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    Apresentação institucional Apresentação institucional Presentation Transcript

    • THE LARGEST BRAZILIAN BIODIESEL COMPANY
    • Title PageSection I Introduction 2Section II Market Overview 9Section III Group Overview 33Section IV Management, Strategy and Governance 46Section V Operational Review 65Section VI Financial Review 78Section VII Conclusion 83 1
    • IntroductionSection I
    • IntroductionBrasil Ecodiesel is the leading and sole fully-dedicated producer of biodiesel in Brazil, and it believes to be the largest listedBiodiesel company in the world in terms of production capacity;Established in July 2003, Brasil Ecodiesel began its operational activities in August 2005, throughout its Floriano Plant. The firsttwo years after the incorporation were dedicated to the establishment of partnerships with agricultural labor unions and governmententities, definition and development of technology and research of raw material options;The Company held its IPO and became a publicly-held company in November 2006. It is listed on the Sao Paulo Stock Exchange -Bovespa and has a market capitalization of around US$ 450 million as of December 2007. The major shareholders is/are: Shareholders Ações % Eco Green Solutions LLC 43,679,955 34.58% Zartman Services LLC 24,975,508 19.77% Nelson José Côrtes da Silveira 12,315,826 9.75% Wellington Managment Company 8,646,180 6.85% Others 36,693,272 29.05% Total 126,310,741 100,0% * On November 30th, 2007 3
    • IntroductionAccording to Brazilian Biodiesel Law (Law 11.097/2005), all the mineral diesel sold in the country from 2008 on will require a mandatory blend of 2% ofbiodiesel (“B2”), percentage that will increase to 5% in 2013. The market for biodiesel in Brazil is expected to increase to 1.0 million m3 in 2008 and 2.4million m3 per year beginning in 2013. However, the government already announced that the 5% blend will likely be brought forward to 2010.To stimulate private investment in the biodiesel sector, Brazilian Government started the purchases of biodiesel to Petrobras in 2006 and 2007, the state-owned oil company (rated Baa1 by Moody’s and BBB- by S&P), through public auctions organized by ANP (Oil National Council – “Agência Nacional doPetróleo”).On the auctions organized by ANP for biodiesel delivery scheduled for 1H08, Brasil Ecodiesel sold 161,000 m3 of biodiesel. Another auction, whose volumesare also scheduled to be delivered in the same period, was done, this time, by Petrobras to build up inventories, under which Brasil Ecodiesel sold 35,900 m3;The company maintains 6 operational plants in the cities of Floriano (Piauí), Crateús (Ceará), Iraquara (Bahia), Porto Nacional (Tocantins), Rosário do Sul(Rio Grande do Sul) and Itaqui (Maranhão), with a total capacity of 638,600 m3 /year, currently operating at around 57% of its total capacityConsidering the vertical integration strategy, the company also counts with oil extraction facilities in Iraquara (Bahia), Crateús (Ceará) which is currentlyunable to operate due to an environmental injunction, São Luis Gonzaga (Rio Grande do Sul) and Porto Nacional (Tocantins), which is under construction andis expected to start its operations by August 2008;Brasil Ecodiesel accesses the necessary volumes of vegetable oil to its activities through a strategy of diversification, which includes direct purchases fromvegetable oil producers, plantations in its own lands (63,349.4 hectares as of September 30) and partnerships with family farmers and commercial farmers;As of 9M07, Brasil Ecodiesel sold 114,674 m3, and had a market share of 49% in the first 9 months of 2007, with net revenues of BRL 201.4 mm;Brasil Ecodiesel had 1,614 employees as of November 2007 * subject to market evolution. 4
    • Competitive CharacteristicsSole Fully-Dedicated and Leading Brazilian biodiesel producer • Brasil Ecodiesel is the sole fully-dedicated and leading biodiesel producer in Brazil, responsible for 53% of biodiesel produced in Brazil in 2007, according to ANP • As being the market leader, maintaining a strong relationship with customers, suppliers, including the federal, state and local governments, the company is placed in a favorable position to remain a leading player after the anticipated end of the auction systemGovernment supportive of biodiesel industry • Brazil Government launched programs to increase sustainable production and mandatory use of biodiesel, according to the Law 11.097/05 • It has enacted laws and regulations that impose a long-term requirement to use biodiesel, and granted tax benefits favouring the sustainable production of oilseeds, which are essential raw materials in the production of biodieselInnovative raw material origination chain • Brasil Ecodiesel has introduced several measures like producing vegetable oils for industrial consumption only (like castor and jatropha), diversification into more efficient sources (like sunflower seeds) and the increased use of cheaper vegetable oils. Such strategy will determine the company’s increasing profitabilityGeographic and production flexibility Flexible technology that is able to produce biodiesel from several different raw materials (castor plant, jatropha and sunflower’s vegetal oils) with no increase in cost and make adjustments to meet varying technical specifications for biodiesel required by international markets National wide presence of operations allows the company to take advantage of: Logistic synergies Integration to a wider array of suppliers and clients Lower dependency on specific weather conditions and; Tax incentives in the different states where activities are located 5
    • Competitive CharacteristicsProject Management experience The company succeeded in the development of industrial projects, specifically biodiesel plant construction engineering, and have demonstrated this by implementing and completing its projects on a timeless basis Technology and equipment are sourced domestically, enabling Brasil Ecodiesel to meet biodiesel delivery obligations in a flexible manner and to expand operations in a timely fashion Developed its own tecnology to build and manage the operations of multifeedstock biodiesel plant Strong ability to build a biodiesel plant in Brazil within a very competitive capital expenditure per installed capacityRelationship management As fuel distributors are the only entities authorized to mix biodiesel with mineral diesel, the company strives to establish an even stronger relationship with the five main distributors that account for approximately 76.3% of the market Strong Human and Social development is a priority in the Brazilian biodiesel market adopted by the government and a fundamental aspect of the company. The company supports and promotes family farming projects, which benefits Brasil Ecodiesel by providing access to guaranteed supply and good relationships with government and labor unions, in addition to tax benefits. In November 2005, Brasil Ecodiesel received the “Social Fuel Seal”, a pre-requirement to participate in some of ANP’s auctions 6
    • Challenges and Mitigating Factors Challenges Company response / Mitigating Factors Short and medium term administrative reorganization Increasing access to cheaper grains and vegetable oils, achieved from family farmers andEBITDA margins and cash flow commercial farmersgeneration Price increase in the domestic market, due to increasing demand, as shown on last December Petrobras auction Economies of scales, increasing revenues with by-products Advantage of first mover and of being the sole fully-dedicated producer with substantial capacity in order to supply the marketIncreased competition Access to raw material is the main barrier of entry Ability to more than double its capacity with lower levels of CAPEX Commitment of government to the biodiesel policy, through a new mandatory marketRegulatory changes As the pioneer in the industry, Brasil Ecodiesel helped to form the current sector’s framework and would be consulted and influence regarding future changes Diversification of raw material sources, diminishing exposure to price volatilityExposure to volatile raw material Flexibility of technology in order to diversify vegetable oil types and mitigate risksprices Increasing portion of grains/ vegetable oils acquired from family and commercial farmers, with fixed prices 7
    • Challenges and Mitigating Factors Challenges Company response / Mitigating Factors Future supply contracts shall be based on automatic price adjustment mechanism linked to international vegetable oil pricesExposure to currency fluctuation Strong export potential to European Union due to its cheap production cost and strategic location on northeast of Brazil Potential access to long term credit lines to leverage the companyIncreasing financial leverage Strong cash flow projection supplied by the increasing domestic demand and existing production capacityPolitical Risk Global trend for the use of biodiesel New regulatory framework 8
    • Market OverviewSection II
    • Biodiesel What is it? Biodiesel is a renewable and biodegradable fuel, derived from renewablesources (vegetable oils and animal fat), such as: Soybean Castor plant Jatropha Rapeseed Palm Sunflower Animal Fat (pork and beef)Renewable fuel used in diesel cycle engines, as partial or total substitutefor mineral dieselIt is a methylic or ethylic ester, produced from a chemical reactionbetween a vegetable oil (or animal fat) and an alcohol (ethanol ormethanol) in the presence of a catalyst. Such reaction is denominatedtransesterification. 10
    • Biodiesel Attributes of the Product It is a perfect replacement for Engines do not need to be mineral diesel adapted Reduces the emissions of gases Ecologically correct, eligible for causing the greenhouse effect carbon credits It is renewable, biodegradable and has a positive energy balance in Does not harm the environment productionBIODIESEL Cetane number higher than that of High power of ignition and mineral diesel combustion Flash point is higher than that of Simplified distribution and mineral diesel greater safety in transportation Biodiesel is a premium product compared with mineral diesel 11
