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Brazil To Start Up To 30 New Ethanol Prod Units This Year

RIO DE JANEIRO (Dow Jones)--Brazil will bring on stream 25 to 30 new ethanol production units this year, compared to around 20 in 2007, Alfred Szwarc, a director of Brazil's Sugar Cane Producers' Association, Unica, said Tuesday.

Speaking at the Rio Oil & Gas conference, Swarz said the accelerated expansion is a response to rising domestic demand as the country's flex-fuel car fleet grows.

Automakers will produce 2.4 million of this type of vehicle, capable of running on either gasoline or ethanol this year, and flex-fuel vehicles should account for 50% of Brazil's automobile fleet by 2012.

Brazil will see ethanol output rise 27% to 24.3 billion liters for the 2008/2009 harvest, according to Unica forecasts.

New initiatives, such as the introduction of flex-fuel motorcycles, will mean demand continues to grow in the future.

Other upcoming projects include flex-fuel buses, trucks and stationary engines. It may also be used in boilers and furnaces, as a chemical feedstock for bioplastics and hybrid fuel cells.

Electricity generated from sugarcane bagasse totaled 1,800 average megawatts or 3% of Brazil's consumption in 2007/2008. This will grow to 14,400 megawatts or 15% by 2020, said Szwarc.

Unica represents 116 sugarcane mills, which are responsible for 60% of Brazil's sugar and ethanol production.

-By John Kolodziejski; Dow Jones Newswires; 5511 8193 5722; john.kolodziejski@dowjones.com

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(END) Dow Jones Newswires

September 16, 2008 17:32 ET (21:32 GMT)


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