China Agri-Industries Holdings and China Petroleum & Chemical Corp (Sinopec) will join forces to build ethanol plants with capacity of as much as 1.2 million tonnes over the next five years that analysts expect to require more than three billion yuan of investment. China National Cereals, Oils & Foodstuffs Import & Export Corp (Cofco Group), the mainland's largest grain trader and processor, signed a strategic agreement with Sinopec to co-invest in biofuel and biochemical production to meet the nation's rising demand for clean energy, a statement posted on Cofco website said. Cofco said it would build with Sinopec one million to 1.2 million tonnes of grain-based fuel ethanol capacity in the next five years through its Hong Kong-listed unit China Agri, which raised HK$3.68 billion in a share offering last month. Analysts expect the project to cost more than three billion yuan, based on China Agri's spending on its new projects unveiled in its listing prospectus. The Cofco statement did not give financial details. China Agri said it would invest HK$2.8 billion to build four fuel ethanol plants mainly using corn as feedstock, in Guangxi, Hebei, Liaoning and Hubei provinces. Their total annual capacity will be 900,000 tonnes. The four plants are slated to begin production late this year and next. China Agri and Sinopec also planned to build 20 plants producing 100,000 tonnes of cellulosic ethanol a year, using non-grain as feedstock, the statement said. It did not give a timetable or the investment involved. Cellulosic ethanol, or cellanol, is produced from cellulose, a naturally occurring complex carbohydrate polymer found in plant cell walls. It is chemically identical to ethanol from other sources, such as corn or sugar, and is available in a wide range of biomass including waste from urban, agricultural, and forestry sources. 'Co-operation with Sinopec, the mainland's largest fuel distributor, will help China Agri to sell its products,' an analyst said.