    • World Biodiesel Market Overview Global Context Increasing Global Energy Economic demand Growth Climate High Changes energy prices BIODIESEL: Pollution Security of energy supply Reduction Environment Refining Social Development capacity on the limit Oil reserves on the Geopolitical limit instability High of oil dependence producer of fossil countries energyMany countries and regions adopting specific laws to introduce biofuels in the energy matrixEurope and USA are today the main markets 12
    • Global TrendsStrong growth in the demand and production of biofuels: Security in supply, lack of dependency of regions with geopolitical problems and high prices trends; Concern about global warming, need to replace fossil fuels. World Production of Biodiesel (1000 MT) 18000 16000 14000 3080 12000 720 2200 10000 530 8000 100 450 6000 61,65 852,3 1400 10000 4000 2000 5 4890 4684 30 1065 0 2002A 2006A 2007E 2010E Source: Oleoline, EBB, NBB Europe USA Brazil Other Biodiesel market has great growth potential and the access to vegetable oils will be a key success factor Reduction in the production in Asia, mainly due to the increasing use of palm oil for human consumption and poor characteristic of biodiesel produced from palm oil only According to the World Economic Outlook, USA and Europe are reducing biofuels’ import taxes 13
    • World Biodiesel Market OverviewEurope: Directive 30/2003 established a voluntary goal to the use of 2% of biofuels in 2005, that was not attained; This goal was raised to 5.75% in 2010 and the European Council recommended adopting a mandatory goal of 10% in 2020; Several countries have already established mandatory goals, following the Brazilian example, which will change the price formation dynamics, making biodiesel prices independent from diesel prices; France: 2% since Austria: 2% in October 2005. Slovenia: 2% in 2006; January 2005. Check Republic: 2% in Germany: 2%, increasing to 5% Holland: 2% in 2007; September 2007; in 2007; Sweden, 2 to 5% , depending Spain: 3,4% in 2009, UK: 2% in April 2008; on the country’s region, in 2007; 5,75% in 2010. European production shall not meet the local demand: due to limitations of arable ground and rapeseed production. The European Commissioner for Agriculture, Marian Fischer Boel estimated in the Conference by the European Grain and Oilseed Convention, on May 4th, 2007, that 10 to 30% of biofuels consumed in Europe in 2020 shall come from imports. 14
    • World Biodiesel Market OverviewUSA:• Job Creation Act, 2004: tax incentives to biodiesel producers of US$ 1,00 per gallon produced, as well as credit to distributors and refineries of US$ 0,01 per gallon for each percentage point of biodiesel blended to the mineral diesel.• Energy Policy Act 2005: credit of US$ 0,10 per gallon of biodiesel produced by small producers, up to the limit of 15 million gallons.• “New Energy Bill”, 2007: The energy bill adopted by the Senate increases the Renewable Fuels Standard (RFS), which sets annual requirements for the amount of renewable fuels produced and used in motor vehicles. The expanded RFS requires 9 billion gallons of renewable fuels in 2008 and is expected to increase to a 36 billion gallon requirement by 2022.“Environmental Protection Agency”:• Sulfur is one of the most polluting elements derived from mineral diesel;• Mineral diesel consumed in US should reduce sulfur from 300 - 500 ppm (parts per million) to at most 15 ppm. This is called ULSD (Ultra Low Sulfur Diesel), which is mandatory to all road vehicles since June 2006. Reduction of sulfur drastically decreases the fuel lubricity, which is essential for engines efficiency. Biodiesel, even in a percentage lower than 1%, solves the problem by increasing lubricity up to as much as 65%;• US Navy: According to its memorandum US Navy should use blends of B20 in the regions where there are available supply. US Army and Navy are the largest diesel consumers of US. 15
    • World Biodiesel Market Overview Historic substantial growth of biodiesel production: European Production US Production 250 1437.4 1600 250 1400 305.1 935.9 200 Volume (million gallons)Volume (million gallons) 1200 131.4 1000 218.4 150 568.3 184.3 800 116.4 313.1 421.2 600 144.6 100 75 67.7 25.9 94.1 782 400 11.5 80.2 102.3 61.7 104.9 491 50 25 107.6 15 20 200 304 210 132 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Germany France Italy Other Source: European Biodiesel Board Source: National Biodiesel Board 16
    • Brazilian Biodiesel Market Overview REGULATING MILESTONE: BIODIESEL LAW Law 11.097/05: Establishes minimum percentages ofmixing biodiesel with diesel and the monitoring of the insertion of the new fuel in the market. onwards Authorized Mandatory Mandatory Potential Market: Firm Market: Firm Market: 840 million liters 1 billion liters 2,4 billion liters 17
    • Brazilian Biodiesel Market Overview Regulating OverviewJuly 2, 2003 - Brazilian government issued a decree instituting a working group to assess the feasibility of the use of biodiesel as analternative energy source and, on December 23, 2003, the Brazilian government created by decree an inter-ministerial executivecommission in charge of the implementation of actions encouraging the production and use of biodiesel in Brazil;December 23, 2003 - The Brazilian government issued a decree that create the executive inter-ministry comitee to implant the actionaiming the production and commercialization of biodiesel.November 24, 2004 - ANP issued ANP Resolutions No. 41 and No. 42, which establish, respectively, the requirement of the ANP’sauthorization for biodiesel production and the technical specifications for biodiesel production and sale;December 6, 2004 - Brazilian government enacted Provisional Measure No. 227, converted into Law No. 11,116 of May 18, 2005, as wellas Decrees No. 5,297 and No. 5,298. Subsequently, the Brazilian Secretariat of the Federal Internal Revenue Service issued NormativeInstructions No. 516 and No. 526, on February 22, 2005 and March 15, 2005, respectively. These provisions regulate the specialregistration of a biodiesel producer or importer with the Brazilian Secretariat of the Federal Internal Revenue Service, the coefficients for thereduction of contribution rates for the PIS/PASEP and COFINS payable for the production and sale of biodiesel, as well as an exemptionfrom the IPI contribution payable on biodiesel;January 13, 2005 - Brazilian government enacted the Brazilian Biodiesel Law, which introduced biodiesel into the Brazilian energy matrixand broadened the ANP’s scope of action, which was expanded to include the regulation of the production and marketing activities ofbiofuels. Moreover, this law set minimum compulsory percentages for the mixing of biodiesel with mineral diesel sold to final consumers,determining that the minimum additional percentage must be 2.0% from 2008 to 2012, and 5.0% from 2013;January 13, 2005 - The Brazilian Government enacted the Brazilian Biodiesel Law, which introduced biodiesel in the Brazilian energymatrix and broadened the ANP’s scope of power to include the regulation of the production and marketing activities of biofuels. Moreover,this law set minimum compulsory percentages for the mixing of biodiesel with mineral diesel sold to end consumers, requiring a minimumadditional percentage of 2.0% from 2008 to 2012 and 5.0% from 2013;May 18, 2005 - the Brazilian Government enacted the Law 11.116 regarding the Special Register on the Secretariat of Internal Revenue ofthe Ministry of Finance of biodiesel producer or importer and regarding PIS/PASEP and COFINS due such product revenue; 18
    • Brazilian Biodiesel Market Overview Regulating OverviewMay 20, 2005 - the Brazilian Government issued a Decree which amends the item 1, article 2 of law 11.097, regarding the introduction ofbiodiesel in the Brazilian Energetic Matrix and Provisions;June 06, 2005 - the Brazilian Government issued a decree which reduced the portion of PIS/PASEP and COFINS importion andcommercialization of biodiesel;July 5, 2005, and on September 30, 2005, the MDA issued Normative Instructions No. 01 and No. 02, respectively, which regulate thecriteria and procedures related to the granting of the Social Fuel Seal to companies and projects;September 23, 2005 - CNPE, based on the powers granted it by the Brazilian Biodiesel Law, required the mandatory purchase of biodieselfrom producers holding the Social Fuels Seal by producers and importers of diesel;October 3, 2005, the MME issued Edict No. 483, which established the guidelines for the regulation of biodiesel public auctions;November 4, 2005 - ANP subsequently issued Resolution No. 31, which regulates procedures and participation requirements for suchauctions. Five auctions were done from November 2005 to February 2007, to supply the market in 2006 and 2007;July 17, 2006 – ANP issued resolution N.º 15, which established the technical specifications to mineral diesel and B2 and also defines theobligations of the quality control over the products;October 3, 2007 – MME issued Resolution No. 5, defining that new auctions would be done to supply the market in the first half of 2008,when 2% mandatory blend should begin.October 4, 2007 - MME issued Edict No. 284, which regulates procedures and participation requirements for such auctions;December 11, 2007 - ANP issued Resolution No. 338, indicating that Petrobras and Refap should buy another 100,000 m3 to build upinventories 19
    • Brazilian Biodiesel Market Overview Regulating OverviewMarch 7, 2007 - the ANP issued Resolution No. 9 which sets forth the technical regulation on quality control of liquid fuel used in vehicles,including biodiesel, among others, purchased by retail stores for commercialization to end consumers;October 4, 2007 - the MME issued the Ruling No. 284 establishing the specific guidelines of the public auctions which shall be held by theANP related to the buy of biodiesel;October 30, 2007 - the ANP issued Resolution No. 33, which determined the guidelines for the regulation of biodiesel auctions to be heldby the ANP, in connection with biodiesel to be sold in 2008, pursuant to the CNPE’s Resolution No. 5, dated October 3, 2007. ThisResolution also sets forth that the ANP may hold additional auctions with the termination of purchase and sale agreements executed inprevious biodiesel auctions;December 11, 2007 - the ANP issued Resolution No. 44, which determined that the diesel producers that acquired biodiesel underbiodiesel auctions in order to comply with the requirement to add 2% of biodiesel in all diesel supplied to end consumers must supply suchbiodiesel to all distributors notwithstanding such distributors having acquired diesel from other diesel suppliers; andDecember 11, 2007 - the ANP issued Resolution No. 45, which determined that Petrobras and REFAP must form a stock of biodiesel in theamount of 100,000 m3 (and acquire the corresponding amount of biodiesel under public purchase proceedings) by February 29, 2008 inorder to guarantee the continuity of supply of biodiesel to such contributors and other companies selling diesel to end consumers, whichmust comply with the obligations to add a minimum 2% of biodiesel, in all diesel sold to end consumers, pursuant to the Brazilian BiodieselLaw. 20
