Cosan focuses on balancing returns on invested capital

Brazilian energy major Cosan, announced that it will outlay BRL2.4 billion (US$1.19 billion) in capital expenditure (capex) this year to help the company consolidate several recent mergers and acquisitions. Cosan CEO Marcos Lutz said that 50% of the firm’s capex would be allocated to its sugar and ethanol business. Cosan also announced a binding agreement for its US$1.7 billion acquisition from BG of a 60.1% stake in the Brazilian gas distributor Comgas. The acquisition came in at the heels of a partnership agreement earlier this year with the Anglo-Dutch energy giant Shell; the agreement involves Raízen, an ethanol production and distribution joint venture. During the past six months, Cosan also expanded its lubricant and sugar logistics businesses with acquisitions in several South American countries including Bolivia, Uruguay, Paraguay and Argentina. Lutz told investors, “Our main focus is to balance return on invested capital with growth in dividend yields, which will increase for the third consecutive year.” (May 31, 2012)