provider of trade services and financing, recently decided to expand into other products, including ethanol.
The group of investors in Brazil partnering Czarnikow are also expanding operations from the initial sugar and ethanol plant Vale do Tijuco in Uberaba, Minas Gerais state. They were involved in the acquisition three years ago of a sugar mill sold by Archer Daniels Midland Co, located in Limeira do Oeste, as well in Minas Gerais.
There were no details regarding expected investment in the venture or targets for ethanol trading.
Ethanol consumption is booming in Brazil, mostly due to a large price advantage over gasoline. Production increased almost 20% in the last crop-year ended in March.