FS, one of Brazil’s largest corn ethanol producer, is taking a new step toward completing its business plan to build six corn ethanol plants in Mato Grosso.
The company announced Tuesday that it has started construction on its Querência plant, its fifth in the state. The information was included in the management report accompanying its fourth-quarter earnings for the crop year.
With investment of 2 billion reais, the unit will have capacity to process 1.3 million tons of corn and produce 580 million liters of ethanol a year. The company expects construction to be completed by July 2027, when operations are scheduled to begin.
FS also said its Campo Novo do Parecis unit, currently under construction, had its capacity increased from 540 million to 580 million liters of ethanol and to 1.3 million tons of corn processing, with no material impact on investment.
On Monday, BNDES announced the approval of another credit line for FS, totaling 500 million reais with a 15-year term, to support construction of the Campo Novo unit.
“With both plants in operation, FS will have installed annual production capacity of approximately 3.8 billion liters of ethanol,” the company said in the management report.
The announcement comes about a month after FS announced the sale of a 40% stake to Amaggi, a major agricultural and trader group. Despite the financial boost the transaction will give FS, which will receive $100 million from Amaggi after the deal is approved, expected next month, the decision to build the Querência unit was made before the transaction, a source told The AgriBiz.
E32 Is Coming
Despite pressure on ethanol prices, driven by increased supply of both sugarcane- and corn-based biofuel, the demand outlook is favorable for the coming months.
In the short term, CNPE, Brazil’s National Energy Policy Council, is expected to announce an increase in the ethanol blend in gasoline to 32% from the current 30%. The meeting to discuss the issue is expected to take place at the end of this month.
During AGRO 360º, an event held last week through a partnership between The AgriBiz and Brazil Journal, FS Chief Executive Officer Rafael Abud highlighted the potential for corn ethanol demand from the aviation, maritime transport and heavy equipment sectors.
A pioneer in corn ethanol production in Brazil, FS currently operates three plants in Mato Grosso: Lucas do Rio Verde, Sorriso and Primavera do Leste. In addition to the two plants whose construction has already been announced, the company has another in its pipeline, in Nova Mutum.
27% Margin
In the 2026 crop year, which ended in March, FS’s net income rose 71% to 1.6 billion reais. Ebitda climbed 31% to 3.5 billion reais, with a margin of 27.4%, reflecting higher sales volumes and better prices for ethanol, DDG and corn oil. Net revenue increased 21% to R$13 billion.
Net debt ended the fourth quarter at 8.9 billion reais, up 32% from the same period a year earlier. Leverage, however, remained virtually stable, reaching 2.53 times at the end of the period.
This month, FS completed the issuance of its first offshore syndicated loan, totaling $360 million with a three-year term.
