the actual scenario of the brazilian ethanol industry
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Brazilian Ethanol Chronological Facts
In 1532,Martim Afonso de Sousa arrived in Brazil brining sugarcane stems.
1530
Brazil was discovered in April 22,1500
For more than 200 years, the sugarcane production focused on three majors products
1. Sugar2. Animal Feedstock3. Cachaça brandy
Brazilian Ethanol Chronological Facts
• 5% (E5) blend of ethanol and
gasoline was added
• During the 2nd World War, the Northeast
Region used a 40% (E40) blend.
1931 - 19451530
• National Alcohol Program is launched in 1975 (PROALCOOL)
• The 1973 oil crisis
Brazilian Ethanol Chronological Facts
1973-1975 1931 - 19451530
%
90
01986 1990s
Percentage of cars manufactured with Ethanol Engineering
Source: Adapted from Hofstrand (2009)
Brazilian Ethanol Chronological Facts
1986 1990s 1973-1975 1931 - 19451530
2003 2009-2010 1986 1990s 1973-1975 1931 - 1945
%
90
02003 2010
Source: Adapted from Seelke & Yacobucci (2007)
Percentage of sales of FLEX FUEL vehicles
Brazilian Ethanol Chronological Facts
1530
Brazilian’s Sugar Cane Production System
Productive Structure
Brazil enjoys the fact that it has two distinct harvest periods
1. North-Northeast region From November to April
2. Center-SouthFrom May to November
Source: Di Ciero (2010)
Productive Structure
This regulation considers environmental, economic, and social aspects to
guide both sustainable expansion of sugarcane production and investments in the
biofuel sector
ZAE Cana excludes areas with slope bigger than 12%, forest (i.e. Amazon
forest and Pantanal Swamp), and other areas.
Brazil has approximately 63.48 million hectares (151 million acres) for the
expansion of the sugarcane (Brazil/ Presidencia da Republica, 2009).
Sugarcane Agro-ecological zoning (ZAE Cana)
(ZAE Cana)
Facilities - TypesSugar mills
Mills with distillery plants
Independent distilleries15
248
157
Source: MAPA (2010)
Distribution per region
Facilities – Geographic Distribution
Productivity of 80 tons/ha(336.276,100 tons)
Productivity – 2010/2011
46,2%53,8%
27.67 billion Liters 38,675,500 Tons
Productivity – Sub products
Productivity – Sub products
Brazilian Ethanol IndustryIn numbers
Production & Demand
Ethanol (Billion of liters)
Export
Production
Consumption
Internal Demand
FFV sales represent roughly 90% of new vehicle sales by end of year.
First flex fuel Motorcycle, models in the 150 cc Sold 183 thousand units for the year, a total that is 70% higher than sales for conventional units in the
same category (UNICA, 2010).
By the year 2013 more than half of the Brazilian fleet will be FFV
At the pump, he end-user can decide between gasoline or Ethanol by multiply the gasoline price by 0.7.
Gasoline has 22-25% of ethanol
2010 GDP: 7.5% 2010 unemployment: 5.3%
Storage
Infrastructure
Logistic
And other problems
In the last 20 years, the Brazilian government
did not invest enough resources on the
national infrastructure. As a result of this
short term vision, the country suff ers to
transport its goods.
Infrastructure & Logistic
The predominant mode of ethanol transport is road system because its
competitiveness on short routes and low load conditions. In general, the plants are
located, in agricultural areas away from major transportation routes and, individually,
have no scales of production that enable the use and investment in other modes of
transport.
http://caminhoesracing.blogspot.com/2009/09/treminhao.html
Road system
In 2008, the Center South region concentrated 68.3% of the national ethanol railroad system and seven from 10 main railroads terminals are destined to receive the fuel. The average railway distance in the region were 900 km (between 500 and 2,300 km), and the annual volume transported is approximately 1.6 million cubic meters (moving between 50 thousand and 400 thousand cubic meters in the main section)
Infrastructure & Logistic
Railroad system
http://www.ocoruja.com/index.php/2009/o-brasil-esta-embarcando-nos-trens/
Infrastructure & LogisticPipeline system
Brazil has approximately 5,700 miles of pipelines for combustive transport
Investment: U.S. $ 1.2 billion
Expected costs reduction: 10%
Volume: 12 million m3 of ethanol(Transpetro, 2010)
Infrastructure & Logistic - Pipelines
PlayersPrincipal
Source: UDOP (2010)
In Brazil, the ethanol marketing is become more concentrated. Seven major groups already dominate 67% of the ethanol sales in Brazil.
Foreign control of Brazilian ethanol and sugar companies is now up to 22 percent
Principal Players
Mills
Ethanol(billion liters)
9
3
Sugar (million tons )
the largest Brazilian sugar, ethanol and bioenergy
company
39
3.9
5.2
the largest global sugarcane-bagasse-
based electric energy generator,
23
2.2
4
13
1.5
2.3
Labor System The sugarcane industry is the biggest jobs generator of the Brazilian agriculture sector.
• Employees 629 thousand people
• The industry will generate others 170 thousand jobs in the following years
http://www1.folha.uol.com.br/folha/galeria/imagemdodia/p_20070421_08.shtml
The result of these actions reduced the child labor in the sugarcane industry in 86% (from 14.7% to 3.3%) of temporary workers and almost to 100% of permanent workers, from 1992 and 2005 (Balsadi, 2007).
Laws and Agreements
• National commitment for the improvement of labor conditions in sugarcane production
• The Brazilian labor ministry published the regulation 31• The Brazilian labor law
BRAZIL U.S.A
Vs
BRAZIL U.S.A
Description Mills Ethanol Jobs GDP Fleet
Brazil 453 7.5 Billion Gallons 630,000 26 billion 61 million
vehicles
The US 204 13 Billion Gallons 400,000 53.3 Billion 246
million
BRAZIL U.S.A
(Hofstrand, 2009)
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