(Corrects sale price to reais from dollars)
* Biosev trying to improve installed capacity at mills
* Brazil's second-largest milling group canceled IPO
By Fabiola Gomes
SAO PAULO, Dec 17 Biosev, the Brazilian sugar and ethanol unit of global commodities company Louis Dreyfus Corp, said on Monday it is selling its São Carlos plant to the São Martinho milling group for 200 million reais ($95.51 million).
The sale by Biosev, Brazil's second-largest milling group after Cosan, includes the plant as well as related agricultural assets and the surrounding sugar cane areas in Jaboticabal in the interior of São Paulo state.
Biosev's president said the company is trying to raise installed capacity at its existing mills at a difficult time for Brazil's sugar industry.
"We are trying to improve efficiency by selling assets that were not aligned with our strategy," Biosev President Christophe Akli told Reuters in a phone interview.
The company aims to increase installed capacity at its plants to 8 3 percent by the 2013/14 harvest, he said. In 2011/12 installed capacity was 70 percent after a weak sugar cane harvest in the world's largest producer of the sweetener.
The São Carlos mill that is being sold can crush 1.85 million tonnes of sugar cane per year, compared with the average of 3.5 million tonnes per year at Biosev's other plants.
Brazil's milling industry has been extremely fragile in recent years, with some 30 mills closing in the past year and a half. Biosev itself scrapped its plans for an initial public offering in August, citing growing market uncertainty locally and overseas. and
French company Louis Dreyfus was one of the first multinational groups to enter Brazil's cane sector, when it snapped up the ailing Santelisa Vale milling group in 2009 and renamed it Biosev.
($1 = 2.0941 Brazilian reals) (Writing by Caroline Stauffer; Editing by Bob Burgdorfer)