Archer Daniels Midland in $500 million ethanol JV with Brazil's Grupo Cabrera

With the world contemplating the consequences of declining fuel reserves and the detrimental effects of global warming, green energy in the form of biofuels has got a fillip in recent times.

Nowhere is this more evident than in Brazil, where companies like Grupo Cabrera play a major role in producing ethanol from sugarcane.

Now one of the major food processors Archer Daniels Midland Co (ADM) is looking for other opportunities to expand its biofuels business in Brazil after announcing plans to enter the country's ethanol market for the first time.

The US agribusiness group announced plans yesterday to build two mills producing sugar-cane-based ethanol in partnership with Grupo Cabrera, which already operates in 10 Brazilian states.

ADM operates more than 270 plants worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial and animal feed markets worldwide, having started in 1902 as a linseed crushing business when George A Archer and John W Daniels began their linseed crushing business. In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company, and the Archer-Daniels-Midland Company was formed and has added a new business every decade since then.

The partners will invest an initial $500 million over seven years to produce an estimated 70 million to 90 million gallons a year of the renewable fuel. ADM is contributing $370 million and production is targeted for domestic consumption.