    • Market RegulationANP (National Agency for Petroleum, Natural Gas and Biofuels) Governmental agency created in August 1997, Responsible for regulating, supervising and enhancing the petroleum, natural gas and biofuels industry in Brazil through the creation of competitive market conditions, bringing lower prices and better service to final consumers The production, import, export, storage, distribution and sales of biodiesel as of any type of fuel in Brazil are subject to the ANP’s regulation and authorizationGovernment Incentive Policy and favourable regulatory frameworkCapacity authorization: Producers need to be authorized by ANP, by the Brazilian Secretariat of the Federal Internal Revenue Service work and also by states environmental offices;Market mandatory demand regulated by auctions until June, 2008: mechanism for 2H08 unknown yet and free marketon the medium term (Negotiations between producers and distributors) is expected;Competition by price under auctions mechanism, without any price regulation. 21
    • Market SizeBrazilian Diesel Market Distributors Sale (Diesel + B2) – m345.000.00040.000.00035.000.00030.000.00025.000.00020.000.00015.000.00010.000.000 5.000.000 0 2000 2001 2002 2003 2004 2005 2006 2007 Diesel B2 22
    • Market Size Brazilian Biodiesel production in clear expansion60.000 54.752 53.699 46.98150.000 7: 9.6% 45.112 G R0 43.366 CA40.000 7.8% 07: 1 06- GR30.000 CA 26.005 26.718 22.637 18.77320.000 17.109 16.025 8.58110.000 6.490 6.735 1.725 2.578 3.331 1.075 0 fev/06 fev/07 nov/06 nov/07 mar/06 mar/07 jan/06 mai/06 jun/06 set/06 out/06 jan/07 mai/07 jun/07 set/07 out/07 abr/06 jul/06 dez/06 abr/07 jul/07 dez/07 ago/06 ago/07 Source: ANP 23
    • Potential Market Size Brazilian Biodiesel market shall be higher than mandatory volumes, due to the early achievements of the Government goals and additional voluntary use 2005 - 2007 2008 - 2009 2010 onwards 2% Authorized 2% Mandatory 5% Mandatory * ? 1,600 1,200 2,400 730 thousand m3 3,000 2,500 400 2,000 1,500 500 800 870 1,000 500 68.5 0 2006 2007 2008 2009 2010 Voluntary Market Mandatory Market** With voluntary market*** Considering advance of B5** Mandatory – MME Estimates/ Voluntary – Brasil Ecodiesel Estimates 24
    • Potential Market SizeBrazilian Biodiesel market will be higher than mandatory volumesBesides the mandatory market there is a voluntary one made up of special consumers such as the fleets of urban buses, roadtransport, railroads, mining equipment and thermo-electrical plants, all of which may use higher percentages of biodiesel: • Vale, the largest consumer of diesel in Brazil, is already using B20 in its railroads; • Public transportation companies are already using B5 in Rio, São Paulo and Belo Horizonte, among other cities; • Agricultural fleets, which consume about 15% of the diesel in the country, are a potential market considering high diesel prices in some regions of the country due to the distance from refineries; • Isolated thermo-electrical power plantsSource: Brasil Ecodiesel 25
    • Auctions The ANP Auctions (FOB prices) Amount Brasil Ecodiesel Auction % BRL/m3 Delivery Dates Auctioned m3 Part 1st Auction 26,800 m3 until 12/31/2006 70,000 38,000 54.3% 1,909 11/23/2005 11,200 m3 until 06/30/2007 2nd Auction 170,000 21,780 12.8% 1,905 Until 06/30/2007 03/30/2006 3rd Auction Between 01/01/2007 and Voluntary 50,000 40,000 80.0% 1,730 07/11/2006 12/31/2007 Volumes 4th Auction Between 01/01/2007 and 550,000 388,220 70.6% 1,730 07/12/2006 12/31/2007 5th Auction 45,000 8,000 17.8% 1,803 Until December 2007 02/04/2007 6th Auction 304,000 141,000 46.4% 1,845 Until 06/30/2008 11/13/2007 7th Auction Mandatory 76,000 20,000 26.3% 1,873 Until 06/30/2008 11/14/2007 TOTAL 1,265,000 657,000 51.9%The Petrobras and Refap Auctions (CIF prices) Amount Brasil Ecodiesel CIF PRICE Delivery Auction % Auctioned m 3 (m ) 3 BRL/ m 3 Dates Petrobras e Refap Mandatory Until 100,000 35,900 35.90% 2,290.38 12/20 and 12/21/2007 02/28/2008 The average logistics cost of this auction is R$ 70 / m3, which would correspond to an average FOB price of around R$ 2,220 / m3. 26
    • Overview of Biodiesel’s AuctionsSummary of the Biodiesel Auctions 450000 2500 400000 350000 2000 Production in m3 300000 1500 R$ / m3 250000 200000 1000 150000 100000 500 50000 0 0 1st 2nd 3rd 4th 5th 6th 7th 8th and 9th Brasil Ecodiesel m3 Others m3 Brasil Ecodiesel Average PriceBiodiesel Production 120 80.00% 70.00% 100 60.00% 80 50.00% Production in ‘000 m3 60 40.00% Market share 30.00% 40 20.00% 20 10.00% 0 0.00% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 Brasil Ecodiesel Production Total Production Market Share 27
    • Competitive Landscape Biodiesel Production divided by producer – m3 Production (m3) 2005 2006 2007 Brasil Ecodiesel 156 21.2% 34,768 50.7% 211,980 53.1% Granol 0.0% 30,543 44.6% 67,946 17.0% Biocapital - 0.0% - 0.0% 30,892 7.7% Caramuru 0.0% 0.0% 42,692 10.7% Barrálcool 0.0% 0.0% 12,590 3.2% Bsbios 0.0% 0.0% 13,690 3.4% Others 580 78.8% 3,237 4.7% 19,773 4.9% Total 736 100.0% 68,548 100.0% 399,563 100.0%Biodiesel Production divided by producer in 2007 – m3 Others, 4.9% Bsbios, 3.4% Barrálcool, 3.2% Caramuru, 10.7% TOTAL Biocapital, 7.7% 399,243 m3 Brasil Ecodiesel, 53.1%Source: ANP Granol, 17.0% 28
    • Competitive Landscape for 2008 6th (11/13/2007) and 7th (11/14/2007) ANP’s Auctions Others, 11.32% Competition scenario for 1H08 defined by the auctions; Fiagril, 6.05% Small companies that had never produced biodiesel before, and which are not fully-dedicated Brasil Ecodiesel, producers, could participate of the auctions, 42.37% increasing the competition and pressuring theCaramuru, 10.00% prices down; 380,000m3 Trend that companies that don’t deliver the biodiesel should be banned from possible upcoming auctions; Biocapital, 13.16% Potential new players to enter the market only after July 2008. Granol, 17.11% 29
    • Competitive Landscape for 2008 1st Refap (12/20/2007) and Petrobras (12/21/2007)AuctionsVolumes sold by each producer not available yet. Competition restricted to the major players Petrobras perception on potential risk of lack of supply due to results of the 6th and 7th auctions 30
    • Competitive Landscape General Potential new players: PETROBRAS COMMODITY/TRADING VEGETABLE PRODUCERS Advantages Disadvantages Advantages Disadvantages Cultural bias towards Domain of the vegetable oil’s Depends on a sub-product of itsDiesel production monopoly; engineering fossil fuel market; main activity; development; Strong presence in the Small access to tax benefits;Strong presence in Difficulty to promote its grains’ European biodiesel market;distribution; Current logistics oriented to origination chains, due to its Investment capacity. grain’s exports. needs of capillarity andInvestment capacity. dispersion; Need to develop a new social INTERNATIONAL GROUPS SEEKING EXPORTS program; Advantages Disadvantages FUEL DISTRIBUTORS Access to the international Small access to tax benefits; biodiesel market; Current internal logistics oriented Advantages Disadvantages Investment capacity. to grain’s exports. Biodiesel’s total market incipient in relation to its main activity; Detachment of the program’s OTHER INDEPENDENT PRODUCERSDistribution and social objectives;commercialization structure; Dependant of other Advantages DisadvantagesInvestment capacity. companies for supplies’ Dependant of other companies origination; Eventual access to lower costs’ for supplies’ origination; Limited volume of lower costs’ supplies; Limited volume of lower costs’ supplies; Flexibility to create independent supplies; Difficulties to structure its own strategies. Difficulties to structure its own supply chain. supply chain. 31
    • Other Producers USA Asia Europe Imperium Renewables, Inc. was founded as Gushan is a leading producer of biodiesel BIOPETROL INDUSTRIES AG is a SwissSeattle Biodiesel, LLC in 2004. Saybr and related products in China. It was founded company with subsidiaries in Germany, in theContractors, the leading petroleum facility in 2001. Currently, it has an aggregate annual Netherlands and in Switzerland. Its business iscontractor in the Northwest, entered into a joint production capacity of 190,000 tons of the manufacture and distribution of biodiesel toventure to construct the first commercial biodiesel. As a pioneer of the biodiesel DIN EN 14214 and of pharmaceutical gradeimplementation of this biodiesel refinery manufacturing sector in the country, it intends glycerol from vegetable oil. Biopetroltechnology. By early 2005, the refinery opened to promote biodiesel as one of the best registered € 155.44 mm sales of which 95%for business. Imperium Renewables, Inc. solutions for China’s energy needs by belongs to biodiesel. In 9M07 Biopetrol soldoperates the Seattle refinery as a wholly owned producing quality and environmentally friendly 199,817 tonnes of biodiesel (114,320 tonnes insubsidiary with a yearly capacity of 5 million biodiesel at competitive cost. 9M06).gallons per year. In August, 2007 it officiallyopened the USA’s largest Biodiesel refinery, Oceania D1 Oils plc is a UK-based global producer ofcapable of producing up to 100 million gallons biodiesel with also commodity refining andper year, in Grays Harbor Washington. The Natural Fuel Limited is a renewable energy trading activities. The company hascompany is in site developments that it believe company, headquartered in Australia. Natural established a global planting joint venture withwill deliver another 300 million gallons per year of Fuel was incorporated in October 2003 and BP in order to develop its biodiesel production.capacity by the end of 2009. became a public unlisted company in June D1 has obtained the right to offtake a total 2004. On 21 December 2006 Natural Fuel area of 198,000 hectares of jatropha Limited listed on the Australian Securities worldwide. Turnover as of Jun 30th 2007 Nova Biosource