Brazilian biodiesel producer Binatural is set to increase its annual output by 20%, aiming to reach 650 million liters by 2026, according to CEO Andre Lavor. In an interview on Wednesday, Lavor emphasized the necessity to expand the firm's capacity to fulfill the escalating demand for cleaner energy sources, expressing hope that government support, including potential foreign investments, will contribute to the sector's growth.
Lavor highlighted the sector's robust growth projections, stating that it should attract attention and investments from various sources. The Brazilian government is considering raising the mandatory biodiesel mix in diesel to 15% from the current 12%, effective in 2024, pending a decision by the National Energy Council next week.
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Optimistic about the potential increase, Lavor noted that a 1% addition in the biodiesel mix translates to approximately 1 billion liters more in consumption. Binatural anticipates a combination of increased sales volumes and improved prices to boost its revenues by around 30% to 3 billion reais ($605 million) next year.
While Brazil predominantly produces about 70% of its biodiesel from soybeans, Binatural's unique business model focuses on alternative sources, including animal fat and recycled cooking oil. The company plans to outperform the industry by utilizing about 73% of its capacity next year, projecting a production of 440 million liters.
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With Brazil's biodiesel industry operating with an average idle capacity of 50%, Binatural's strategic plans set it apart from the industry norm. However, potential policy changes, such as an increase in the mandatory mix to 25% by 2036, could necessitate more investment in soybean crushing.
The biodiesel sector in Brazil has witnessed recent mergers and acquisitions, with U.S.-based Cargill acquiring Granol, a significant soy crusher and biodiesel firm. Binatural, too, has drawn interest from potential partners, although Lavor declined to provide details, emphasizing a focus on long-term objectives rather than short-term deals.
