Maple climbed 3 percent to $1.35 at 1:43 p.m. Lima time after earlier rising as much as 3.8 percent, the steepest intraday advance since March 2. The stock has gained 25 percent this year.
The factory in the northwestern region of Piura will start producing fuel from sugar cane ’’within the next several days,’’ the Lima-based company said in a statement today. The project was set back six months by equipment supply delays, causing a $12.5 million cost overrun.
“This announcement was aimed at calming the market as the plant had been expected to start operating in the fourth quarter,” Roberto Flores, head of research at Lima-based brokerage Inteligo SAB. “The stock was suppressed by the lack of news, but it should see some upside now.”
The company will export part of the factory’s 35 million gallons of annual output to the U.S. and the European Union, General Manager Guillermo Ferreyros said in an interview last year. Maple President Rex Canon didn’t respond to telephone calls and e-mails seeking comment today.
Maple’s project is part of $10 billion in investment commitments expected in Peru’s energy industry over the next seven years, according to the country’s Energy Ministry. Companies including Pure Biofuels Corp. (PBOF), Heaven Petroleum Operators and Peru’s Romero Group are investing $100 million in biofuel projects using crops such as canola.
Peruvian gasoline stations, currently supplied by the Romero Group’s Cana Brava unit, must use a 7.8 percent mix of ethanol in their fuel by law, said BBVA Banco Continental analyst German Estrada.
“The local market has a deficit of ethanol fuel,” Estrada wrote today in a note to clients. Maple shares may gain 44 percent “based on the favorable perspectives of the start of the ethanol project,” he said.
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