Morgan Stanley eyes to own Brazilian ethanol plantJuly 10th, 2008 - 6:31 pm ICT by IANS
Sao Paulo, July 10 (IANS) US investment banking giant Morgan Stanley has said it wants to expand its presence in the alternative fuel industry from trading to production and is negotiating to buy stake of a planned sugarcane-based ethanol plant in Brazil. Morgan Stanley wants to have production capabilities in addition to dealing in the fuel through its commodities trading desk, EFE reported Thursday quoting business website Valor Online.
The investment bank will have a 40 percent stake in the planned ethanol plant, with Brazilian and other foreign partners owning the rest.
Half the ethanol traded by Morgan Stanley is produced in Brazil and the output from the planned plant, whose cost and expected completion date have not been revealed, will be shipped to the firm’s facilities to be blended with gasoline for sale in the US and Europe.
Ethanol, made from crops such as sugar cane and corn, is basically grain alcohol. The clean-burning fuel is usually mixed with unleaded gasoline and can be pumped into vehicles at existing service stations.
Critics contend that food crops are being diverted to ethanol production around the world, causing food shortages and leading to price spikes that affect the poorest people in society.
Brazil, for its part, argues that barely one percent of its farmland is used to grow sugar cane for ethanol production and it has used the clean-burning fuel to replace 50 percent of its gasoline consumption.