BRAZIL: Adecoagro mulling sugar expansion

Published: 03/20/2017, 2:04:14 PM

Adecoagro revealed that executives had been "travelling all around" southern Brazil investigating potential sugar acquisitions, and was mulling growth in the likes of rice, dairy and beef, after slashing its debts in a "milestone" year, according to Agrimoney.

Mariano Bosch, chief executive of the South American farm operator - of which George Soros's Soros Fund Management is a major shareholder - said that it had been looking at "many, many mills that are for sale in Brazil" with a view to expanding a sugar and ethanol division which had become Adecagro's "most important".

"We've been traveling all around the southern areas," Bosch told investors, in answer to a question of whether Adecagro was interested in Brazilian cane processors said to be on the market.

However, he added that "we are only interested in the ones where we really believe we can be the low cost producers or within the low cost producers", stressing too the need for potential acquisitions to have easy access to cane to crush.

"For us, one of the key things on understanding this business is the sugarcane availability. "We've seen many mills for sale where that was a problem."

Adecoagro - which has also unveiled plans for expanding its existing Brazilian cane crushing capacity by 3.0 million tonnes to 13.0 million tonnes, to ease "bottlenecks" - is considering investing in Argentina too, most likely for developing operations in sectors in which it already operates.

"All the changes" in Argentine agriculture brought in by the government of Mauricio Macri, elected in late in 2015, are "generating some opportunities", Bosch said.

"The main things we are looking at in Argentina... is on the rice business where we see opportunities to continue growing with the same business where we are," and which currently grows the grain on some 40,000 hectares.