Brazilian sugarcane mills for foreign investors
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Brazilian sugarcane mills for foreign investors

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Brazilian sugarcane mills for foreign investors Brazilian sugarcane mills for foreign investors Presentation Transcript

  • Orlando González Ricardo PintoJanuary/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
  • 2009 RANKING: BRAZILIAN PRODUCTION AND EXPORTS Number of Exports Main Products Production Exports Markets 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 Sources: USDA and MAPA
  • AGRICULTURAL PRODUCTION INDEX: 1992-2019 FAO-OCDE Projections “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) 19
  • AGRICULTURE AREA 2007/2008 HARVEST Most of recent expansion in agricultural area is on pasture landSource: Ministry of Agriculture, Brazilian Institution of Geography and Statistics (pastures – 2006)
  • BRAZILIAN AGRIBUSINESS EXPORTS MAIN PRODUCTS – 2010* Total: US$ 73.9 billion * From November 2009 to October 2010 Source: Ministry of Development, Industry and External Commerce. 2009 Elaboration: Ministry of Agriculture 21
  • BRAZILIAN AGRIBUSINESS EXPORTS MAIN DESTINATIONS – 2010* Total: US$ 73.9 billion * From November 2009 to October 2010 Source: Ministry of Development, Industry and External Commerce. 2009 22 Elaboration: Ministry of Agriculture
  • BRAZILIAN AGRIBUSINESS COMPETITIVE ADVANTAGES Strong, thriving economy & Institutional framework Leadership in tropical technology Natural resources abundance (land, water, solar energy) Farming vocation & Business entrepreneurship
  • EVOLUTION OF FOREIGN DIRECT INVESTMENTS IN BRAZIL (2001 – 2009) 45.000 43.886 40.000 35.000 33.705 30.444 US$ million 30.000 25.000 21.522 22.231 21.042 20.265 20.000 18.778 15.000 12.902 10.000 5.000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 24
  • FOREIGN DIRECT INVESTMENTS By origin - average 2007-2009 Others Netherlands 25,4% 17,1% USA Canada 16,5% 3,4% Cayman Islands Spain 3,9% 8,7%Germany 4,9% France Japan Luxemburg 5,7% 5,8% 8,6% 25
  • Millions of hectares Brazil 851.4 % Brazil % arable land 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 IBGE2006 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 growthis 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 hydroelectricityAvoided CO2 emissions > 600 million tons since 1975 Source: UNICA
  • Other renewable sources 3,8% Uranium Coal 1,4% Natural Gas 4,8% 8,8%Wood and other Petroleum and biomass derivatives 10,1% 37,9% Sugarcane 18,1% Hydroelectricity 15,2% Source: BEN (2010). Elaboration: UNICA
  • FLEX-FUEL ALREADY REPRESENT ALMOST 40% OF THE TOTAL BRAZILIAN FLEET (OTTO-CYCLE), EXPANDING THE DEMAND Accumulated sales of flex-fuel vehicles Jan, 2003 Feb, 2010 Source: ANP and ANFAVEA. Elaboration: UNICA
  • ETHANOL USE ISN’T LIMITED TO CARS… Ethanol-powered buses (E95) - still a pilot project in Brazil Flex-fuel motorcycles Brazilian-made crop dusting planes running on ethanol Biobutanol Production of diesel from sugarcane at commercialProduction of bioplastics scale by 2010
  •  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.