Peruvian sugar giant gears up for ethanol production

Coazucar, a subsidiary of Peru's multinational Grupo Gloria and the country's largest sugar producer, has secured the required permits to begin ethanol production using sugarcane feedstock from the three plantations it operates along the country's northern coast.

Coazucar's production manager Hugo Davila told Argus that production should begin in March at an initial level of around 8,000 USG/d (190 b/d). Feedstock will come from its Casa Grande, Cartavio and San Jacinto plantations.

“The plant is ready, but it has taken us more time than expected to gain the permits we needed,” Davila said on the sidelines of F O Licht's Latin America ethanol conference in northern Peru.

Davila said the company is still evaluating where to place the ethanol, but it will likely opt to export. One obvious market is neighboring Ecuador. There is also a domestic market founded on a Peruvian 7.8pc ethanol blend in gasoline, but this is already covered by other ethanol-producing companies.

Coazucar's ethanol project, located at the Casa Grande sugar plantation, will join Peru's two main ethanol-producing companies, the local Romero Group subsidiary Agricola del Chira and London-traded Maple Energy.

Exports are slim so far. Agricola del Chira will export 10.3mn USG of ethanol this year, or roughly 670 b/d. Maple exported around the same volume between its launch in May through end of November.

The principal export markets are The Netherlands with 41pc, followed by Colombia with 26pc and Ecuador with 25pc.

Coazucar currently has planted 38,709 hectares of sugarcane and recently acquired another 15,400 hectares in the Olmos irrigation project in the Lambayeque department in the north. The company expects to start harvesting sugarcane there in 2015. Investment is estimated at $335mn.

The project will likely have a dual function, producing refined sugar and ethanol.

“There will probably be a split. The thing is that Peru requires at least 1mn t of sugar for local consumption and there is a natural market Chile, which has deficit in sugar, so it is still good business to produce refined sugar,” he said.

Please visit ArgusMedia.com or more information.

Copyright © 2012 Argus Media Ltd. All rights reserved. By reading this article, you agree that you will not copy or reproduce any part of its contents (including, but not limited to single prices or any other individual items of data) in any form or for any purpose whatsoever without prior consent of the publisher.