Fuels, Inc. is an energy Exchange (ASX: NFL ). Its biodiesel plant incompany that synthesizes and markets ASTM reached £4.1m corresponding to 8,588 tonnes. Darwin (a 50/50 joint venture with Babcockstandard biodisel and related co-products. Nova and Brown Environmental Investments) isis focused on the construction and operation of Australia’s largest. A wholly owned biodieselthree biodiesel refineries with total productioncapacity 180 to 220 million gallons of fuel on an production facility is in the final stages South America of construction on Jurong Island, In tests’ period, Bertin’s Biodiesel plant willannual basis. Novas business strategy through Singapore. Once completed, it will be thethe year 2010 includes building up to seven represent, according to Abiodiesel largest biodiesel production facility in the (Associação Brasileira das Indústrias debiodiesel refineries, either wholly owned or in world.connection with joint ventures, each with annual Biodiesel), 14% of the Brazilian production,production capacity ranging from 20 to 60 million and will be the biggest installed plant in thegallons world to make biodiesel from animal fat. The plant will have a year capacity of 110 millions Canada of litters of biodiesel. Despite the initial use of fat as supply, the plant also has conditions to Plant Name City Province Feedstock Capacity operate with vegetable oils.Milligan BioTech Foam Lake SK Canola Oil 1,000,000 LBIOX Hamilton ON Tallow 66,000,000 LRothsay Montreal QC Animal Fats/Yellow Grease 30,000,000 L 1 Gallon = 3.79 littersNorth West Bio-Energy Unity SK Wheat 25,000,000 L 32
    • Group OverviewSection III
    • Company HistoryJuly 2003 The Company entered into an agreement with the state of Piauí for the installation of a castor plant oil production center based on family farming;November 2003 The Company began implementing its first family production center, the Santa Clara Agricultural Center, which recorded its first harvest between May and August 2004;April 2004 Ecotrans, a subsidiary of the company, began its logistics activities;November 2004 Acquisition of Crateús Algodoeira S.A. (Crateús Algodoeira), located in the state of Ceará;August 2005 Inauguration of the Floriano plant, located in the state of Piauí;November 2005 Brasil Ecodiesel participated in the first public biodiesel auction, winning bids to supply 38,000 m3 of biodiesel, 54.8% of the total amount;March 2006 The Company participated in the second public biodiesel auction, winning bids to supply 21,780 m3, 12.8% of the total amount;May 2006 The Company began construction of its Crateús plant in the state of Ceará;July 2006 The Company began building its Iraquara plant in the state of Bahia;July 2006 Brasil Ecodiesel participated in the third and fourth public biodiesel auctions in which it won bids to supply 428,220 m3, 71.4% of the total amount;October 2006 Inauguration of the Crateús plant;November 2006 Brasil Ecodiesel held its IPO, becoming a publicly-held company;November 2006 inauguration of the Iraquara plant;December 2006 Laying of the foundation stone for the Dourado plant, in Mato Grosso do Sul;February 2007 The Company participated in the fifth public biodiesel auction, winning bids to supply 8.000 m3 17.8% of the total amount;May 2007 Inauguration of the Porto Nacional plant, located in Tocantins state;July 2007 Inauguration of the Rosário do Sul plant, in Rio Grande do Sul and Itaquí in MaranhãoNovember 2007 Brasil Ecodiesel participated in the sixth and seventh public biodiesel auctions in which it won bids to supply 161,000 m3, 42.4% of the total amount;December 2007 Brasil Ecodiesel participated in Petrobras and Refap auctions in which it won bids to supply 35,900 m3, 35.9% of the total amount; 34
    • Brief History Deliveries of the1st Deliveries of 2nd, Inauguration 1st auction of auction. 3rd and 4th Start of the purchase of of the Santa 2nd, 3rd and 4th auctions. Activities biodiesel (Nov/05) Clara Center auctions (Mar/06 Start of operation of and Jul/06) new plants (3). 2003 2004 2005 2006 2007 Start of the Operations and Auctions ofFormation of Productive Base Expansion Biodiesel Definition of the Inauguration of the plant of Demand assured business plan Floriano (2005) Corporate Agreements and IPO (Nov/06) structuring contracts with Start of operations of plants of Consolidation of unions of farm Crateús and Iraquara (2006) market-share from laborers and 2008 onwards producers of raw Construction of new plants - Porto materials Nacional, Rosário do Sul and Itaqui (in operation in Jul/07) 35
    • Group Structure (as of 11/30/2007) Eco Green Nelson José Wellington Zartman Solutions Cortês da Managment Others Services LLC LLC*** Silveira Company 34.58% 9.75% 19.77% 6.85% 29.05%* 99.0%** 99.5% 99.0%** 99.9%** 99.0%** Rede de Compras Ecotrans Transporte, Intermediação de Cratéus Algodoeira Serviços e Locação de Other Agriculture Negócios, Comércio de Buriti Agrícola Ltda. Produtos e Insumos S.A. Equipamento e companies Agrícolas Ltda. Máquinas Ltda.* Non of the shareholders own over 5.0% of the Company’s Shares** The remaining shares are owned by Nelson José Cortes da Silveira*** In Sep 2007, Eco Green reduced its participations in the shareholders’ agreement and no longer indicates members to the Board 36
    • Group Structure Subsidiaries DescriptionBrasil Ecodiesel divides its operational activities, assigning different roles to its Company and to each of its subsidiaries, asfollows: Brasil Ecodiesel – It is the holding company of Brasil Ecodiesel Group and operates all the industrial plants. Rede de Compras – Rede de Compras purchases raw materials for biodiesel production, markets the by-products of its oilseed crushing process and sells basic tools, seed, fertilizer and other products to family farmers. Crateús Algodoeira – Crateús Algodoeira leases a crushing unit it owns to Brasil Ecodiesel. This crushing unit is integrated into the transesterification plant in the same city. Buriti – Buriti Agrícola S.A is an Agro industry with the harvest, selling and exports of agricultural products and its by products. Purchase and sale of 3rd parties agricultural production. Its mains activity today is the administration of Santa Clara Agricultural Center. Ecotrans – Operating and maintenance of the Company ’s road transportation fleet and agricultural machinery are conducted through Ecotrans. In addition, Ecotrans conducts integrated logistics activities, including the shipment of raw- materials and by-products. Other agricultural companies - Agro industries with the harvest, selling and exports of agricultural products and its by products. Purchase and sale of 3rd parties agricultural production: Bora Bora Agro-industrial Ltda, Bonanza Agro- industrial Ltda, Capão da Canoa Agro-industrial Ltda, Erebango Agro-industrial Ltda, Gustávia Agro-industrial Ltda, Jaicó Agrícola Ltda, Mocuri Agrícola Ltda, Montana Agro-industrial Ltda, Piatã Agrícola Ltda. 37
    • Operational StructureMajor biodiesel producer in Brazil and the only one with a nationwide presence Biodiesel Plants 6 in operation 1 at planning stage Oil Extraction Units 3 in operation 1 in construction 1 at planning stage 3 Laboratories of Certification Farms: 63,000 hectares of its own or leased Oil and bean Storage Units 38
    • Operational StructureProduction Currently, Brasil Ecodiesel maintains 6 vegetable oil processing units, in the following locations Start of Start of Production capacity Biodiesel sales Expanded Capacity Plants Construction Operations thousands of m3/year (thousands of m3) - 9M07 (thousands of m3) Floriano, PI Aug-05 Dec-05 44.6 24.9 89.1 Crateus, CE May-06 Dec-06 118.8 32.6 165.0 Iraquara, BA Jul-06 Dec-06 118.8 42.5 264.0 Porto Nacional, TO Aug-06 Jun-07 118.8 7.1 264.0 Rosario do Sul, RS Sep-06 Aug-07 118.8 3.7 264.0 Itaqui, MA Sep-06 Aug-07 118.8 3.8 264.0 Total 638.6 114.7 1310.1Aiming at maintaining its market share, the Company approved an expansion plan to put in place according to market development: • ANP, has already authorized the expansion of Floriano; • The expansion of Iraquara, Cratéus, Porto Nacional, Rosário do Sul and Itaquí was already requested to ANP; • The installation of the Dourados – MS plant will take place after the end of the plants’ expansion.Aiming at increasing its production facilities and producing its own vegetable oil, Brasil Ecodiesel is installing oil extraction plants: Oil extraction facility at Iraquara (Bahia state), integrated to biodiesel plant, to begin operations in February/ 2008; Oil extraction facility at São Luiz Gonzaga (Rio Grande do Sul state), which is already being adapted to run with castor plant’s, sunflower’s and other vegetable’s oil, aiming to supply Rosário do Sul plant; Oil extraction facility under construction integrated to Porto Nacional plant. 39
    • Brasil Ecodiesel Market Capitalization (US$) 1.200.000 1.000.000 800.000 US$ 600.000 400.000 200.000 - 22/11/2006 22/12/2006 22/1/2007 22/2/2007 22/3/2007 22/4/2007 22/5/2007 22/6/2007 22/7/2007 22/8/2007 22/9/2007 22/10/2007 22/11/2007 DateSource: Bovespa – São Paulo Stock Exchange 40
    • Tax BenefitsICMS Piauí State: The Company has ICMS benefits for a 10 year period, 100% off over net payable ICMS for the first 7 years and 70% off for the 3 other years. Bahia State: The Plant located in Iraquara has a 80% deferment on the ICMS for 12 years. If the company pay before the maturity date, it has a discount that can reach 90% of the total amount. Ceará State: The Plant located in Cratéus has a deferment of 75% of the net payable ICMS for 10 years and a discount of 75% over the amount paid. It also counts with exemption of ICMS and Import taxes over the imported vegetable oil. Tocantins State: The tributary expenses correspond to 2% of the industrialized products sales operations. It also counts with exemption of ICMS and Import taxes over the imported vegetable oil. Maranhão State: The Company has a discount of 100% of the net payable ICMS. It also counts with exemption of ICMS and Import taxes over the imported vegetable oil. Rio Grande do Sul State: The Company has a deferment of 75% for 8 years and a discount of 60% over the amount paid;ICMS – State Value Added Tax 41
    • Tax BenefitsIncome Tax The company has received the deduction of 75% of its Income Tax and non Reimbursable Additional for 10 years (starting in 2007) for its units located in Floriano, Cratéus and Iraquara. The plants located in Porto Nacional and Itaquí are also able to receive the deduction and the process is under analysis of the fiscal entity; 42
