Sao Paulo, Brazil-based Cosan, the world’s biggest sugar and ethanol producer, made an initial public offering on the Bovespa Stock Exchange last month. Brazilian-produced ethanol is expected to gain increased penetration in global markets as a result of efforts by the World Trade Organization to liberalize trade. Brazil won its case against European Union sugar subsidies at the WTO earlier this year. Meanwhile, there is a trend toward greater consumption of renewable energy, including ethanol.
Cosan was expected to raise more than $300 million in the IPO, which began trading after Global Finance went to press. Morgan Stanley and Credit Suisse First Boston coordinated the offering. Cosan’s 13 mills and sugar-growing operations are located in the central-southern region of Brazil, which has some of the best cane-growing land in the world in terms of soil and climate. The company makes use of efficient farming practices on its large-size cane farms, according to the International Finance Corporation, which has invested in a project to support Cosan’s growth strategy. Cosan began operating in 1936 with one sugar mill and has grown mostly by acquiring and consolidating existing mills.