Shell plans turning Brazil into platform for distribution of biofuels
O Estado de S. Paulo 09/21/10
With a budget of US$ 1.5 billion for investments in the new company that is being formed with Cosan, Shell is confident it will turn Brazil into its biofuel distribution platform for the world. Besides the investments in the increase of the Brazilian activities, the company expects to test, in the country, the second-generation ethanol technologies that are being developed by Iogen Energy, which is part of the agreement with Cosan. "In the long run, the goal is to create a global biofuel company and I believe the joint venture (with Cosan) has potential not only in Brazil, but to be a great player in such market", said the Vice President of Strategy, Portfolio and Alternative Energy of the Shell Group, Mark Gainsborough, who came to the country to take part in the Rio Oil & Gas Expo, last week.The joint venture with Cosan was announced in February and it foresees the merger of the assets of both the companies in the segments of distribution of fuel and production and research of new ethanol technologies. At an estimate value of US$ 12 billion, the company was born with 4.5 thousand gas stations, besides the largest capacity to produce ethanol in the Country. "The business (of distribution of fuel) will grow in the coming years and we have a fairly strong position in the market", said Gainsborough. He said he expects the approval of the joint venture by the agencies of defense of competition for the coming months, thus beginning the process of consolidation and investments of the new company. Starting next year, the Esso chain of gas stations, controlled by Cosan, should begin receiving the brand of Shell.
The main step, however, will be given towards the foreign market. "We believe there is great potential for the sugarcane ethanol in Brazil. The world has already realized Brazil developed, in the past years, a very competitive biofuel market", said Gainsborough. He recognizes, however, that there is a lot to be done in terms of logistics and politics - in this case, towards the breaking of trade and tariff barriers imposed by the developed countries. But he believes the presence of Shell in the largest consumer markets may help the Brazilian efforts to put an end in such barriers.