ADM goes to Brazil

I usually try to focus on new companies in this blog. It's where the greatest amount of innovation is taking place, and (frankly) I find the topic more interesting.

But when global agriculture heavyweight ADM says it's headed to Brazil to enter the sugar cane market, it's worth taking notice. According to the Wall Street Journal, the company is exploring different entry strategies, from greenfield development to acquisitions. This could include the outright purchase of Cosan, Brazil's largest sugar and ethanol producer (market capitalization of about ~ $3.5 billion USD). That's about all ADM executives are saying at this point.

If, as expected, ADM uses Brazil investments to serve as a base for exports to the US, has the potential to radically reshape the nascent ethanol market (which in the US is so heavily linked to corn.) That, and it's going to make everyone who has invested so heavily into corn-based ethanol a little nervous.