CerradinhoBio expands bet on corn ethanol

In the last crop year (2025/26), the company posted a 90% increase in net income, to R$372.7 million. Of the company’s net revenue for the crop year, R$4.3 billion, up 16%, half came from corn ethanol sales alone, which rose 19%. The corn ethanol business, including DDG and corn oil, already accounts for 70% of results.

Profit growth last crop year was supported by both the corn ethanol and sugarcane businesses, as CerradinhoBio increased sugar production following capacity investments. In the corn ethanol business, the highlight was gains in operational efficiency, CEO Renato Pretti told Valor.

There was also a sharp increase in revenue from VHP sugar, up 176% to R$898 million, resulting from the investment in expanding the plant in the previous crop year. Even so, CerradinhoBio continues to bet on ethanol—and only from corn.

In early June, the company began operating an expansion of its corn ethanol plant in Chapadão do Céu. After a R$140 million investment in the expansion project, the unit now has the capacity to process 1.2 million tonnes of corn a year, up from 800,000 tonnes previously.

Pretti expects the corn business’s share of results to be even larger this crop year. “In five years, we changed the company’s profile,” he said. With a flex plant in Goiás and a dedicated corn ethanol plant in Maracaju, Mato Grosso do Sul, CerradinhoBio is already the third-largest corn ethanol producer in Brazil, behind Inpasa and FS.

For the CEO, the market trend is that any expansion of ethanol supply in Brazil will come only through corn processing. “Corn ethanol is more competitive. The projects are leaner and more agile, and there is a good regional fit with the new agricultural frontiers,” he said. “A sugarcane greenfield project, by contrast, is expensive; I don’t know whether the numbers work. And it is not as agile,” he said.

CerradinhoBio already has plans for further expansion in the business. The company has another expansion project for the Chapadão do Céu corn ethanol plant close to being confirmed, and it is also beginning to assess a future expansion of its dedicated plant in Maracaju. In that case, however, capital demand is expected to be higher, requiring more caution in an environment where interest rates remain high, he said.

According to the executive, the expansion plans are being carried out with the necessary caution. When CerradinhoBio invested more than R$1 billion in the Maracaju plant, the initiative created an imbalance in its financial metrics. It forced the company, two years ago, to negotiate with banks and holders of Agribusiness Receivables Certificates (CRA) for permission to breach leverage metrics while continuing to meet its payment obligations on time.

That squeeze, however, is behind the company. In the 2025/26 crop year, CerradinhoBio posted EBITDA of R$1.5 billion and net debt of R$2.1 billion. In other words, the company ended the season with leverage of 1.4 times, well below the tight levels seen in the middle of the 2024/25 crop year.

One strategy to keep investing while preserving the capital structure is to seek cheaper financing sources. For the recently completed expansion in Chapadão do Céu, the company used funds from the Brazilian Development Bank (BNDES) Climate Fund.

The company’s expansion into corn ethanol has also meant that CerradinhoBio now needs to turn to alternative biomass sources to generate energy, but the plan is to reverse that. Today, 40% of the energy consumed in production already comes from wood chips. “We have been working on an energy-efficiency project to eliminate the need for alternative biomass,” he said.

By Camila Souza Ramos, Globo Rural — São Paulo

Source: Valor International

https://valorinternational.globo.com/