Cargill and Brazilian sugar producer Grupo USJ have set up their planned joint venture in the South American country.

The two companies struck a deal in June to form the venture, which was yesterday (19 September) named as SJC Bioenergia. The venture comprises USJ's São Francisco and Cachoeira Dourada mills in the state of Goiás, The Cachoeira Dourada mill is in the process of being built.

By 2013, SJC is expected to have an installed capacity to process up to 7.5m metric tons of sugarcane.

However, SJC director Ingo Kalder said the venture planned to expand its capacity.

"Our plans to expand the Cachoeira Dourada and São Francisco mills in the following years will enable us to double crushing capacity to 15m metric tons of sugarcane," Kalder said. "We will do this by adding modules of 2.5m metric tons every two years. This will place SJC Bioenergia among the largest producers of sugar and ethanol in Brazil."

The two companies will each hold a 50% share in the joint venture. USJ will also inherit sugarcane supply agreements held with local farmers who supply its two mills.

In addition to sugar and ethanol, SJC will also generate electricity from sugarcane bagasse. USJ is one of Brazil's largest producers of sugar and ethanol.

According to USJ president Hermínio Ometto Neto, one of the deciding factors to select Cargill as its partner for the venture was the "alignment of organisational values between the two groups, in addition to the technical experience".

"Grupo USJ has great expertise in the sugar and energy industry, and its mills are based in the most promising region for sugarcane production in Brazil. And Cargill is one of the world's largest food companies and one of the most important sugar traders," Neto said.