    • RevenuesThe proportion of revenues from biodiesel are around 98%; and other products include glycerin and castor plant cake (fertilizer);Considering the strong development of glycerin markets, which prices recouped a lot on the latest months, the company expects todiversify its sources of revenue, mainly due to glycerin sales, that will expand from 2008 on;The third quarter of 2007 marked the first time ever that Brasil Ecodiesel sold biodiesel from all six of its industrial plants. After a longperiod of investment in capacity expansion and obtaining the licenses required for operation, the company has finished all the plantsand its efforts have now turned to increasing capacity utilization and operating efficiency. Improvements were already observed in thethird and fourth quarter, when the company produced a record volume of biodiesel. 60 53.3 50 40 Sales in 1000 m 3 33.7 27.7 30 20 13.6 10 0 4Q06 1Q07 2Q07 3Q07 Floriano Iraquara Cratéus Itaquí Rosário do Sul Porto Nacional 43
    • Cost of Goods Sold 3Q07 Methanol, 8.8% Labor Force, 2.6% Depreciation,Vegetable oil, 2.2% 80.1% Other costs, 6.3% 44
    • PersonnelAs of November 2007, Brasil Ecodiesel Group had 1614 employees,Employees distribution: Business Area November 2007 Family Farming 198 Commercial Farming 12 Santa Clara Agricultural Center 135 Own Farms 118 Crushing Units 126 Biodiesel Plants 712 Engineering and Construction 164 Administrative 149 Total 1614 45
    • Management, Strategy and GovernanceSection IV
    • Board of DirectorsThe board of directors is Brasil Ecodiesel’s collective deliberating body, responsible for establishing its general strategicmanagement guidelines, including long-term strategy, controlling and monitoring its overall performance and overseeingmanagement’s activities. In accordance with Brazilian corporation law, each director must hold at least one commonshare of the corporation.The Company’s Bylaws establish that its board of directors must be composed of a minimum of five and a maximum ofnine directors, including the chairman and the vice-chairman. The directors are elected at its annual shareholdersmeeting for a unified term of one year, with re-election permissible and until their successors have been elected andhave qualified and they can be removed at any time. In order to take office, the Company’s directors are required tosign an acceptance letter (termo de anuência) as provided in the Novo Mercado rules. According to the Novo Mercadorules, at least 20.0% of the directors must be independent board members.Any decision must be taken by an affirmative vote of a majority of the members attending the meeting, including thechairman, who retains a tiebreaking vote.Furthermore, the new Company’s Board of Directors was elected, effective up to the next annual general meeting in2008, which now relies on nine members, four of them are independent members. Below, the curricula vitae of themembers of the Company’s new Board of Directors: 47
    • Board of DirectorsJorio Dauster Magalhaes e Silva Ambassador Dauster is a graduate in International Relations of the Preparatory Course for the Diplomatic Career - Instituto Rio Branco. Besides holding various positions in the Brazilian diplomatic service starting in 1961, he wasChairman of the Board and President of the Brazilian Coffee Institute (1987 – 1990), Chief Foreign Debt Negotiator (1990 – 1991) andIndependent Board Member Ambassador to the European Union (1991 – 1998). He also held the position of CEO of Companhia Vale do Rio Doce from 1999 to 2001.Eduardo Marco Modiano Mr. Modiano holds undergraduate degree in systems engineering, in public administration and in Economics. He concluded his MBA in Finance and Information System at MIT, Cambridge, Massachusetts, USA (1978) and Ph.D. inVice-Chairman of the Board and Economics and Operational Research from MIT, Massachusetts, USA (1978). He has broad professional experience,Independent Board Member pointing out his positions as President of BNDES (1990-1992); President of the Privatization Committee of the National Privatization Program (1990-1992); Vice-President of Investments at Banco Itamarati S.A., managing US$ 1.2 billion (1993-1996); Executive Officer of Banco FonteCindam S.A., (1997-1999). Wagner Pinheiro de Oliveira Mr. Wagner Pinheiro holds an undergraduatedegree in Economics and graduate degrees in Financial Administration and Management and Finances He was an investment analyst for Banespa (1987 to 1991). He was advisor of Independent Board Member Finances and Budget for the Labor Party at the São Paulo state legislature (1991 to 1994). He was elected member of the Investment Committee (1995 to 1999) and elected as Financial Officer of Banesprev (1995 to January, 2003). He is currently President of Petros – Petrobras’ Foundation of Social Security, Member of the Board of Directors of Telemig Celular Participações S/A and President of the ICSS – Cultural Institute of Social Security. Luiz Gylvan Meira Filho Mr. Gylvan holds an undergraduate degree electronic engineering from ITA (Aeronautics Engineering Institute) and a Ph.D. in Astro-geophysics by the University of Colorado, Boulder. Mr. Gylvan created and presided the Brazilian Space Independent Board Member Agency (1994-2001), and was Secretary of Science and Technology Policies at the Ministry of Science and Technology (2001-2002). Creator and member of the oversight board of ATECH Tecnologias Críticas. (1997-1999). He is currently a consultant for several entities in the technology and climate change areas. Nelson Jose Cortes da Silveira Mr. Silveira holds an undergraduate degree in Electrical Engineering from the Fluminense Federal University, in 1979. He took part in various projects in the electrical energy sector, including project planning, execution and the Board Member management of transmission line works, hydroelectric and thermoelectric plants and other installations. He is a founding partner and held the position of director of Enguia Power Ltda., during the years from 2001 to 2004. Mr. Silveira serves as its CEO. 48
    • Board of DirectorsFranciso Augusto da Costa e Silva Mr. Costa e Silva is partner of Bocater, Camargo, Costa e Silva – Advogados Associados. He is graduated in law and post-graduated in Executive MBA at COPPEAD / UFRJ. During his legal career at BNDES System, from 1970, Mr.Board Member Costa e Silva worked at several job positions, especially Legal Superintendent of BNDESPAR, Superintendent of Financial and International, Capital Markets and Administrative Areas, Officer of BNDESPAR and of BNDES. He was President, from 1995 to 2000, of the Brazilian Securities and Exchange Commission – CVM. He was also chairman of the Council of Securities Regulators of the Americas – COSRA. Besides practicing law, Mr. Costa e Silva is currently member of the Board of Directors of Companhia Vale do Rio Doce and Banco do Brasil S.A.Marco Antonio Mouro de Castro Mr. Castro received a degree in Business Administration from Fundação Getúlio Vargas in 1977, and a post-graduate degree in Business Economics from the same institution in 1980. He concluded courses in Strategy and FinancialBoard Member Planning at PACE University, and Capital Markets, at the New York Institute of Finance, both in New York. Mr. Castro has broad experience in capital markets and also in environment-related projects.Leo Eduardo da Costa Hime Mr. Hime received a degree in Statistics from the Federal University of Rio de Janeiro, in 1975, and a post-graduate degree in Finance from the Pontifícia Universidade Católica, in 1982. He held executive positions in Cia. InternacionalBoard Member de Seguros and in Sul América Seguros, during the years from 1977 to 1989. Currently he is the director in charge of areas of business planning and development of Banco Arbi S.A. Mr. Hime holds executive positions in Enguia Power Ltda. and Quantra Petróleo Ltda., and is a member of the board of directors of Mineração Caraíba S.A.Evon Zartman Vogt III Mr. Vogt is a North American citizen, controller of the shareholder Zartman Services LLC, pertaining to the control block of Brasil Ecodiesel. Mr. Vogt is graduated in Harvard and MBA by the University of Colorado, and he is also anBoard Member investor with vast experience in the Latin American market, including 10 years of experience in international markets at Wells Fargo Bank. Mr. Vogt was given a medal from the “Ordem de Rio Branco” (in recognition of outstanding services and civic merit) in 1996 by the President of Brasil at that time, Mr. Fernando Henrique Cardoso. 49
    • Executive OfficersThe Executive Board of Brasil Ecodiesel is composed of at least three and at most 16 members, either shareholders ornot shareholders, residents of Brazil, elected by the Board of Directors for a term of one year, with reelectionpermissible, who must remain in their office until the installation of their successors. The installation of the members ofthe Executive Board is dependent on acceptance of the Term of Agreement provided for by the Regulations of theNovo Mercado listing segment on the São Paulo Stock Exchange (Bovespa).The Executive Board of the Company is charged with the administration of the general operations and for practicing allof the acts required or convenient for said administration, notwithstanding those acts which due to Brazilian Law or theBylaws of Brasil Ecodiesel are attributed to the responsibility of the General Meeting of Shareholders or of the Board ofDirectors.At present, the Executive Board of the Company is composed of eight members, elected by the Board of DirectorsMeeting held on April 16, 2007, except for Mr. Fernando Costa, the company’s executive officer, that was elected attheir Board of Directors’ meeting held on August 6, 2007, with a term of office lasting until the Annual General Meetingthat will approve the financial statements for fiscal year 2007. 50
