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Bunge Ltd explores options in biofuels investments

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October 25
1:45 AM 2013

Four years ago, Bunge Ltd had bought five sugar mills in Sao Paulo, Brazil for USD1.5 billion, the purchase was considered the crown jewels of the biofuel undustry. Now, the mills have become hard to dispose assets at a time when margins have fallen below projections and continued weak prices have depressed the overall value of the said assets.

Now, Bunge Ltd's CEO had announced he would be exploring options, including the sale of the loss generating business. This comes after the firm had reported a USD137 million quarterly net loss from its sugar production as poor weather and low prices hounded the markets. 

This is not just an isolated case, as the cost of doing business in Brazil have risen as the biofuel industry declined. Now, after four years of oversupply couple with weak prices have hurt overall margins, which has exempted no one in the induatry. Nearly 40 smaller mills throughout Brazil's south central region have been sold or closed down in the past few years due to losses and debts. 

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