(Corrects second and third paragraphs to clarify the assets
that will be sold while the mill will cease operating)
* 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 assets at 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, i ncludes t he sugar cane plantations, a
sugar warehouse and other agricultural assets in Ja boticabal in
the interior of São Paulo state, b ut not the sugar cane mill
itself. The mill will stop operating and its workers will be
transferred to other Biosev units, a company statement said.
The sale includes all the cane supply agreements for the San
Carlos mill, while São Martinho agreed to supply Biosev with one
million tonnes of sugar cane in the first year.
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 3.1 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 reais)
(Writing by Caroline Stauffer; Editing by Bob Burgdorfer)