Adecoagro acquires Caarapó factory to expand S&E cluster in Mato Grosso do Sul
South American agribusiness Adecoagro announced on Monday that it has reached an agreement to acquire the Caarapó plant in the Brazilian state of Mato Grosso do Sul to expand its local sugar, ethanol and energy industry cluster. Adecoagro said in a press release that the Caarapó plant is currently idle, but has a daily processing capacity of 20,000 tons of sugar cane, and is equipped with power generation facilities and ethanol distillation production lines. The acquisition price is approximately US$120 million and is expected to close in the fourth quarter of 2026. Adecoagro's CEO said in a statement that the acquisition is in line with the company's strategy to expand production capacity in core production areas and improve operational efficiency. Through renovation and upgrades, the plant is expected to resume operations in the 2027 crushing season, which will increase the company's total sugar cane crushing capacity in Mato Grosso do Sul by approximately 15%. Adecoagro has many years of operating experience in Mato Grosso do Sul. It owns multiple factories including Ivinhema, Angélica and Pitangueiras, which has created a certain scale effect. After acquiring the Caarapó factory, the company will be able to optimize its logistics network, realize equipment sharing and raw material deployment, and reduce unit production costs. Brazil is one of the world's largest sugar cane processing countries, and its sugar and ethanol industries play an important role in its energy structure. As global demand for renewable fuels increases Sugar prices remain high, and Brazil's sugarcane processing industry is experiencing a new round of capacity expansion. Adecoagro estimates that the Caarapó plant renovation project will require approximately US$80 million in additional capital investment for equipment maintenance and environmental facilities upgrades. The company plans to fund the project through its own funds and long-term loans, and it is expected that the company's net debt to EBITDA ratio will remain within a controllable range after the acquisition is completed.