Cosan Shareholder May Build $150 Million Paraguay Ethanol Mill

Roberto Rezende Barbosa, one of the largest shareholders in Cosan SA Industria & Comercio, is considering building a $150 million ethanol mill in Paraguay, where profits are higher than in Brazil.

“Paraguay is a free market and because there’s no price control there we can actually make money from sugar-cane processing,” Barbosa said in a telephone interview from Sao Paulo yesterday. “The costs are more convenient.”

Rezende Barbosa may expand into neighboring Paraguay as Brazilian state-controlled oil producer Petroleo Brasileiro SA sells gasoline at subsidized prices, “putting a bridle” on ethanol, an alternative fuel that is sold at a loss by sugar-cane processors, he said.

Cars in Paraguay and Brazil can run on pure ethanol or a mixture composed of 25 percent ethanol and the rest gasoline, he said. Ethanol is sold in Paraguay for almost twice as much on average as in Brazil, he said. Cosan doesn’t own mills in Paraguay.

Rezende Barbosa and his brothers hold a 10.9 percent stake in Cosan, which co-owns the world’s largest sugar-cane processor with Royal Dutch Sell Plc. (RDSA) Rezende Barbosa and his brothers Jose Eugenio and Renato Eugenio are jointly the largest holders in Cosan after Brazilian billionaire Rubens Ometto, according to information on the company’s website.

Rezende Barbosa and local partners, whom he declined to identify, are conducting economic viability studies to build a sugar-cane mill in Paraguay’s San Pedro state. The mill would process 1.5 million tons of cane and produce as much as 40 million liters (10.1 million gallons) of ethanol and 100,000 tons of sugar a year, Rezende Barbosa said.

To contact the reporter on this story: Lucia Kassai in Sao Paulo at

To contact the editor responsible for this story: James Attwood at

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