Brazil’s Jalles to build new sugar plant as prices soar
SAO PAULO, June 22 (Reuters) – Brazilian sugar and ethanol producer Jalles Machado SA JALL3.SA said late on Wednesday it will invest 170 million reais ($35.6 million) in building a new sugar plant in the state of Minas Gerais, adjacent to the Santa Vitoria ethanol facility.
The announcement comes as sugar prices trade near multi-year highs and analysts expect tight availability of sugar in the global market for the next two seasons at least.
The announcement comes as sugar prices trade near multi-year highs and analysts expect tight availability of sugar in the global market for the next two seasons at least.
The B3-listed company said the plant will produce VHP (very high polarization) sugar, a type that is usually exported. Production capacity is projected at 150,000 tonnes per crop.
The Santa Vitoria facility has so far only been producing ethanol, and the company believes the new sugar plant could use as much as 52% of the cane processed at the site to make the sweetener.
Jalles Machado expects the new plant to be operational as soon as next season. The company operates two other mills in Brazil.
Investments in new sugar production capacity are expected due to the tight global supply outlook and high prices, although some analysts say high interest rates are a challenge for companies needing to raise money for such projects. ($1 = 4.7742 reais) (Reporting by Patricia Vilas Boas; Additional reporting and writing by Marcelo Teixeira in New York; Editing by Jan Harvey)
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