Guarani may sell up to 80% of its ethanol to Petrobras
Valor Econômico
Açúcar Guarani, which belongs to the French group Tereos International, announced the market yesterday it signed a contract with Petrobras Distribuidora and Petrobras Biocombustíveis to supply up to 2.2 billion liters of ethanol for four years. Should the entire volume be supplied, the agreement will mean that up to 80% of the current production of Guarani will be sold by BR Distribuidora, according to information of the very company. The agreement with the State-owned company was executed "according to the market conditions" and it is estimated at R$ 2.1 billion (US$ 1.24 billion), according to announcements made by the companies.
Although it brings a guarantee of future purchase of the product in the long term, the contract with Petrobras brings a great commitment of the production of Guarani with a single buyer, which may restrict the opportunities of gain of the company in case, for instance, of an increased remuneration for the ethanol in the export over the next four years. But, according to information of the sugar and alcohol company, those opportunities will be captured to the extent the prices of the contract with the State company vary according to the market conditions.
The contract announced is the result of a strategic partnership entered into between Tereos International and Petrobras Biocombustível, in April this year. The State company will invest R$ 1.6 billion (US$ 941.2 million) to withhold 45.7% of Guarani in the next five years. R$ 682 million (US$ 401.2 million) have already been invested so far, and the resources helped Guarani to reduce its debt and buy half of the São Paulo plant Vertente and 100% of Mandu. With the partnership, the focus of the company that until then was greatly aimed at the production of sugar will be to highly increase the participation of ethanol on its production mix, which last harvest was of 40%. The agreement assures Guarani the access to the distribution system of BR for part of its ethanol production. It also sets the percentage of purchase option of ethanol by Petrobras which, in April this year, was 50% of the production of Guarani.