Shell and Cosan have reached an agreement to strengthen the Raízen joint venture in Brazil, through a change in its contractual structure. The partners have agreed to remove the mutual time-bound buyout options included in the original joint venture agreement, signed in June 2011, and in doing so have transformed Raízen from a temporary to a permanent joint venture.
John Abbott, Shell’s Downstream Director, said: “Low-carbon, sustainable biofuels play an important role today and will be required long term for heavy duty and long distance transport. We are pleased with Raízen’s strong performance. This commitment reaffirms the stability of Shell and Cosan’s partnership, and our shared view of the long term objectives and value of the business.”
Marcos Lutz, Cosan CEO, stated: “Transforming Raízen into a permanent joint venture strengthens the partnership we built with Shell over the last five years, while paving the way to continue our successful journey in Brazil. Our partnership with Shell is instrumental to being recognized for excellence in the development, production and marketing of sustainable energy.”
Raízen is the world’s largest individual producer of sugar cane, producing more than four million tons of sugar, more than two billion litres of ethanol and 2.2 gigawatt hours of cogenerated energy in 2015. It also operates a network of more than 5,800 Shell-branded service stations in the country. The combination of Shell and Cosan’s retail experience and technical expertise have contributed to Raizen’s strong financial and operational performance since the venture was established.