Mega merger may create ethanol giant

Mega merger may create ethanol giant

The CrystalSev trading, which commercialize sugar and ethanol of nine ethanol plants around Sao Paulo, is trying to orchestrate a merger between its shareholders.

If realized, this could create a group almost the size of leader Cosan - with annual sales of around R$2.5 billion.

In a first phase, the merger would include:
- Cia. Energetica Santa Elisa (Sertaozinho, SP) (Andre Biagi)
- Cia Vale do Rosario (Morro Agudo, SP)
- Jardest (Jardinopolis, SP)
- MB (Morro Agudo)
Those four process about 15 million tonnes of sugar cane per year, good for total sales of around R$1.5 billion.


The second phase would encompass:
- Mandu (Maracai, SP)
- Pioneiros (Sud Menucci, SP)
- Moema (Orindiuva, SP) (Maurilio Biagi Filho)
- Paraiso (Brotas, SP)
Those 4 would bring the total production to around 26 ;illion tonnes, and sales of R$2.5 billion

This merger would bring the Biagi family closer together again, with MB Filho (who owns stakes in MB as well) ending up in the same group as Andre Biagi again.

Crystalserv itself, a partner of Cargill since 1998, is working with Cargill to build a sugar refinery in Syria. They also own an ethanol dehydration plant in El Salvador, serving as a stepping board for export to the US.

It is also constructing an ethanol plant in Santa Vitoria (MG), good for 2 million tonnes as of 2008.

The whole process is just an example of the trend towards concentrating the Brazilian ethanol market, driven by Cosan. Cosan now owns 17 plants; and since it launch on the stock market its shares went up 139%. Created in 1986, and under the leadership of Rubens Ometto Silveira Mello, the group now has a capacity of 40 million tonnes.