Jan. 11 (Bloomberg) -- Vinema Biorefinarias do Sul Ltda., a Brazilian biofuel company, plans to spend 720 million reais ($354 million) building the nation’s first six ethanol-fuel mills that use grains as raw material.
The company expects to secure most of the 40 million reais of equity commitments for a first plant in the city of Cristal within 40 days, Vilson Neumann Machado, director of development projects at Camaqua, Brazil-based Vinema, said in a telephone interview today.
The plants will be built in the southern state of Rio Grande do Sul where it’s unsuitable to grow sugar cane, the feedstock used by the rest of Brazil’s ethanol industry. Virtually all of the state’s ethanol is imported on trucks which is costly, he said.
“Ethanol costs about 1.30 reais a liter at the gates of a mill in Sao Paulo,” Machado said. “When it arrives here, it’s 1.60. That’s a big difference.”
The plants are expected to come online through 2020 and will be able to jointly produce 600 million liters (158 million gallons) of fuel a year, he said. They will operate for more than 350 days a year, running on grains including rice, sorghum and oats.
The ethanol, which requires less refining than the cane variety, will also be sold as a feedstock for solvents and pharmaceuticals, he said.
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