Brazil's largest bioethanol producer, Raizen SA, is considering the possibility of selling part of its assets and suspending projects to build new plants in an attempt to reduce debt after a sharp increase in the cost of loans in Brazil. This is reported in a press release from Raizen.
Raizen is a joint venture between the Brazilian conglomerate Cosan SA and the British oil and gas company Shell Plc.
The management of Raizen is reviewing its strategic plans against the background of a sharp increase in the key interest rate by three percentage points by the Central Bank of Brazil from September 2024 in order to reduce inflation. In 2024, Raizen shares fell by 54%.
It is not yet known which assets will be put up for sale, but the company's main activities, including the production of sugar, ethanol and fuel in Brazil and Argentina, will remain owned by the company. In addition, Raizen intends to reduce the staff of the sales department.
At the same time, the company will continue to build two second-generation ethanol plants and suspend the implementation of previously planned new projects.
Raizen is a Brazilian manufacturer of bioethanol and sugar. The company operates a network of gas stations under the Shell brand and provides services in the pharmaceutical and food sectors. The headquarters is located in Rio de Janeiro (Brazil) with offices in Argentina, Uruguay, Paraguay, Bolivia and the United Kingdom.
Raizen's net loss in the fourth quarter was 2.6 billion reais ($456 million) due to a sharp drop in sugar production as a result of the drought and losses under sugar and ethanol futures contracts.
Shell is the largest British oil and gas exploration and refining company. The company manufactures and imports fuels, chemicals, and lubricants, and operates a network of service stations. The headquarters is located in London (England).
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