Marubeni biofuel venture advances

Marubeni Corp. said Thursday it will set up a joint venture with a Brazilian grain trader to produce and market soybean-based diesel fuel in the South American country beginning next year.

The trading house seeks to benefit by partnering with Agrenco Group as demand grows for biofuel -- particularly in Europe and Brazil.

Demand is expected to rise in Brazil as gas oil must be blended with biofuel from 2008.

Marubeni will invest $ 40 million (about 4.8 billion yen) in the joint venture Agrenco Bio-Energia Ltda. to hold a 33.3 percent stake. The Brazilian company will hold the remainder.

The new unit will be able to produce 400,000 tons of biofuel per year.