India Interested in Investing in Brazil’s Ethanol Industry

India is interested in importing hydrated alcohol from Brazil to supply its fleet of vehicles, and also in purchasing equipment for the installation of plants, as the country produces large quantities of sugarcane. Brazilian businessmen in the sector attended the India, Brazil, South Africa Summit (Ibsa) in New Delhi, India, and initiated talks concerning sales of those products.

The information was supplied by the executive manager for foreign trade at the National Confederation of Industries (CNI), José Frederico ílvares.

"The Indians use 5% of alcohol in gasoline and might increase the proportion to 10%. That alone would double alcohol consumption overnight, creating an excellent opportunity to Brazil" said ílvares. The use of 5% ethanol in gasoline by the Indians, which is mandatory in 9 out of 29 states, was the result of a technological cooperation agreement signed by Brazil and India in 2003.

ílvares recalled that it is quite probable that Indians will increase the amount of alcohol in gasoline up to 10%, because that level of concentration does not require engines to be modified. There are no alcohol-fueled engines in India and, also because of that, the country is interested in the biofuel technology widely used in Brazil.

According to ílvares, at first, the Asian country will need to increase its ethanol imports, because its domestic production is not enough to fuel the entire fleet. "However, given the fact that the country produces large volumes of sugarcane. At a second phase, Brazil may export several plants to us," said ílvares, by telephone, from New Delhi.

Another possibility, according to the executive manager of foreign trade at CNI, is for Indians to start investing in the sector in Brazil.

"Local businessmen asked many questions in that respect. It is a possibility, because Brazil offers competitive advantages for ethanol manufacturing," he said.

The plan is to gain better knowledge of the Brazilian technology and then develop it in India. In March, investment of US$ 600 million by companies Bharat Petroleum, Hindustran Oil and India Oil were announced to the Brazilian government by the Indian minister of Oil and Gas, Murli Deora.

According to ílvares, Indians also showed interest in learning more about the use of residue from processed sugarcane for electric power generation. "They were surprised upon learning that Brazil generates lots of power at sugarcane plants using biomass, and integrates that power into the electric system."

CNI