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 Colombian sugar miller sweet on biofuels

19/05/2008 (Checkbiotech), Lima - Colombian sugar and palm oil producer Manuelita aims to consolidate its expansion in Latin America and become a significant regional producer of biofuels, the group's president said on Friday.

Manuelita, which already distills ethanol, recently bought 20,000-hectares (49,000-acre) in northeastern Colombia to expand its palm oil plantations, chief executive Henry Eder said.

Vegetable oil prices have soared in recent years, partly due to increased demand for so-called greener fuels. That has encouraged palm oil cultivation in the South American country, which Eder said is the world's No. 4 palm oil producer.

Colombia's palm oil output is set to rise to 920,000 tons this year from about 775,000 tons in 2007, according to Hamburg-based oilseeds analysts Oil World.

The government is promoting a 60 percent increase in the country's palm area from 2005 levels, and much of the additional output is expected to be absorbed by a growing biodiesel industry.

Manuelita, Colombia's No. 2 sugar producer, also operates in Chile, Peru and Brazil -- the world's top ethanol exporter.

"Our strategy is to look at the whole of Latin America and strengthen our position in those countries where we're already operating," Eder told Reuters.

"We're looking at possible opportunities in other countries but we haven't taken any decisions. We want to be careful," he said in Lima during a summit of business leaders from Europe, Latin America and the Caribbean.

Manuelita's sugar output runs at about 370,000 tons per year and about 20 percent of that is used in its ethanol distillery.

It also sees growth in biodiesel.

"We've just bought 20,000 hectares ... to grow African palms and we hope that within 10 years this area will start producing. The project costs about $100 million, it's a big project," Eder said.

"This is a crop that's expanding in Colombia, and five biodiesel plants are being built. One of them is our own and we're hoping to start production next January," he added.

Eder said the group is considering expanding into Brazil and Peru because "there's no more land available" in Colombia's Cauca valley, where most of its sugar plantations lie.

In Brazil, Manuelita holds a 25 percent stake in the Vale do Parana sugar refinery, due to enter production in July. The rest is held by Brazil's Unialco and Guatemala's Pantaleon.

Meanwhile, the firm controls Peruvian sugar refiner Laredo, which has an output of about 600 tons per day, and farms cane on irrigated costal land that used to be leafless desert.


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