SAO PAULO, Jan 15 (Reuters) - Raizen, the biggest sugar andethanol producer in Brazil, said on Thursday it will stopproduction at its Bom Retiro mill in southeastern Brazil for twoyears because severe drought had caused a shortage of cane.
A joint venture between Brazil's Cosan and RoyalDutch Shell, Raizen plans to use nearby mills in theinterior of Sao Paulo state to crush cane that would normally beprocessed at Bom Retiro.
A Raizen representative said it was no longer economicallyviable to keep the mill running, especially with low globalsugar prices. She said there would be no impact on Raizen'sbalance sheet because the mill is being suspended and notclosed.
Since 2008, some 80 cane mills in Brazil have shut down and67 went bankrupt because of lower sugar prices and shrinkingprofit margins. Nine others could close in 2015, according toindustry association Unica.
Raizen said 250 workers at the mill would be laid off and506 others would be relocated. With Bom Retiro's productionhalted, the company will operate with 23 mills for the next twocrop years.
Raizen produces some 2 billion liters of ethanol and 4.5million tonnes of sugar each year. (Reporting by Roberto Samora; Writing by Caroline Stauffer)
