August 11, 2017 / 9:01 PM / a month ago

Brazil launches first corn-only ethanol plant, hopes for more

SAO PAULO, Aug 11 (Reuters) - With a record corn crop in the silos and Brazil’s president on hand, FS Bioenergia on Friday inaugurated the country’s first ethanol plant processing only corn in the heartland of the South American grains powerhouse.

President Michel Temer was joined at the inauguration by Agriculture Minister Blairo Maggi, who pledged the government’s support for corn-based ethanol - an innovation in a country that has long made ethanol more efficiently from sugarcane.

Privately owned FS Bioenergia said the plant will produce about 240 million liters (63.4 million U.S. gallons)of ethanol from corn each year, along with 6,200 tonnes of corn oil and 60,000 megawatts of power.

The dignitaries on hand to celebrate the new plant in the state of Mato Grosso, Brazil’s top grains producer, underscores how eager the country is to find new outlets for its surging corn production.

“If we had 10 plants like this one, we would be able to absorb about 6 million tonnes of corn from the market,” said Maggi, who lamented the scarce demand for Brazil’s bumper crop on the visit to his home state. “Current prices do not even cover production costs.”

A second annual corn crop, planted after soybeans are harvested, has made Brazil the world’s second-largest exporter of the cereal and a major competitor to the United States in global markets.

The second corn harvest represents about 68 percent of Brazil’s total corn crop. Mato Grosso, where production has grown exponentially over the years, accounts for almost a third of the country’s total corn output, according to growers association Aprosoja.

FS Bioenergia is a joint venture between Brazil’s Fiagril Participações and U.S.-based Summit Agricultural Group.

Corn-base ethanol is a novelty in a country producing ethanol from sugarcane since the government in the 1970s started its biofuel program to find an alternative to oil-based fuels during the oil supply shocks. There currently are around 360 cane-based plants.

Producers of ethanol say it is much more efficient to use cane than corn, in terms of energy used in the process. But Brazil’s ample supply of corn could reduce the gap between both systems in terms of costs.

Reporting by Ana Mano and Roberto Samora; Editing by Dan Grebler

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