    • Executive OfficersNelson Jose Cortes da Silveira President of Brasil Ecodiesel, Nelson Silveira holds a degree in Electric Engineering, graduated from Fluminense Federal University. Mr. Silveira has participated of several projects in the electric energy sector, including makingCEO projects, executing and managing brickworks on transmission lines, hydroelectric power plants, and other plants. Mr. Silveira is founder and partner of the company, and worked as director of Enguia Power Ltda. from 2001 to 2004.Ricardo Luis de Lima Vianna Investors Relation’s Executive Director of Brasil Ecodiesel, Ricardo Vianna holds a masters degree in Economics and has occupied Director’s posts in financial institutions such as BNDES, Banco Itamarati, Banco Inter AmericanCFO and IRO Express and Banco Fibra, acting in the capital markets and corporate finance areas. Mr. Vianna has worked as a consultant from March 2005 to February 2007.Guilherme Augusto D’Avila Mello Economist and Brasil Ecodiesel’s Executive Director, Mr. Raposo was the Logistic Director of CompanhiaRaposo Siderúrgica Nacional between March 2005 and December 2006, being promoted from his Logistic Manager job, which he occupied from January 2002 to February 2005.COOFernando Antonio Lopes Costa Mr. Fernando Costa holds a bachelor’s degree in chemical engineering and a graduate degree in marketing. He served as director of the Energy business unit of Sotreq S/A, the exclusive distributor for Brazil of Caterpillar, whereCCO he was also responsible for sales, leasing, engineering, product support, administration and finances activities. Mr. Costa was involved in the development and installation of the largest biogas plant, powered by landfill gas, and the supply and installation of 75% of the government’s emergency plants during the country’s electricity crisis. 51
    • Executive OfficersEduardo de Come Brasil Ecodiesel’s Director since June 2005, Mr. Come received an undergraduate degree in Economics and a graduate degree in Finance. Occupied the Business Development Manager job on VolkswagenOfficer Financial Services (currently Banco Volkswagen S.A.), between 1994 and 1996. From 1996 on, Mr. De Come worked at DF Vasconcellos S.A., being Market Relation’s and Financial Officer between 2001 and 2005.Ricardo Vergilio Alonso da Silva Brasil Ecodiesel’s Director since May 2004, Mr. Alonso received an undergraduate degree in ElectricalOfficer Engineering and Electronics and a graduate degree in Marketing. Mr. Ricardo Alonso has worked in Grupo Schneider Electric Brasil with jobs such as World Accounts’ Marketing Coordinator and National Marketing Manager of Strategy and Sales.Francisco Eduardo Garcez Ourique Brasil Ecodiesel’s Director since April 2006, Mr. Ourique received an undergraduate degree inOfficer Economics. After working as an executive in Europe for 10 years, Mr. Ourique was Commercial Director of Bozzo Commerce Café between 1986 and 1992. He is also Shareholder and Manager of Supremo Coffee Importação e Exportação since 1995.Ezio Guiliani Mr. Giuliani received an undergraduate degree in Business Administration and a graduate degree rs inOfficer Finance. Mr. Giuliani has worked for 6 years in multinational auditors and consultant companies, he also occupied Executive Direction jobs in companies such as FIAT do BRASIL and FRIBOI. Since 2003 Mr. Giuliani was acting as companies’ consultant. 52
    • New Market São Paulo Stock Exchange Highest Corporate Governance LevelThe Market Companies volunteer themselves to adopt, in addition to the rules required by law, corporate governance rule. Its exclusively composed by Common Shares.The Company A company listed in the New Market has the following additional obligations: Tag along for all shareholders at the shareholders contract sales; Public offer of all circulation shares; Board of Directors formed for at least 5 people of which at least 20% have to be independent counsellors; Cash Flow demonstratives; IFRS or US GAAP international standards; Public meetings with investors and analysts at least once a year; Annual timetable of the corporate events; Publish the terms of the contract signed between the company and the related parts; Minimum float of 25% of the shares. 53
    • Corporate GovernanceBovespa’s New Market since November 22nd 2006:• Transparency and high standard of corporate governance• 100% Tag-along in case of control lienTransparency and Governance Standards – Recent Facts:• Election of Board of Directors with 4 independent directors;• Approval of “Política de Divulgação” and of “Código de Conduta”• Hire of Market Maker: Higher liquidity of shares• Entered IBrX – Index counting with the 100 most traded shares• Auditors are Deloitte Touche Tohmatsu. They have been in place for 2 yearsShareholders’ Agreement• On August 14, 2006, the shareholders Ecogreen, ZartmanServices LLC. and Nelson José Côrtes da Silveira signed a shareholders’ agreement valid for a term of three years, regulating (1) The transfer of their shares; (2) The exercise of voting rights; (3) The election of the members of the Board of Directors of the company. All shares owned by these shareholders are bound by this agreement, however on September 12th, 2007, Eco Green reduced the number of shares linked to the shareholders agreement and no longer indicates members to the Board. 54
    • Corporate GovernanceBoard of Directors: 9 members, of which 4 are independent directors (*): • Chairman of the Board: Jorio Dauster (*) Luiz Gylvan Meira Filho (*) • Vice Chairman: Eduardo Modiano (*) Marco Antonio Moura de Castro • Evon Zartman Vogt III Nelson José Côrtes da Silveira • Francisco da Costa e Silva Wagner Pinheiro de Oliveira (*) • Leo Eduardo da Costa HimeThe Executive Board will be composed by a maximum of 16 people: 1 Chief Executive Officer Up to 4 Executive Officer 1 Investor Relation Officer Up to 10 Officers 55
    • Key StrategiesMaintain the leading position as the largest and sole biodiesel dedicated producer in Brazil• Given the companys pioneering and leading position, Brasil Ecodiesel will be able to benefit from its consolidated relationship with customers, governmental bodies, farmers, unions, which shall enable the company to actively participate in future developments of the sectors frameworkContinue to develop new raw materials origination chains and increase the productivity of existing sources• Such strategy will be conducted by continuing the development of partnerships with local producers, in order to indentify more productive and profitable sources of vegetable oil.Strengthen institutional relations in order to expand and consolidate the biodiesel market• Brasil Ecodiesel has entered into memoranda of understanding with government bodies in order to coordinate actions aiming at the social inclusion of new family farmers. It granted the tax benefits to the company.Establish fuel distributor loyalty• The company plans to invest in its own tanks in order to store biodiesel at the distributors facilities. Besides the refineries, fuel distributors are the only entities authorized to blend biodiesel with mineral diesel. The diesel distribution industry in Brazil is highly concentrated, with the five principal distributors accounting for 76.3% of market share as of 2006. 56
    • Key StrategiesDevelop logistical efficiency Brasil Ecodiesel is working on the implementation of an integrated and efficient logistics system in order to ensure competitiveness of its prices and cost reductions, adopting tactics such as: Locate its warehouses and crushing units near oilseed suppliers and customers Continuously expand its access to agricultural suppliers Hire third parties logistics companies and operate its own transportation system in the medium termEstablish biodiesel export channels Despite currently having the domestic market more attractive than the export markets in terms of revenues, due to BRL valorization, low biodiesel prices in EU and US subsidies (see world market section), Brasil Ecodiesel foresee real opportunities to export biodiesel to important consumption areas such the EU, mainly because market expansion allied to limits of local production. Negotiations with certain biodiesel importers are already underway and the Company signed a MOU with Noble Resources, a swiss trading company, to expand exports possibilities. The companys production structure is able to meet all necessary technical specifications requirements by the EU and the USPromote the development and environmental conservation By producing a clean and renewable fuel, Brasil Ecodiesel intents to obtain an ISO 14001 environmental certification. It will also help the Companys aim at obtaining access to the carbon credit market 57
    • Mid/long-term Challenges Origination Transportation Reduction of theIncrease in the non- average radius of feeding origination transportation chains Strategy between plantation and processing Production Commercialization- Industrial efficiency Long-term relationships- Cost and Productivity (Free Market X Auctions) 58
    • Diversification of Vegetable OilsVegetable oil – Type and supplier feedstock diversification Soy Oil Sunflower Oil Industry Complementariness Intensive and Family Farming Jatropha Curcas Castor Oil PlantFamily Farming Diversified sources of vegetable oil reduce risks and lead toand Own Land good use being made of the Brazilian agricultural potential. Family Farming 59
    • Diversification of Vegetable OilsFeatures of the main crops for energy use CASTOR OIL JATROPHA SOYBEAN SUNFLOWER PLANT CURCAS • 18 - 20% of oil in • 40 - 45% of oil in • 45 - 50% of oil in • 30 - 39% of oil in the seed the seed the seed the seed • 440 kg of oil / ha • 810 kg of oil / ha • 750 kg of oil / ha • 780 kg of oil / ha • Global commodity • Local commodity • Restricted world • Without world market market • Developed • Developed • Little developed • Little developed technologically technologically technologically technologically • Not perennial • Not perennial • Not perennial • Perennial • Edible • Edible • Not edible • Not edible • Intensive in Brazil • Starting in Brazil • Starting in Brazil • Starting in Brazil 60
    • Diversification of Vegetable OilsFocus on inedible crops with a high oil content Better ratio between oil and meal /cake Without competition between food and power Availability of land Work intensive – positive impact on human and social development SOYBEAN 4.0 CASTOR SUNFLOWER OIL JATROPHA PLANT CURCAS 1.5 1.0 1.0 1.0 1.0 1.0 1.0 Oil Meal Oil Meal Oil Cake Oil Cake Marginal use Expansion of production 61
