Sao Martinho announces 30 year ethanol export contract with the Mitsubishi Corporation
Sao Martinho S.A. through its subsidiary Usina Boa Vista S.A., today announced the execution of an Ethanol Purchase and Sale Agreement with Japan's largest trade group, the Mitsubishi Corporation, by means of which Usina Boa Vista S.A., which will be initially crushing up to 3.0 million tonnes of sugarcane per year, producing around 286,000 cubic meters of ethanol, agrees to sell Mitsubishi 30% of its total output in the form of industrial ethanol.
The contract will last for 30 years and envisages tracking the productive process in order to ascertain details of production from cane planting through to the final distillation of ethanol. Supply will begin in the 2008/09 harvest. Japan is the main market, but other external markets may be considered should the opportunity arise. Prices will be based on prevailing market conditions during the supply period.
Brazil and Japan are closely working together on export agreements, which, according to some estimates, will attract investments of between US$6 to 8 billion over the coming years. Japanese investors want to acquire minority stakes in 40 ethanol plants across Brazil. Earlier, Japan's Mitsui & Co Ltd signed supply agreements with state-run oil firm Petrobras, and is collaborating on building a dedicated ethanol pipeline from Brazil's sugarcane producing regions in the Center-South of the country to Atlantic ports (earlier post), whereas Japan's National Development Bank announced it will invest in distilleries (earlier post). The Japan Bank for International Cooperation too has signed a biofuel cooperation agreement with Brazilian ministeries, to collaborate on exporting the green fuels (earlier post).
Of all regions, the Japanese islands have the lowest bioenergy production potential (earlier post). However, the Japanese government has mandated an ethanol blend of 3%, which is expected to be increased to 10% from 2008-2010 onwards (earlier post). Anticipating this decision, the nation is looking to Brazil and South East Asia for biofuel supplies:
bioenergy :: biofuels :: energy :: sustainability :: ethanol :: trade :: Brazil :: Japan ::
Back to the agreement between Sao Martinho and Mitshubishi: the Brazilian company also signed a Share Purchase Agreement, by means of which it agreed to sell 10% of its holdings in Usina Boa Vista S.A., whose capital currently comprises 71,726,267 Reais, to the Mitsubishi Corporation of Japan. The aim of the sale is to strengthen relations between the Company and Mitsubishi, given the long-term ethanol supply contract entered into by both parties.
Joao Carvalho do Val, Sao Martinho's CFO and IRO, declared, "Mitsubishi already acquires our Ribonucleic Acid Sodium Salt output and this new contract strengthens our long-term ties even further, as well as reinforcing Sao Martinho's determination to continue investing in the growth of its activities."
Sao Martinho S.A. is one of the largest producers of sugar and ethanol in Brazil. The company purchases, cultivates, harvest and crushes sugarcane - the main raw material used in its sugar and ethanol operations. The company's current crushing capacity is 10.3 million tonnes/year.
The contract will last for 30 years and envisages tracking the productive process in order to ascertain details of production from cane planting through to the final distillation of ethanol. Supply will begin in the 2008/09 harvest. Japan is the main market, but other external markets may be considered should the opportunity arise. Prices will be based on prevailing market conditions during the supply period.
Brazil and Japan are closely working together on export agreements, which, according to some estimates, will attract investments of between US$6 to 8 billion over the coming years. Japanese investors want to acquire minority stakes in 40 ethanol plants across Brazil. Earlier, Japan's Mitsui & Co Ltd signed supply agreements with state-run oil firm Petrobras, and is collaborating on building a dedicated ethanol pipeline from Brazil's sugarcane producing regions in the Center-South of the country to Atlantic ports (earlier post), whereas Japan's National Development Bank announced it will invest in distilleries (earlier post). The Japan Bank for International Cooperation too has signed a biofuel cooperation agreement with Brazilian ministeries, to collaborate on exporting the green fuels (earlier post).
Of all regions, the Japanese islands have the lowest bioenergy production potential (earlier post). However, the Japanese government has mandated an ethanol blend of 3%, which is expected to be increased to 10% from 2008-2010 onwards (earlier post). Anticipating this decision, the nation is looking to Brazil and South East Asia for biofuel supplies:
bioenergy :: biofuels :: energy :: sustainability :: ethanol :: trade :: Brazil :: Japan ::
Back to the agreement between Sao Martinho and Mitshubishi: the Brazilian company also signed a Share Purchase Agreement, by means of which it agreed to sell 10% of its holdings in Usina Boa Vista S.A., whose capital currently comprises 71,726,267 Reais, to the Mitsubishi Corporation of Japan. The aim of the sale is to strengthen relations between the Company and Mitsubishi, given the long-term ethanol supply contract entered into by both parties.
Joao Carvalho do Val, Sao Martinho's CFO and IRO, declared, "Mitsubishi already acquires our Ribonucleic Acid Sodium Salt output and this new contract strengthens our long-term ties even further, as well as reinforcing Sao Martinho's determination to continue investing in the growth of its activities."
Sao Martinho S.A. is one of the largest producers of sugar and ethanol in Brazil. The company purchases, cultivates, harvest and crushes sugarcane - the main raw material used in its sugar and ethanol operations. The company's current crushing capacity is 10.3 million tonnes/year.
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