ADM announces its first Brazilian biodiesel plant

By | September 01, 2006
Archer Daniels Midland Co. (ADM) announced plans to build a 54 MMgy biodiesel plant in Brazil, according to a press release. It will be the agribusiness giant's first biodiesel plant in that country.

The production facility will use soy oil as its feedstock. The site is in Rondonopolis, Mato Grosso, "strategically located" adjacent to an existing ADM soy crushing facility, which allows ADM to maximize synergies between the company's origination, transportation and processing operations in Brazil.

"The Government of the State of Mato Grosso recognizes the importance of renewable fuels, and we are pleased that ADM, a world leader in bio-based fuels, has chosen our state to build its first Brazilian biodiesel plant," said Mato Grosso Gov. Blairo Maggi, in a prepared statement.

Depending on final engineering and permit approval, the plant is expected to be producing biodiesel in the first half of 2007. This is excellent timing, considering Brazil recently passed a nationwide biodiesel mandate. Beginning in 2008, all diesel sold in Brazil must contain 2 percent biodiesel, and by 2013, it increases to 5 percent, according to the press release.

The decision to pursue biodiesel production in Brazil may have had a last-minute effect on the company's record annual earnings, released a few days after the Brazil project was announced. The company said its net earnings for the year ending June 30, 2006, increased 26 percent to $1.31 billion. Its segment operating profit, including oilseed processing and corn processing, for the fourth quarter increased 82 percent. ADM said oilseed processing market conditions improved in all geographical areas, while corn processing profit increased due to improved ethanol and sweetener selling prices and volumes.
 
 
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