Brazil’s Grupo Potencial to Invest $392 Million in Corn Ethanol Plant in Parana State

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August 11, 2025

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by Roberto Samora (Reuters/Successful Farming) Brazil’s Grupo Potencial will invest 2 billion reais ($392.9 million) to build a corn ethanol plant in Lapa, Parana state, as part of a plan to develop the world’s largest biofuels complex, Vice President Carlos Eduardo Hammerschmidt said.

The group is already in advanced stages of constructing a soybean crushing facility at the site, which is expected to be completed in the first half of 2026.

The plant will supply raw material to Potencial’s expanding biodiesel factory, Hammerschmidt said in an interview with Reuters on Monday, while future plans include building a sustainable aviation fuel (SAF) facility.

“Our goal is to build the largest biofuels complex in the world,” said Hammerschmidt, a co-owner of the family-run company.

The corn ethanol plant will require 1.2 million metric tons of corn each year, equivalent to 6% of Parana’s output. The state, Brazil’s second-largest corn producer, is forecast to harvest a record 20 million tons in the 2024/25 season.

Construction of the ethanol plant is scheduled to begin in 2026, using the company’s own funds, and may be completed by late 2027, Hammerschmidt said.

Corn ethanol production in Brazil’s center-south region is expected to grow more than 30% in 2024/25, driven by rising fuel demand and a new rule, effective since the start of August, which mandates that gasoline must include 30% anhydrous ethanol.

Once the biodiesel plant expansion is completed by the end of 2026, Potencial will boost its annual production capacity from 900 million liters to 1.62 billion liters, Hammerschmidt added.

The soybean crusher in Lapa will be able to process 1.2 million tons per year, he said.

The ethanol plant investment is part of a broader strategy that includes building two pipelines — one for ethanol and one for biodiesel — connecting the nearby city of Araucaria to the Lapa complex, with potential to serve other cities.

The company expects to invest 200 million reais in the pipelines, Hammerschmidt said.

“We’ll deliver both biodiesel and ethanol directly to fuel distribution hubs,” Hammerschmidt said, noting the complex’s proximity to an oil refinery in Parana owned by state energy giant, Petrobras PETR4.SA.

($1 = 5.5090 Brazilian reais) READ MORE

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With R$625 million, BNDES finances São Martinho's corn ethanol plant in Goiás (Brazilian Development Bank (BNDES) (Google translation))
Cargill’s Brazil Unit to Build New Corn Ethanol Plant (Reuters/Successful Farming)
Cargill Bioenergia to build corn ethanol plant in Goiás (Terra (Google translation))

Excerpt from Brazilian Development Bank (BNDES) (Google translation):

Project expands production capacity of the Boa Vista Unit
Financing via the Climate Fund and BNDES Finem covers 53% of the total investment of R$1.18 billion
New plant reinforces commitment to decarbonization and job creation in the country's interior

The Brazilian Development Bank (BNDES) has approved R$625 million in financing for São Martinho S/A. to build a new corn ethanol plant. The project will allow the company to expand production at its Boa Vista Unit, an industrial complex in Quirinópolis, Goiás, and will contribute to decarbonization by avoiding emissions of approximately 380,000 tons of carbon dioxide equivalent (CO2e) per year.

The project will be financed with R$500 million from the Climate Fund and R$125 million from Finem (National Institute of Economic and Social Development). The R$625 million approved by BNDES represents 53% of the total investment. Another R$102.8 million will come from the Brazilian Studies and Projects Financing Agency (Finep). The support from the two banks together represents approximately 62% of the project's total investment, which also includes R$452.2 million in the company's own resources.

The operation strengthens the domestic equipment supply chain, as 34.1% of the project is earmarked for the acquisition of domestically produced machinery. This percentage, however, may vary throughout the project's execution, depending on operational and contractual adjustments. Another expected result is an increase in Brazilian ethanol exports, contributing to the sector's surplus and generating foreign exchange in dollars for the country.

This second phase, attached to the Boa Vista Unit, will increase processing capacity by 635,000 tons of corn per year and production by 270,000 m³ of ethanol, with flexibility to maximize anhydrous or hydrous ethanol production, depending on the company's strategy and market conditions. It is also estimated that approximately 13,000 tons of corn oil and 170,000 tons of DDGs (Distiller's Dried Grains with Solubles), used in the animal feed industry, will be generated annually as byproducts.

