Buenos Aires — Argentina's Bioethanol Rio Cuarto said Thursday it will seek financing to double its ethanol production from corn feedstock to 400,000 liters/d.
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The company, known as Bio4, wants sell $2.6 million in 18-month debt instruments denominated in dollars, according to a filing with the National Securities Commission.
The company, based in the corn-growing region of Rio Cuarto, Cordoba, plans to use the proceeds to expand its production capacity from a current 200,000 liters/d on a bet that demand will grow based on an increased blend in gasoline and a recovering economy, Bio4 president Manuel Ron told the Ambito Financiero newspaper.
"Our company is working with idle capacity today, but we are convinced that, in Argentina, as in other countries, the consumption of ethanol will grow," he said. "We want to be prepared for when this happens."
Ron could not be reached for further comment.
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Bio4, one of the country's biggest suppliers of corn ethanol to oil refiners for a 12% mix in gasoline, had planned to double capacity in 2017, but Argentina's financial crisis last year forced it to postpone the project as investment conditions became harder and gasoline sales dropped.
Indeed, gasoline sales fell 8.3% year on year to 153,571 b/d in November, pushing down ethanol consumption 8.5% over the same period, according to the latest data from the Energy Secretariat.
The peso's exchange rate with the dollar, however, stabilized in late 2018 after a more than 100% devaluation pushed inflation to nearly 50% that year, causing the economy to contract around 2.5%.
While the economy is poised to shrink another 1.2% this year, it should recover by 2.5% in 2020, according to a central bank survey of economists.
In addition, Argentina's government has said it wants to increase the ethanol blend in gasoline to 20% or more, but has yet to provide a time line to do this.
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