    • Strategy x TacticsAs a fully-dedicated biodiesel player with its 6 plants currently operating, the company was able to participate in all ANP / Petrobrasauctions with a substantial shareThis enabled the company to be viewed as a non-eventual player in the biodiesel market, differently from the other players,including commodity companiesHaving the track-record of participating in all auctions, despite selling biodiesel with lower prices, the company was able to remainas one of the few reliable players in the sector and able to deliver all biodiesel bidded in the auctions.Such strategy could be witnessed in the last Petrobras auction, where few remaining players were able to sell at higher prices, ascenario showing that only those with enough capacity and raw material diversification potential will be the ones able to supply thenew mandatory market.According to Brazilian State level legislation, all vegetable oil acquired within the state of the production of biodiesel is exempt fromICMS (12% VAT Tax). Brasil Ecodiesel located its plants of Iraquara, Itaquí and Rosário where there are abundant vegetable oilofferItaquí and Crateús plants are able to import vegetable oil from abroad with import and ICMS tax exemption, if used to its biodieselproduction. These two plants can receive imported vegetable oil with competitive advantagesAs the Company is a pure biodiesel producer, its plans and strategy are fully dedicated to be the lower cost biodiesel producer inBrazil. The development of integrated network of family and commercial farmers, the development of a multi feedstock biodieselplant, the development of own production of non feed grains (such as jatropha), puts the company ahead of its competitors 62
    • Revenues Exports PotentialThe world is increasing significantly its demand for biodiesel. However, the main markets such as Europe and USA won’t haveenough land to meet its demands: 243% 145% 132% 60% 40% 35% 18% 16% USA B5 USA B10 Europe B5 Europe B10 Percentage of current area planted with oleaginous plants necessary to replace X% of petrodiesel by biodiesel. Percentage of total current area planted necessary to to replace X% of petrodiesel by biodiesel. Source: International Energy Agency – Biofuels Report 2004Brasil Ecodiesel has focused on local market until now, aiming at consolidating the brazilian biodiesel market, but will soon beginexports, that are already under negotiation.Moreover, international markets were not attractive because: Real currency evaluation, low prices in European market andsubsided exports from US to Europe (B99 mechanism).Those obstacles are being removed: Oleoline indicates prices in the European market have recouped and are becoming attractive;European Biodiesel Board is preparing an action of unfair trade to de subsided US B99 exports. 63
    • Biodiesel vs Mineral DieselThe biodiesel is today more expensive than mineral diesel. The long term trend is that this relation will change with the increasingindustrial efficiency and more productive oilseeds, that are being developed by several R&D entities, including Brasil EcodieselHowever, both products can’t be compared in a linear way, because: Biodiesel is a premium product (see slide 15). The drivers for biodiesel consumption aren’t related to price, but to energy supply security, environmental purposes, social development, among others. 64
    • Operational ReviewSection V
    • Competitive AdvantagesLeadership in the Brazilian Biodiesel Market• The company is the leader, pioneer and one of the few exclusive biodiesel producer in Brazil, responsible for approximately 53% of the national production in 2006 and 2007 according to the ANP. In addition to that, Brasil Ecodiesel accounted for 42.4% and 35.9% of the total biodiesel volume offered in the auctions also organized by ANP and Petrobras, respectively, for delivery in 1H08. Despite the existence of other producers which operate at substantially lower capacity, Brasil Ecodiesel is the actual sole biodiesel producerInnovation in the formation of the raw material origination chains Brasil Ecodiesel believes that the profitability of biodiesel is linked to the availability, diversification and production cost of the vegetables oils used as raw materials. In the wake of that, the company is already focused on: Producing vegetal oils for exclusive industrial consumption, such as castor plant and jatropha Producing vegetal oils that present a more favorable balance of oil to meal, such as sunflower Using vegetable oils that, due to their low added-value (such as cottonseed), are not currently extracted to their full potential beginning e The acquisition of vegetable oils that are readily available in the market in order to meet short-term biodiesel production needsProduction Flexibility In line with its diversification strategy with respect to the origination of raw materials, Brasil Ecodiesel uses flexible technology enabling it use various types of vegetable oils that it acquires, in addition to permit the production of various types of biodiesel, including those that are required by the company in order reach the international markets. 66
    • Competitive AdvantagesStrong Human and Social Development Brasil Ecodiesel was able to comply with the Brazilian regulatory framework, which grants benefits to the local producers that motivate the family-owned agriculture. The company has already developed the relationship with more than 80,000 families, directly or through cooperatives. The company understands that such type of relationship should provide: institutional stability, as those relationships shall contribute a closer proximity of Brasil Ecodiesel with the Brazilian Government, to an extent that the company will be able to participate in eventual restructurings of the Brazilian biodiesel market framework access to a guaranteed supply of raw materials through the support of the suppliers fiscal incentives ahead of production facilities that serve for human and social purposesExperience in the construction and implementation of industrial projects The company has the experience in the development of industrial projects and hence is able to build its own plants. All equipments and technology are totally sourced domestically, permitting the implementation of projects at lower costs in a timely fashion, in order to meet an eventual increase of future demand.Decentralization of the operational structure All facilities are decentralized in different states of Brazil, what benefits the company from taking additional tax advantages, from maximizing production and logistics practices and from limiting its exposure to bad weather or crops failuresUse of by-products in its own manufacturing process The processing of Biodiesel generates some by-products such as biomass, glycerin and organic fertilizers, which can be used for the reduction of production costs (biomass for heating generation and fertilizers for the crops). By-products can also be sold. 67
    • Integrated Operating Process BIODIESEL PRODUCTION AND COMMERCIALIZATION Crushing Alcohol Transesterification PurchaseChemical industries Certification Storage Refineries and Distributors Exports Consumer Market 68
    • Purchasing and ProductionPurchase of Raw MaterialGeneral procurement Main raw materials purchased: Vegetable Oil Methanol Catalyst Other Purchasing is performed by corporate level departments, being the vegetable oil purchased by a trading of oils department, oilseeds through areas responsible for agriculture development, and the other inputs, such as methanol, catalyst and daily consumption materials, by a corporate purchasing department. To facilitate optimal purchasing arrangements, production forecasts are defined weekly by a production planning meeting performed with the presence of industrial, commercial and logistics areas. Based on such meeting, the PCP (Planning and Control of Production) area analyses necessity of purchasing raw materials and other inputs, taking into account inventory levels, material lead times and minimum batch sizes etc. The information is send to purchasing areas, which complete purchasing process. 69
    • Purchasing and Production (cont)Vegetable oil Access to vegetable oil in volumes necessary and at reasonable prices is one of the most important sector success factors; Currently, the company uses soy oil as its main raw material, considering that it is the only available vegetable oil produced in large scale in Brazil; Brasil Ecodiesel enjoys strong long-term relationship with its suppliers (i.e. since early 2006), which represents a further competitive advantage; Inventory policy and management: Brasil Ecodiesel receives vegetable oil on a daily basing in its plats, in a continuous process of receiving raw material and shipping biodiesel. The average time a vegetable oil stays in inventory before being used in production is 5 days. Quality control: Vegetable oil quality is controlled each time a delivery of oil is done in our plants, by the local laboratories. Every plant count with a laboratory to control the quality of the raw materials and the biodiesel produced. 70
    • Purchasing and Production (cont)Brasil Ecodiesel is focused on farm crops intensive in labor: Integration of the Supply – Programs of Loyalty with Farmers Institutional Representativeness – Relationship with rural organizations Fiscal Incentives Community Production Center Integrated Network of Family Farming • Santa Clara Center, founded in 2003 • ~ 80,000 families by the end of 2007 600 Municipalities attended 76 71
    • Purchasing and Production (cont)In the third quarter 2007 the company acquired two farms in the state of Bahia with combined area of 12,131.2 hectares, andin October it acquired a third farm in the same region with 7,671.6 hectares, which will be administered as one combined farmWith these acquisitions, Brasil Ecodiesel now has 63,349.4 hectares of own farmland for plantingThe own farms will be mainly dedicated to jatropha curcas production, which takes around three years to begin producingseeds, but are perennial and produces for 40 yearsCastor plants will be planted in the Company’s farms, in a consortium with jatropha, during its developmentIn the 2007/2008 planting season (Sep-07 to Mar-08) the company will plant approximately 12,000 hectares of jatropha curcasand castor on part of the farms located in the states of Bahia, Ceará, Minas Gerais and Piauí. Farms Area - Hectares Cratéus - CE 3,980.3 Parambu - CE 11,584.4 Buriti - PI* 17,910.7 Anda Só - PI 4,282.0 Violeto - PI 3,325.2 São José - MG 2,464.0 Relevo - BA 5,011.2 Nova Brasília - BA 7,120.0 Itaúna - BA 7,671.6 Total Area 63,349.4 *Santa Clara Nucleus Area 72