"The Bank's support for projects like this is aligned with the Federal Government's New Industry Brazil program, which seeks to modernize and make our industry more competitive and sustainable by 2033," stated BNDES President Aloizio Mercadante. He also highlighted that corn ethanol represents an important advance in the country's energy transition: "We are strengthening strategic production chains, promoting decarbonization, and contributing to a low-carbon industrial model, generating jobs and technological innovation," he added.

"The initiative's key differentiator will be its energy efficiency, with one of the lowest steam consumption rates per ton of milling in the entire industry. This makes the project unique and will allow for greater operational and economic efficiency, as the plant will not rely on external biomass purchases," emphasized Felipe Vicchiato, São Martinho's CFO and Investor Relations Director.

"This investment reaffirms our confidence in the potential of Brazilian agribusiness, contributing to and stimulating its development through job creation, regional raw material procurement, and the sale of competitive products. The project also contributes to the Brazilian energy matrix, increasing the availability of clean and renewable energy and reducing dependence on petroleum derivatives," Vicchiato added about the project, which, during its implementation, will generate approximately 1,000 jobs and, upon completion, is expected to hire approximately 110 qualified professionals for operations.

"Finep has supported projects involving the development of innovative technologies in the country, aligned with the New Industry Brazil. In this project, Finep's support was focused on the most innovative activities, such as the implementation of 4.0 technologies in the industrial process and the development of a technology, unprecedented in Brazil, for recovering oil from vinasse. This support demonstrates Finep's commitment to the neo-industrialization process, with innovation and sustainability as pillars of Brazilian economic development," says the institution's president, Luiz Antonio Elias.

The Boa Vista Unit in Goiás already has a corn ethanol plant, also financed by BNDES. Its operations began in the 2023/24 harvest. The industrial complex also houses a sugarcane ethanol plant, inaugurated in 2008.

Climate Fund – This is one of the instruments of the National Policy on Climate Change and is an accounting fund, linked to the Ministry of the Environment and Climate Change (MMA), with the purpose of securing resources to support projects or studies and financing ventures aimed at mitigating climate change. Its objective is to support the implementation of projects, the acquisition of machinery and equipment, and technological development related to reducing greenhouse gas emissions and adapting to climate change and its effects.

The Company - São Martinho S/A is a publicly traded company with shares traded on the B3 Novo Mercado since 2007. Its history began in the 1930s with the acquisition of its first production facility. Since then, the company has expanded its presence in the agribusiness sector and established itself as a leader in the production of sugar, ethanol, bioenergy, and sugarcane and corn derivatives, always focusing on efficiency, innovation, sustainability, and valuing people.

The company has four industrial complexes. The Boa Vista Unit, located outside the state of São Paulo, is the only one dedicated to the production of corn derivatives, such as ethanol, DDGs, and oil, in addition to producing ethanol and bioenergy from sugarcane.

The remaining units focus their operations on sugarcane, producing sugar, ethanol, and bioenergy. Notable among these is the São Martinho Unit in Pradópolis, São Paulo, recognized as the largest sugarcane processor in the world. Completing the company's portfolio are the Iracema Unit (UIR) in Iracemápolis, São Paulo, and the Santa Cruz Unit (USC) in Américo Brasiliense, São Paulo. READ MORE

Excerpt from Reuters/Successful Farming: A unit of U.S.-based grain merchant Cargill will build a corn ethanol plant adjacent to its sugarcane plant in Brazil’s Center-Western state of Goias, the company said on Friday.

Agribusiness portal AgFeed reported the plans first. Cargill confirmed the business decision but declined to disclose other details of the project.

Cargill already produces ethanol from sugarcane and corn in Goias. The company’s biofuels subsidiary in Brazil is called Cargill Bioenergia.

The new plant’s construction is another step by Cargill to grow production of biofuels in Brazil, a global grains powerhouse.

In February, Cargill agreed to purchase a 50% stake in SJC Bioenergia, giving it control of the company’s assets in the towns of Quirinopolis and Cachoeira Dourada, both in Goias. READ MORE