Reese Ewing and David Brough - Reuters, 8/6/2012
SAO PAULO/LONDON (Reuters) – Brazilian sugar cane mills are vulnerable to a wave of takeovers in which deep-pocketed groups devour fragile neighbors, while soft sugar and ethanol prices weaken small mills and make building new ones too costly, industry analysts said.
Although efficient smaller mills will survive, more of the world’s sugar production is likely to fall into the hands of large traders such as Bunge , Cargill and Louis Dreyfus . Oil companies including Brazil’s Petrobras and traditional sugar giants such as Cosan and France’s Tereos will also expand by way of mergers and acquisitions of smaller rivals.
Newcomers may also enter the Brazilian cane business, albeit late, as the industry positions itself for Asian-driven growth in sugar demand.
