With investments of US$85 millions, Brazilian state controlled Petrobras starts producing ethanol from sugar cane this month. It is the first time the oil giant invests in a domestic ethanol plant, which is located in the state of Minas Gerais, one of the largest producer of sugar cane in Brazil. The plant is part of Petrobras’ Strategic Plan to produce biodiesel and ethanol by 2013, totalling US$ 2.8 billion. With the investment, the plant’s production capacity is going to rise from 100 million litres to 204 million litres per year, by 2012. Brazil is the second largest producer of ethanol in the world, after the US, which makes the product using mainly corn. Ethanol use in the country has grown, with government support, for more than 30 years. Recently, there two big deals in the sector: agribusiness giant Bunge Ltd’s (BG) purchase of Brazilian producer Moema for about $452 million and British oil giant BP plc’s (BP) $1 billion investment in a Brazilian biofuel maker. The country produced about 23.4 billion liters of ethanol in 2009 and has more than 10 million cars running with a blend of gasoline and ethanol.
