Ethanol boom brings change to Brazil cane growers

By Inae Riveras

SERTAOZINHO, Brazil (Reuters) - At the start of this year's cane harvest at the Sao Francisco ethanol mill, workers gathered to ask God for protection and a good crop.

It was a traditional Roman Catholic mass, held inside the mill's main building amid the sweet smell of sugar cane.

Around 150 employees and their relatives surrounded an imposing altar. The offerings included a bottle filled with ethanol, a wooden toy truck and a cane cutter's machete.

"It's a long tradition. Our industry has a family roots, we are Catholics as are many of our employees," said the mill's executive officer, Jairo Menesis Balbo. "We thank God for our production and ask Him help to start another one."

Nearby stood giant machines that are set to crush more cane than ever in the coming months to meet national and global demand for ethanol to fuel cars. Brazil is heading for a record sugar cane crop, with an expected cane output of up to 580 million tonnes.

A world leader in biofuels, Brazil has decades of expertise in using sugar cane to make ethanol for cars, in a process that is much more economically viable than using corn, the major ethanol feedstock in the United States.

Brazil launched a national program to stimulate consumption and production in the 1970s. Its most recent boost came in 2003, with the launch of flex-fuel vehicles, which can run on gasoline, ethanol or a mixture of the two. Ethanol consumption surpassed that of gasoline earlier this year for the first time in two decades.

But change is in the air as the ethanol boom attracts investors from all over the world and some fear old customs could fade away, along with traditional management models, as the industry is consolidated into fewer, bigger and vertically integrated companies.