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March 2, 2017

Two New Corn-Based Ethanol Facilities in South America

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The interest in corn-based ethanol production in South America is certainly on the increase. New corn-based ethanol producing facilities will be inaugurated this year in both Paraguay and Brazil and companies are scouting new locations for additional facilities.

The largest ethanol producing facility in Latin America is set to be inaugurated in Paraguay. Industria Paraguaia de Alcool (Inpasa), with its headquarters in the city of Canindeyu, is set to inaugurate its new facility located in the department of San Pedro. This is an expansion of its existing facility.

The existing facility utilizes both corn and sugarcane to produce 14 million liters of ethanol per day. The expansion will utilize only corn and when operational, the expanded facility will produce 35 million liters per month. The new expansion alone, which uses only corn, will produce 720,000 liters of ethanol per day.

According to the Poultry Producers and Exporters Association of Paraguay (APPEP), only about 20% of the corn produced in Paraguay is consumed domestically, so there is a surplus of corn that could be utilized to produce ethanol. The Commence Minister of Paraguay indicated that in 2016, the country utilized 2.57 billion liters of ethanol, which is up 16% compared to 2015. Currently, the gasoline in Paraguay contains 12% ethanol.

In Brazil, the first corn-based ethanol facility will come on-line later this year. The facility is being built by FS Bioenergia, which is the leading company in Brazil for the production of ethanol from corn. The US$ 115 million facility is located in the city of Lucas do Rio Verde in central Mato Grosso.

FS Bioenergia is also scouting out new locations for a second facility in the city of Sinop in northern Mato Grosso. The company is working with city officials to identify a suitable 50 hectare parcel (123 acres) for the new facility. The size of the new facility has not yet been determined.

The state of Mato Grosso is the largest corn producing state in Brazil and the vast majority of the corn produced in the state is exported at a very high cost of transportation. The gasoline in Brazil contains 27.5% ethanol with virtually all new cars capable of utilizing 100% ethanol.