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Sale of Business

Chinese group COFCO wants to buy sugar refinery in Brazil

08/02/2017 | 12h31

COFCO Brasil and Companhia Mineira de Açúcar e Álcool (CMAA) have informed the Brazilian judicial authorities of their interest in participating in the auction, on 4 September, for the sale of the Revati sugar refinery, now owned by Brazilian company Renuka, currently in receivership, reported the Brazilian press.

 

The sale of the Renuka refinery, located in Brejo Alegre (state of São Paulo) and with an installed capacity to grind 4 million tonnes of sugarcane per harvest, is part of the company’s receivership process.

 

With a liability of 2.7 billion reais (US$864 million), Renuka, owned by Indian group Shree Renuka Sugars Ltd, has been in receivership since October 2015.

 

The Indian group, which began investing in Brazil in 2010, was faced in the country, similarly to the other companies in the sector, with low prices for sugar and administrative control of fuel prices, in place under previous governments and the current government.

 

The creditors approved a plan in 2016 that included the sale of another plant, Madhu, in Promissão (state of São Paulo), but the auction held in December with a bid price of 700 million reais did not attract any interested parties.

 

A second auction with no minimum value scheduled for last January was suspended at the request of the National Bank for Economic and Social Development (BNDES).

 

Cofco Brasil, a subsidiary of China National Cereals, Oils and Foodstuffs Corporation, owns four sugarcane processing plants in the state of São Paulo, with a combined capacity to process 15 million tonnes per year.

 

CMAA, in turn, controls the Vale do Tijuco and Vale do Pontal units, both in the Triângulo Mineiro (a region in the state of Minas Gerais, in southeastern Brazil), which have the capacity to grind 5 million tonnes of cane per year.



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