Olam International, a global, integrated supply chain manager and processor of agricultural products and food ingredients, has entered into an agreement to acquire a sugar milling asset in Brazil.
Olam is to invest US$240m in its first sugar milling asset by acquiring Usina Açucareira Passos for US$128.8m and investing an additional capital expenditure of US$111.5m over the next five years to improve its agricultural (cane growing) and industrial (milling) capacity and efficiency.
UAP owns and operates a sugar mill located in Passos within the state of Minas Gerais in Brazil’s Centre South, the country’s second largest sugarcane growing area.
Its cane crushing capacity is 1.75 million metric tonnes per annum with an output capacity of up to 200,000 metric tonnes of sugar per year.
The additional capital expenditure of US$111.5m will be used to increase UAP’s own cane production capacity through the expansion of cane cultivation and additional renovation and refurbishment of agricultural equipment.
The investment will also be used to refurbish milling equipment and expand capacity from 1.75 million to 3 million metric tonnes per annum.
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