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Peru’s Maple Shifting to Cane Ethanol in ‘Transformational Year’

Feb. 15 (Bloomberg) -- Maple Energy Plc, the Peruvian company that made more than 99 percent of its revenue from selling petroleum products in 2011, expects to get more than half its business from ethanol sales this year as its $254 million sugar-cane mill expands production.

The company will generate more earnings before interest, taxes, depreciation, and amortization from sugar cane than from refining oil in the first full year of the ethanol plant’s operation, Chief Executive Officer Rex Canon said today in a telephone interview. Ebitda was about $16 million in 2011.

Maple Energy, based in Lima, is shifting to selling ethanol because it can sell the fuel in Europe for twice what it costs to make, Canon said.

“This will be a transformational year for us,” he said. “We’ve been working on this for quite some time. Just right now we’re realizing the fruits of all this work.”

Making and transporting ethanol to Europe may cost as little as $1.60 a gallon (3.8 liters), he said. Ethanol now sells at about $3.20 a gallon in Rotterdam.

Maple expects its yields to reach 150 million metric tons a year at its cane fields in Peru, where the climate permits a near-year-round growing season and output is boosted by drip-irrigation systems. That’s almost double the typical yields of 80 tons a year at mills in Brazil, the world’s biggest ethanol producer after the U.S., he said.

The plant, in the northern coastal region of Piura, has annual production capacity of 35 million gallons of ethanol. It went into production in April and processed 579,000 tons of cane in 2012.

The company will boost its cane plantations to about 7,800 hectares (19,300 acres) this year, from 6,532 hectares at the end of last year, he said.

Maple produces 500 barrels of oil a day and buys 1,500 barrels of natural gas a day for processing at a petroleum refinery it owns in Peru’s central jungle, he said. The company makes aviation fuel and solvents among other products.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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