Alcogroup to acquire IGPC, the second largest Canadian ethanol producer

Belgium's Alcogroup is set to acquire Canada's IGPC in December as it seeks to diversify globally, citing unfavorable European market conditions.

IGPC shareholders approved the transaction after the EU Commission and Canadian competition authorities had already given the greenlight, Alcogroup said in a statement released Nov. 26.

With the acquisition of IGPC, Alcogroup will add 380 million liters (100 million gallons) of fuel-grade ethanol to its existing production capacity of 1 billion liters.

IGPC will be acquired by Alco Energy Canada, a subsidiary of Alco Energy, 60% controlled by Alcogroup and 40% by Groep Vanden Avenne Commodities. With Alco BioFuel in Ghent, Belgium; Alco Energy Rotterdam, the Netherlands; and now IGPC in Aylmer, Canada, Alco will produce 1.4 billion liters of fuel ethanol.

Charles-Albert Peers, Chairman of the Board, underlined the importance of investing outside Europe.

"The European ethanol industry is confronted with high energy and [emissions trading system] ETS costs hampering its competitiveness compared to US and Brazilian imports. Additionally, the EU regulatory environment is increasingly a constraint for our industry. I would strongly encourage a technology-neutral approach and the use of all available sustainable solutions to reach the goals of the Green Deal."

Platts, part of S&P Global Commodity Insights, assessed T2 ethanol at Eur646.25/cu m FOB Rotterdam Nov. 26, reaching a near four-week low, amid reports of healthy T1 imports. Market players anticipate record-high US imports next year.

"We are extremely pleased with this acquisition," said Thomas Viatour, newly appointed CEO of Alcogroup. "It enhances our geographical diversification and strengthens our position in the growing ethanol markets in North America and specifically Canada."