Brazil invites Indian firms to invest in cane farming

Brazil, the world's largest ethanol producer, has thrown open its doors to investment by Indian companies in sugarcane farming, extracting ethanol and exporting it back home for mixing in petrol.

"Yes, yes sure. They can buy ethanol manufacturing companies, invest in cane farming and producing ethanol," visiting Brazalian Minister of State for Industry and Foreign Trade Miguel Jorge told reporters after meeting Oil Minister Murli Deora here today.

While India dopes petrol with five per cent ethanol to cut its oil import dependence, petrol is Brazil is made up of one-fourth ethanol.

Brazil, he said, was encouraging India to raise the percentage of ethanol in petrol and would allow companies investing in ethanol production in Brazil to export the green fuel back home.

Deora said the government plans to double ethanol quantity in petrol to 10 per cent from October.

State-run fuel retailers are already talking to various companies in Brazil for cane farming and ethanol production at an investment of close to $600 million.

Indian Oil, Hindustan Petroleum and Bharat Petroleum will form a joint venture to take up ethanol production in Brazil. They together will have a 50 per cent stake in the joint venture, while a local Brazilian firm will have the remaining.

The partner search exercise conducted by the local consultant The Jai Group has identified four companies, including large integrated groups Louis Dreyfus Commodities Bioenergia (LDCB) and Infinity. The other companies identified are Rezek and Goiasa.

The initial ethanol production capacity being targeted is 500 million litres.