Orlando González

Ricardo Pinto

January/2012

THE FIFTH LARGEST COUNTRY IN THE WORLD 3.3 X 106 square milles

BRAZIL COVERS 47% OF SOUTH AMERICA

FEDERATION WITH 26 STATES , 5 REGIONS

BRASILIA IS THE NATIONAL CAPITAL

POPULATION : 191 MILLION

Sources: USDA and MAPA

2009 RANKING: BRAZILIAN PRODUCTION AND EXPORTS

Exports

US$ Billion

Sugar 1st

1st 124 8.378

Coffee 1st

1st 81 3.762

Orange Juice 1st

1st 75 1.619

Soybeans 2nd

2nd 46 11.413

Beef 2nd

1st 142 4.118

Tobacco 2nd

1st 100 2.992

Ethanol 2nd

1st 48 1.338

Broiler 3rd

1st 146 5.307

Corn 4th

3rd 49 1.259

Pork 4th

4th 81 1.225

Main Products Production ExportsNumber of

Markets

AGRICULTURAL PRODUCTION INDEX: 1992-2019

FAO-OCDE Projections

19

“Brazil is the fastest growing agricultural sector by far, growing by over 40% to 2019, when compared to the 2007-09 base period.”

(OECD-FAO Agricultural Outlook 2010-2019)

Source: Ministry of Agriculture, Brazilian Institution of Geography and Statistics (pastures – 2006)

AGRICULTURE AREA 2007/2008 HARVEST

Most of recent

expansion in agricultural

area is on pasture land

BRAZILIAN AGRIBUSINESS EXPORTS MAIN PRODUCTS – 2010*

Source: Ministry of Development, Industry and External Commerce. 2009

Elaboration: Ministry of Agriculture 21

Total: US$ 73.9 billion * From November 2009 to October 2010

BRAZILIAN AGRIBUSINESS EXPORTS MAIN DESTINATIONS – 2010*

Source: Ministry of Development, Industry and External Commerce. 2009

Elaboration: Ministry of Agriculture 22

* From November 2009 to October 2010

Total: US$ 73.9 billion

BRAZILIAN AGRIBUSINESS

COMPETITIVE ADVANTAGES

Strong, thriving economy & Institutional framework

Leadership in tropical technology

Natural resources abundance (land, water, solar energy)

Farming vocation & Business entrepreneurship

21.042

18.778

12.902

20.265 21.522 22.231

33.705

43.886

30.444

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

2001 2002 2003 2004 2005 2006 2007 2008 2009

US

$ m

illi

on

24

EVOLUTION OF FOREIGN DIRECT INVESTMENTS

IN BRAZIL (2001 – 2009)

Netherlands 17,1%

USA 16,5%

Spain 8,7%

Luxemburg 8,6%

Japan 5,8%

France 5,7%

Germany 4,9%

Cayman Islands

3,9%

Canada 3,4%

Others 25,4%

FOREIGN DIRECT INVESTMENTS By origin - average 2007-2009

25

Millions of hectares

% Brazil % arable land Brazil 851.4

Total arable land 329.9

1. Total crop land 59.8 7.0% 18.1%

Soybean 21.6 2.5% 6.4%

Corn 14.4 1.7% 4.4%

Sugarcane 8.1 0.9% 2.5%

Sugarcane for ethanol 4.8 0.6% 1.5%

2. Pastures 158.7 18.6% 48.1%

3. Protected areas and native vegetation 495.6 58.2% -

4. Available area 137.2 16.1% -

Note: Arable land (Censo IBGE 2006) 1) Total permanent and temporary crops (Censo IBGE 2006); Data for soybean, corn and sugarcane (IBGE 2008). 2) Pastures (Censo IBGE

2006 3) Protected areas and native vegetation (Gerd Spavorek 2009, not published) APP = Permanent Preservation Area; UC = Conservation Units and TI = Indigenous lands 4)

Available area = arable land – Crop – Pastures. Source: ICONE and UNICA.

Source: UNICA

Source: UNICA and MAPA, 2009/2010 is estimated data. Production growth

is calculated by 2008/2009 over 2000/2001

Source: Anfavea

Industry revenue > US$ 50 billion (2010)

Foreign revenue (exports) US$ 13.8 billion (2010)

Direct investments > US$ 20 billion (2006-2009)

Composition 428 plants nationwide (2011)

Sugarcane growers 70,000 (2010)

People directly employed 845,000 (2009)

Share of Brazilian energy use 18.1%, ahead of hydroelectricity

Avoided CO2 emissions > 600 million tons since 1975

Source: UNICA

Petroleum and derivatives

37,9%

Sugarcane

18,1%Hydroelectricity

15,2%

Wood and other biomass

10,1%

Natural Gas8,8%

Coal4,8%

Other renewable sources

3,8% Uranium1,4%

Source: BEN (2010). Elaboration: UNICA

Jan, 2003 Feb, 2010

Accumulated sales

of flex-fuel vehicles

Source: ANP and ANFAVEA. Elaboration: UNICA

FLEX-FUEL ALREADY REPRESENT ALMOST 40% OF THE TOTAL BRAZILIAN FLEET (OTTO-CYCLE), EXPANDING

THE DEMAND

Brazilian-made crop

dusting planes running

on ethanol

Ethanol-powered

buses (E95) - still a

pilot project in Brazil

Flex-fuel

motorcycles

Production of diesel from

sugarcane at commercial

scale by 2010

Biobutanol

Production of bioplastics

ETHANOL USE ISN’T LIMITED TO CARS…

One of the biggest sugarcane groups in Brazil (unlisted company).

They have 13 units in 4 states.

Their sugarcane crushing capacity is about 38 million tons per year from 450,000 hectares.

Their annual production capacity is:

◦ 2.75 million tons of sugar,

◦ 1.53 billion liters of ethanol,

◦ 1 GWh of cogeneration.

They prefer to sell part of the company, but maintaining the control, in order to grow more.

Problable enterprise value: US$ 4.94 billion.

Important group in São Paulo State.

They have 2 units working and 1 greenfield to be built (with environmental licenses).

Their sugarcane crushing capacity is about 7.6 million tons per year.

Their production capacity is:

◦ 700 thousand tons of sugar,

◦ 140 million liters of ethanol,

◦ 115 MWh of cogeneration.

They have to be sold entirely.

Problable enterprise value: US$ 1.12 billion.

Unique mill in Mato Grosso do Sul State.

The mill had its first crushing this year (2011)

It can crush 1,0 million tons of cane per year now.

Their production capacity is:

◦ 90 million liters of ethanol.

They have to be sold entirely.

Problable enterprise value: US$ 110 million.

There is one in Mato Grosso do Sul State.

The price to buy the greenfield, including industrial area, environmental licences and business plan, is about US$ 20 million.

The Total CapEx for a 3 million tons per year mill will be around US$ 475 million.

In a greenfield, the production mix for sugar and/or ethanol could be defined as you want.

The first crushing season (1 million tons of sugarcane) will be after 3 years. Then, in the second crushing period, the mill will crush 2 million tons and, finally, in the third year, it will crush 3 million tons of sugarcane.