Dedini SA Industrias de Base, the Brazilian company that builds ethanol mills, has received 20 requests to supply quotes this year to companies considering new production facilities as the industry seeks to meet rising demand for the renewable fuel.

The company provided five quotes to companies last year for ethanol projects in Brazil, Sergio Leme, president of Piracicaba-based Dedini, said today in a telephone interview.

Brazil doesn’t have enough mills to meet demand from a growing fleet of flex-fuel cars that may run on pure ethanol or standard gasoline, he said. Investments in new sugar-cane plantations and the mills that produce fuel from the crop plummeted following the 2008 financial crisis .

“The market was frozen” for the last two years, he said. “At least five of those quotes will turn into contracts” by the end of the year.

Brazil has mills online to crush about 700 million metric tons of cane a year, and needs about 800 million tons of capacity to meet demand, he said.

Dedini expects to sign its first agreement for an ethanol plant since 2009 after July and generate 1 billion reais ($544 million) of revenue this year, up from 800 million reais in 2011, he said.

“We need 100 mills built through 2020 to satisfy the market,” he said.

source: bloomberg


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