February 12, 2020 / 2:15 AM / 17 days ago

World's largest sugarcane plant mulls using corn to boost ethanol output

FILE PHOTO: A general view of Sao Martinho sugar mill in Pradopolis, Brazil September 13, 2018. REUTERS/Paulo Whitaker

SAO PAULO (Reuters) - The world’s largest plant to process sugarcane, Brazil’s Sao Martinho mill in Pradopolis, Sao Paulo state, could add corn as a second source of raw material to be able to boost its ethanol production, the company that controls the plant said on Tuesday.

Several cane-based sugar and ethanol plants in Brazil are adding machinery to produce ethanol using corn as well, a model seen as profitable because plants use cane waste as an energy source to process the corn and expand production period to a full year, instead of just during the cane crop from April to December.

The company (SMTO3.SA), named Sao Martinho after its main unit, said it is weighing the possibility of making the investment to process corn and boost ethanol production capacity in the huge Pradopolis installation.

“It is a project under evaluation. Logistics is an important issue, since we would have to bring corn from the center-west,” said Felipe Vicchiato, Sao Martinho’s chief financial officer, during a conference call with analysts and investors on Tuesday.

He said the size of the mill in Pradopolis could compensate for the logistic costs and make the project financially feasible, but a final decision has yet to be taken.

Brazil is witnessing a boom in corn-ethanol investment, but most projects take place in center-west states such as Mato Grosso and Goias, large corn producers.

Some analysts had suggested the possibility to produce corn-ethanol as well in Sao Paulo, Brazil’s main sugar belt, since a lot of corn produced in Mato Grosso usually crosses the state on its way to the export port of Santos.

Sao Martinho is already building an attached installation to produce ethanol from corn at its Boa Vista mill, located in Quirinopolis, Goias state.

Reporting by Marcelo Teixeira; Editing by Leslie Adler

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