Noble Group has entered into agreements to acquire Catanduva and Potirendaba sugar mills in Sao Paulo, Brazil for US$950 million. The acquisitions will propel the Group into the top tier of sugar cane milling companies globally, taking the combined annual potential crushing sugar cane capacity that Noble will control to 17.5 million tonnes.

The two mills that are being acquired, Catanduva and Potirendaba, are fully operational. They are 50 kilometers apart from each other, and are strategically located just over 100 kilometers from Noble’s established UNP facility. Both the facilities being acquired have good access to domestic and foreign markets and are located close to competitive rail infrastructure. The mills have a strong operational track record and are active in both domestic and export markets, stated the firm’s press release.

Funding of the acquisition will be from existing resources. Of the two mills being acquired, Catanduva has a nominal sugar cane crushing capacity of 4.6 million tonnes and Potirendaba crushes 3.4 million tonnes per annum. Combined, it is envisaged that at full production these two additional mills will themselves produce 600,000 tonnes of sugar, (crystal, white refined and VHP), 300,000 cubic meters of ethanol and supply over 300,000 MWH to the grid.

Catanduva also has a fully operational sugar refinery that allows for the production of Crystal Sugar and Refined White Sugar, products which attract premium pricing. This capability has facilitated the development of branded retail sugar products, first launched in the South and South East regions of Brazil in 2004, and Noble has also acquired these brands along with the accompanying domestic distribution network.

In combination with Noble’s Meridiano facility, construction of which is making good progress, the physical proximity of the four mills that Noble will own after this acquisition  offers  significant economies of scale and ensures that it will be able to fully exploit the advantages offered by the Group’s newly completed export terminal in Santos.

Noble's two existing mills have a nominal annual crush capacity of 9.5 million tonnes of cane per annum and can produce approximately 740,000 tonnes of sugar, 300,000 cubic metres of ethanol per annum, while also being capable of supplying 450,000 MWH of surplus electricity to the grid.

Noble Group is a market leader in managing the global supply chain of agricultural and energy products, metals and minerals. The Group operates from over 150 offices and plants in 38 countries, employing approximately 70 nationalities.

20 Dec 2010.