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Brazil's Potencial to get sales boost as biodiesel demand surges - VP
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Brazil's Potencial to get sales boost as biodiesel demand surges - VP
Mar 8, 2024 8:26 AM

SAO PAULO, March 8 (Reuters) - Brazilian family-owned

energy firm Potencial is poised to boost sales on growing demand

for cleaner energy sources such as biodiesel, Vice-President

Carlos Hammerschmidt said in an interview.

The company operates Brazil's biggest biodiesel plant with a

capacity of 900 million liters annually.

"We know there will be a peak of petroleum consumption in

2030," said Hammerschmidt, whose grandfather founded the firm as

a small gas station network in southern Brazil in the 1950s.

Last December, the Brazilian government rose a mandatory

biofuel mix into diesel to 14% and set March 2025 as the

deadline to raise it to 15%.

Potencial, which also keeps interests in fuel distribution

and logistics, is gradually modernizing its own truck fleet to

run on biodiesel.

As demand for cleaner fuels grows, Hammerschmidt predicts

overall group sales reaching 12 billion reais ($2.41 billion) in

2024, up from an estimated 10 billion reais for 2023.

Currently, biodiesel accounts for about 35% of Potencial's

revenues, he said.

The firm began producing biodiesel 12 years ago and is

currently investing 2 billion reais ($403.14 million) to build a

new soybean crusher to make soymeal and also soyoil, which will

used as a raw material to produce more biodiesel.

The new facility is being funded with Potencial's own cash,

the executive said.

Brazil's climate and abundant crops to make biofuels,

including soybeans for biodiesel and sugarcane and corn for

ethanol, are a magnet to deep-pocketed investors.

Foreigners including Cargill and China's Cofco

compete with Potencial in the biodiesel sector. To get a piece

of the action, multinationals have bought existing plants or

built them from the ground, like ADM did in Mato Grosso

state years ago.

Potencial's strong and debt-light balance sheet, which is

audited, makes it a prime candidate for a takeover.

"Every day someone knocks on the door saying: your company

is an acquisition target," Hammerschmidt said. But the company

is not for sale. "It's not only money that moves us. My dad

built this from scratch."

(Reporting by Ana Mano

Editing by Ros Russell)

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