(Photo: The chairman of ACA, Claudio Soumoulou (standing left) and Governor of the Cordoba Province, Miguel Schiaretti (right), during the announcement of the plant enlargement)
Last week, the largest farmer’s cooperative in the country, ACA, announced the expansion of its ethanol corn-based plant in Villa Maria, Córdoba Province. Through a US$53 million investment, the cooperative will enlarge 40% its output capacity. “We will pass to produce 700 cubic meters per day, from the current 500m3”, Victor Accastello, high official from ACA, explained in dialogue with www.eFarmNewsAr.com.
“We want to accompany the expected growth of the gasoline domestic consumption around 4 or 5% per year, and a probably increasing of the mandatory blend from the current 12% to 15, 18 or maybe a 20 percent”, Accastello added.
According to the Energy Secretariat statistics, ACABio (the name of the company) produced 153.000 cubic meters of ethanol during 2017, and 141.000 m3 between January and October 2018, showing a 12% increasing over a year basis.
This increment it was reached despite the negative business indicators for the ethanol industry. The RIA Consultores’ weekly report remarked how the relationship between ethanol and its raw material, the corn, has been deteriorating in the last years, due to the changes in the Governmental biofuels policy.
In 2015, each liter of bioethanol was able to purchase 6.6 kilograms of corn. After the assumption of President Macri to the Government, in 2016 this ratio dropped to 4.9, and continued dropping until 3.8 in the current year.
“Clearly, this affected the operation profitability. The 85% of ACAbio gross income comes from ethanol; DDGS (dry destilled grains), carbon dioxide and oil contribute with the remaining 15 percent”, Accastello explained to www.eFarmNewsAr.com.
The fact is that now the liter of corn-based ethanol rounds US$0.50, when the average price (in dollar) in 2015 reached 80 cents.
“The point is that the corn-based ethanol is competitive not only against the imported one, but against the gasoline too”, Accastello stressed.
The executive thinks that they are able to compete in a non-regulated price scheme for supplying ethanol to oil companies. It’s probably that an open market will establish since 2021. But at the same time, Accastello claims for maintaining the mandatory blend in a higher level than now, perhaps from 15 to 20 percent.
But the low ethanol price conspired against a larger investment in the ACABio plant. “Originally the plan was to double the production capacity of our plant. Due to the changes in the biofuels policy, we decide only expand it 40 percent”, Accastello said.
Furthermore to an increase in the mandatory blend, and the natural growth of the gasoline demands, the arriving of the Flex engines open a new possibility to expand the ethanol production.
Finally, Accastello explained that they hope the reform of the plant will be concluded at the end of 2019.