    • Purchasing and Production (cont)Methanol:• There are only two methanol producers in Brazil, Copenor, that produces around 104,430 m3 per year in Bahia and Prosint, that produces around 187,975 m3 in Rio de Janeiro;• Until September 2007, most part of methanol was purchased from Copenor and a minor part from Prosint, considering that most part of our activities have been concentrated in the northeast region;• An option to supply Rosário do Sul plant is import methanol from Chile, main global producer and responsible for the supply of around 90% of Brazilian imports.Catalysts and Other inputs Purchasing department is responsible for establishing long-term relationships with suppliers, aiming at good negotiations conditions Suppliers are regularly reviewed by Brasil Ecodiesel, in order to check if they comply with the Company’s quality standards The subsidiary Rede de Compras Intermediacao de Negocios, Comercio de Produtos e Insumos Agricola Ltda, is currently responsible for the purchase of all the necessary agricultural inputs to the Company’s farms and partnerships with farmers. 73
    • Raw Material Prices Vegetable Oil • Soybean oil and palm oil are the main vegetable oils produced in the world • Vegetable oil prices have rocketed since mid-2006, mainly due to future biodiesel production expectations • High mineral oil prices are also influencing vegetable oil markets: vegetable oils are now considered as part of the energy sector, not only from the food sector anymore • Brasil Ecodiesel expects that vegetable oil prices can continue increasing, but in a much lower scale than on the latest years. However, company doesn’t want to be totally exposed to commodity prices volatility and its strategy of raw material diversification is part of it. The trend is that biodiesel prices increase as vegetable oil becomes higher Risk Management Management of raw material prices risk is done through two main actions: Medium term contracts with suppliers allow the Company to fix prices for some periods; Hedging policy: Brasil Ecodiesel has credit lines approved by Macquarie Bank and Standard Bank in order to make hedge operations of soybean oil (CBOT) and US$, to reduce exposure to market price fluctuations. Some operations have already been done, allowing the Company fixed its margins.CBOT – Chicago Board of Trade 74
    • Sales and MarketingMarketing – Goals for after auctions period: Establish long term relationship with fuel distributors (top 5 count with 76.3% of diesel distribution market); Guarantee continuous supply to the clients; Product quality; Export opportunities. Develop new consumer markets for biodiesel; Develop partnerships with final consumers, integrating the chain; Explore markets for by-products, through the subsidiary “Rede de Compras”; Make institutional efforts to anticipate higher percentages of mandatory blends to mineral diesel; Begin exports;Pricing Cost based prices: main cost is vegetable oil; Long term contract prices should be based on market prices for vegetable oils, plus a spread: higher prices than today; 75
    • CustomersActual customers are Brazilian mineral diesel producers – Petrobras and REFAP – which purchase biodiesel through publicauctions organized by the ANP or by themselves;The trend on the medium term, when the market becomes free, is that our main customers will be fuel distributors, with whom wealready have a relationship and initial negotiations;Potential future clients: Companhia Brasileira de Petroleo Ipiranga, Texaco Brasil S.A., Shell Brasil S.A., Esso Brasileira dePetroleo Ltda, BR Distribuidora….Petrobras is also a potential buyer in the long term, considering its state-owned origin and the government disposal to expandbiodiesel consumption in Brazil; 76
    • Distribution and LogisticsDistribution and Logistics Brasil Ecodiesel has contracts with third party logistics companies (20 different companies) to transport its raw materials and to distribute its product when the contracts are on CIF terms; Railroads, roads and marine transport systems are used by the Company: Our logistics of producing and commercializing biodiesel includes the following stages: (i) fragmented collection of the production of the family farmer; (ii) centralization and sending of this production to crushing units and transportation of the vegetable oil obtained to transesterification units; (iii) transport to these units of other raw materials for producing biodiesel, including other types of vegetable oils acquired from several vendors, methanol and catalyst; (iv) transportation of subproducts for commercialization or own use; and (v) distribution of biodiesel. The local of the plants of Brasil Ecodiesel were defined considering the logistic of transport available on the regions: Floriano, PI – Near to a federal road, to the Transnordestina railway and to the Parnaíba River; Crateús, CE – Adjacent to a federal road and to the CFN railway, that goes from Pecém Port (CE) to Itaqui Port (MA); Iraquara, BA – Adjacent to a federal road that establishes a connection between grain producer region and Salvador City; Itaqui, MA – Close to the Port, adjacent to storage facilities of Transpetro, to the Carajás railway and to the road that goes to the Port; Porto Nacional, TO – Adjacent to a federal road, to Tocantins River and to the future expansion to Norte-Sul railway; Rosário do Sul, RS – Adjacent to a federal road, the plant also counts with a railway station inside its area, that connects the plant to Rio Grande Port and to Argentina. Brasil Ecodiesel counts with a subsidiary, Ecotrans Transporte, that coordinates the agricultural fleets; 77
    • Financial ProfileSection VI
    • Historical Financial Overview Quarterly Gross Revenues evolution (BRL 1000) Quarterly B100 sales evolution (m3) 140,000 60,000 129,050 53,309 120,000 50,000 100,000 75% 40,000 5% 80,000 R= = 7 27,697 33,668 CAG 68,502 30,000 GR CA 61,130 60,000 20,000 40,000 30,448 13,637 18,296 8,414 20,000 12,780 10,000 5,839 4,531 1,839 - - 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 Quarterly B100 prices evolution (BRL) 3.00 2.46 2.47 2.42 2.19 2.23 2.21 2.03 2.00 1.00 0.00Source: Company’s Financial Statements 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 79
    • Dividend PolicyDividend’s Policy The Company intends to pay dividends and/or interest on equity in fiscal period in the approximate amount of 25.0% of adjusted net income, in accordance with the Brazilian Corporate Law and the Company’s by-laws. In accordance with article 189 and onwards of the Brazilian Corporate Law and pursuant to Brazilian accounting practices and CVM regulations, preferably through two payments per fiscal year. Notwithstanding, the Company may pay dividends or interest on equity in an amount lower than 25.0%, whenever required to do so by legal or regulatory dispositions, or due to its financial situation, future prospects or growth as a result of contractual restrictions, regulatory changes and the overall economic situation, plus any other factors considered relevant by the Board of Directors and the Company’s shareholders. The annual dividend declaration, including the payment of dividends in addition to the minimum mandatory dividend, requires approval from a General Shareholders’ Meeting through a majority vote and will depend on several factors. including operating results, financial conditions, cash needs, future prospects and any other factors that the Board of Directors and shareholders may find relevant. Brasil Ecodiesel has not yet paid any dividends or interest on equity, since the company did not declare any net income in the previous fiscal years. 80
    • Debt Maturity / Structure (as of 09/30/2007)Brasil Ecodiesel’s net debt increased in the quarter due to two main factors: After a long period of operations based primarily on own capital, the Company began to balance its capital structure, financing the bulk of its working capital with short-term debt. In addition, the demand for funds for investment in fixed assets still being carried out reduces the Company’s balance of cash and cash equivalents. Indebtedness BRL 1000 2Q07 3Q07 Short Term 28,302 92,416 Long Term 40,854 45,459 Total Indebtedness 69,156 137,875 Cash and Equivalents 23,013 5,787 Net Debt 46,143 132,088100% of the total Debt is in BRLThe financing is guaranteed by: commercial pledge, promissory notes, fiduciary lien on equipments and fixtures,and fiduciary assignment on receivables and marketable securitiesMost of the credit lines were renewed before December 31, 2007. 81
    • Debt Maturity / Structure (as of 09/30/2007)Debt Profile Maturity ScheduleConsolidated Sep-07 ConsolidatedFinancial Institution Type Interests Maturity Sep-07 2008 13.86Caterpillar Financial S.A. FINAME TJLP + 5% a.a. Mar-08 0.40 2009 17.58Banco CNH Capital S.A. FINAME TJLP + 6% a.a. Nov-08 0.36 2010 and after 14.02Banco Fibra S.A. FINAME TJLP + 4.5% a.a. Mar-10 - Total 45.46Banco Fibra S.A. MODERMAQ TJLP + 2.7% a.a. Oct-10 6.50Banco ABN AMRO S.A. MODERMAQ TJLP + 7% a.a. Aug-10 1.93 100Banco ABN AMRO S.A. Financing 6.04% a.a + CDI Oct-10 46.47 90Banco Fibra S.A. Compror 3.65% a.a + CDI Feb-08 28.84 80Banco ABC S.A. Compror 3.65% a.a + CDI Jan-08 5.89 70Banco Banrisul S.A. Compror 3% a.a + CDI Feb-08 4.51 60Banco Banrisul S.A. Compror 2.4% a.a + CDI Dec-07 5.59 50Banco Bradesco S.A. Compror 3.65% a.a + CDI Sep-08 8.48 40Banco Fator S.A. Compror 3.65% a.a + CDI Jul-08 19.83 BRL mmStandard Bank S.A. Compror 3% a.a + CDI Oct-08 9.00 30Others - - - 0.08 20Total 137.88 10ST 92.42 0 Until Sep 08 2008 2009 2010 and afterLT 45.46 Maturity Bank Guarantee Banco Standard de 100% of the total Debt is in BRL Receivables from Petrobras; Pledge of Inventories Investimento Banco Fator Pledge of Inventories The financing is guaranteed by: commercial pledge, aval, Bradesco Receivables from Bunge promissory notes, fiduciary lien on equipments and Banrisul Receivables from Petrobras fixtures, and fiduciary assignment on receivables and ABC Brasil Clean Banco Fibra Receivables from Petrobras marketable securities. Guarantee from Nelson Silveira (CEO), Mortgage and e Banco ABN Receivables from Petrobras and a negative pledge on all of the companys assets Other Finame The asset bought with the financing. 82
    • ConclusionSection VII
    • Conclusion Leadership Well defined in the growth Brazilian strategy Market Innovating Strong Model ofExportation Origination Potential of Raw Material Integrated Sustainable Biodiesel Process of Operation Flexible Human and Production Social Focus 84