Brazil Starts Petrobras Biofuel, a US$ 1.5 Billion Venture

Petrobras plant in Candeias Brazil's Petrobras Biofuel, a subsidiary of the state-controlled oil multinational Petrobras, was officially inaugurated this past Tuesday, July 29, with the opening of a biofuel mill in Bahia. The company is going to invest US$ 1.5 billion in the sector up to 2012.

Apart from confirming the company environmental engagements through greater production of biofuels, the creation of Petrobras Biofuels strengthens the company's operation in the sector.

"This should bring the company to national leadership in biodiesel production and expand the participation in the ethanol business, focusing on the international market," informs the company's press department.

In the installation of the Candeias, Montes Claros and Quixadá biodiesel mills, the company should invest 295 million Brazilian reais (US$ 187 million). Candeias unit was inaugurated  July 29 and the others two should start operating by the end of August.

Petrobras Biofuels should also include the Bioenergy Complexes (CBios), which are enterprises set up in partnership with Brazilian producers and international conglomerates for the production of ethanol for export. In this case, the target is to produce 4.75 billion liters (1.25 billion gallons) by 2012.

"With the subsidiary, Petrobras strengthens its position with regard to the environment and with social development. Apart from contributing to the reduction of global warming, biofuels allow for generation of jobs and income in the country, with the use of family farming for production of raw materials," informs Petrobras.

According to the company, Petrobras Biofuels is engaged in obtaining the Social Fuel Stamp within the premises of the National Program for Production and Use of Biodiesel. "The company takes on the challenge of expanding the presence of family farming, always observing business, social and environmental sustainability."

The new Candeias subsidiary is studying the possibility of acquiring existing mills for production of biodiesel. The idea is to strengthen production, causing the Brazilian state-controlled company to reach the target of producing 940 million liters (248 million gallons) of biofuel a year after 2012.

According to the president nominated for Petrobras Biofuels, Alan Kardec, the definition of the targets of the new company should be closed when the holding's new Business Plan is concluded, which should take place in September, although publication should only be in October.

Company information shows that Petrobras Biofuels is born with "a robust project portfolio" and, apart form the investment scheduled to reach around US$ 1.5 billion by 2012, should have 250 employees and be based in the Maracanã, in Rio de Janeiro, where Petrobras Distribuidora (BR) is also located.

The establishment of Petrobras Biofuels is due to the company's intention of integrating activities in the biofuel area – as they are currently spread throughout several of the group's subsidiaries.

In an interview, Alan Kardec sought to appease sector businessmen concerned about the "possible" federalization of the ethanol sector. "We are not aiming at federalization," he said.

ABr

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