Southridge to build 5 Mgy sugarcane ethanol plant in El Salvador; firm will also re-export Brazilian ethanol to US to bypass tariff

In El Salvador, Southridge Enterprises will construct a 5 Mgy ethanol plant in El Salvador. The company said that it will import ethanol from Brazil, dehydrate it, and reexport the fuel to the United States, supplementing this activity with actual production at the plant from more than 4500 acres of sugar cane cultivation. The plan takes advantage of the Caribbean Basins Initiative trade pact which permits El Salvador to export ethanol to the United States tax-free, vs. the 54 cent per gallon tariff on direct exports from Brazil.

The Miami Herald recently published a roundup of Latin American efforts to increase biofuel production. The article tracked export efforts by Jamaica, Trinidad and Tobago, Costa Rica and El Salvador to import sugar ethanol from Brazil, process it and ship to the US because CAFTA regulations permit this duty-free, as opposed to the 54-cent-per-gallon tariff imposed on direct imports from Brazil into the US.

Caribbean and Latin American government officials, meeting in Miami last month, said that ethanol would provide a means of reviving the Caribbean sugar industry which had been crushed by competition from Brazil. El Salvador delegate told a regional conference that his country had 741,000 acres formerly used for sugar cane that was not currently under production.

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