The investment is expected to internationalize Eco-Energy's ethanol operations and help both companies expand their bio-fuel platforms.
"With this partnership, Copersucar becomes a truly global company in the biofuel market, expanding the scale of its operations to the two main ethanol markets in the world, which are the United States and Brazil, both in production and consumption volume," said Luís Roberto Pogetti, Coperscucar’s Chairman. "We believe that this investment has a great potential for value creation for all, as it continues and expands operations, supported by its market expertise and strategic alliances."
As a result of the deal, Copersucar and Eco-Energy add their global supply capacity of 2.6 billion gallons, (10 billion liters), of biofuel per year to become the largest ethanol trader in the world, with a significant presence in the two largest ethanol markets globally.
In a written statement the companies said their new, integrated structure will help create significant efficiencies in the global supply chain as well as add value to both of the companies partner plants.
The companies’ operations are very similar and complementary, focusing on the integration of world supply-demand and logistic solutions throughout the supply chain, they said.
Eco-Energy operates in the marketing and distribution of biofuels, with solutions including exclusive alliances with ethanol producers, logistics, and marketing services to the downstream U.S. fuel distributors.
The company currently handles 9 percent of the U.S. ethanol market, with annual sales of over $3 billion and has strong relationships with producers and access to the most relevant markets and customers, due to an efficient operating platform, best in class resources, and focus on distribution and logistics.
The business model is very similar to that of Copersucar, a Brazilian company with 53 years of tradition in the sugar and ethanol industry.
For the current season (2012-13), Copersucar will market the equivalent of 24 percent of the production from the sugarcane production in the Center-South region of Brazil, with a volume of 1.3 billion gallons (4.8 billion liters) of ethanol and 8.7 million tons of sugar, and revenues estimated at $7.5 billion.
For the 2011/2012 season, ethanol sales accounted for 41 percent of the Company's revenues. Its operations are supported by an integrated logistics system of transport and storage, and a large scale commercialization, both in the domestic and international markets.
“We look forward to expanding globally with a partner as well respected as Copersucar," said Larry Beckwith, Chairman of Eco-Energy. "We have a similar business model and a comparable view on global biofuel growth. This partnership will help secure and build on the success of our company for years to come.”
The closing of the deal is still subject to certain regulatory approval.
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