Colombian group set to produce sugar-based ethanol in US

Houston (Platts)--19Apr2007

A Colombian group has expanded its operations from the Andes to the
Louisiana bayous to start up an ethanol plant using local sugar cane as the
feedstock.

The plant, which would have capacity to produce 22 million gallons of
ethanol annually, would be the first in the US to process ethanol made from
sugar syrup, said Alejandro Santacoloma, who heads Louisiana Green Fuels.

Santacoloma, whose family heads a Colombian investment group, Grupo
Andino, said that the plant would be built about 10 miles east of Lake Charles
at an estimated cost of $150 million and would be ready to start operations in
the fourth quarter of 2008.

Of that projected amount, $30 million has already been invested and the
group may look for partners in the venture, he added. The existing investment
includes costs for land and some machinery that is to come from India. The
company has been tapping engineers with sugar-based ethanol know-how from
Colombian producers.

The ethanol plant would be built next to a sugar cane processing plant
that produces syrup in Lacassine, Louisiana. The existing $70-million sugar
plant is run in partnership by area sugar growers with the Santacoloma group.

The plant includes a 7 MW generator fired by sugar cane residue after the
juice, or syrup, is extracted. Santacoloma's plan is to "use the same syrup to
distill into ethanol," he said.

The syrup processing plant was not running during a visit earlier this
month because it operates during the US sugar harvest season from September to
January.

Unlike the US, where most ethanol is produced from corn in the Midwest,
several countries in the world including one of the biggest ethanol producers,
Brazil, use sugar cane to produce the fuel.

Using the sugar cane crop to produce ethanol may be a good alternative
for US sugar cane growers to assure a market for their products, Santacoloma
said. Pending trade agreements could lead to more US sugar imports and having
a biofuel option creates another revenue stream for local sugar cane growers.
"Ethanol is the other way around," he said.

--Renzo Pipoli, renzo_pipoli@platts.com
--Robert Sharp, robert_sharp@platts.com