Message from the Business Leader

GRI 1.1

GRI 1.2

The defining feature of the 2012-2013 crop was our coming of age. This was the first crop year with all nine units of Odebrecht Agroindustrial fully operational. With it we saw significant advances in the development of our teams, in agricultural productivity gains and in the strengthening of our industrial activities, using methods in accordance with our philosophy of sustainable development.

In February 2013 we changed our brand name. Now we are Odebrecht Agroindustrial, in line with the visual identity of the Odebrecht Organization. This change also recognizes the importance of the Brazilian bioenergy sector for Odebrecht, which is a global organization with more than 200 thousand members, operating in 60 countries across five continents.

Odebrecht Agroindustrial employs more than 15 thousand people who spend each day producing the clean and renewable energy that Brazil needs. Our leaders are guided by the Odebrecht Corporate Technology (TEO), and their personal mission is to train and develop professionals in the different areas where we operate, who can understand, take an active part in and produce results for the business.

During the 2012-2013 crop, one of our main priorities was to invest in our members, their families and the communities where we operate. More than R$6 million was invested in training and skills programs, twice as much as in the previous year, and another R$4 million went towards the Social Energy program for Local Sustainability, from which more than 10 thousand people have already benefited directly. We also showed major gains in health, safety and environmental indicators, and we are proud to say that our obsession with respect for life has made us one of the safest operators in Brazil.

The year has been extremely challenging for us, because of the macroeconomic situation. Weak ethanol prices, allied with the low profitability of the sector, demanded even more business discipline of our teams, and obliged them to concentrate on productivity.

We learned a lot, and I can say with certainty that we have transformed obstacles into opportunities, thanks to the dedication of our employees. Even in the face of this adverse scenario, which was not helped by the damage to the crop caused by bad weather, our business plan, dating back to 2007, the year of our foundation, remains on track. Our long-term vision, as a member company of the Odebrecht Organization, motivates us to exceed our goals year after year.

We achieved a production volume very close to our goals, showing strong growth over the previous year. The volume of sugarcane processed rose from 12.7 million to 18.9 million tons, a 49.5% improvement. And for the second year running we planted a significant area of new cane fields. We added more than 80 thousand hectares, adding credibility to our expansion plans. We are now the largest producer of electricity from sugarcane biomass in Brazil, and the country’s second largest ethanol producer.

Since the company came into being we have invested more than R$9 billion towards our target of a 40 million ton milling capacity. Our nine agroindustrial units are located in four states: São Paulo, Goiás, Mato Grosso and Mato Grosso do Sul. Our plants have a joint milling capacity of about 35 million tons of sugarcane, producing 3 billion liters of ethanol, 700 thousand tons of sugar and 3 thousand GWh of electricity.

This year we concentrated on productivity, especially agricultural productivity. This continues to be one of our greatest challenges, since the installed capacity of our units is higher than the amount of cane currently available. We invested more than R$1 billion in this crop, mainly in expanding and maintaining our cane fields.

During the year we designed a new platform for the Odebrecht Agroindustrial management system, which was launched on the first day of the 2013-2014 crop and will serve to standardize our agroindustrial units and bring our processes up to a high standard. We have to be competitive to meet the growing demand for ethanol, and we must focus on constantly improving our processes.

We have opened up the important North American ethanol market, exporting almost 10% of our production, and this gives us more commercial flexibility at times when the domestic market is decreasing. Seven of our nine units have been awarded the seal of the Renewable Fuel Standard (RFS2), which is the basic requirement for shipping biofuels to the United States. Two of our units had already obtained the Bonsucro (Better Sugarcane Initiative) certificate during the 2011-2012 season, and the Rio Claro unit, in Goiás, was certified this year.

In accordance with the Odebrecht Organization’s Sustainability policy, we have continued to promote sustainable development in the communities directly influenced by our operations, by investing in culture, education, income generation, healthcare, safety and environmental preservation, in partnership with the local town councils and communities.

We shall continue to grow at a fast rate over the next three years, focusing on productivity gains from the quality of our cane fields, the efficiency of our processes and the skill of our members.

Our goal for 2013-2014 is to plant more than 100 thousand hectares of sugarcane, to reach a level of 25 million tons of milling. This will enable us to produce 1.7 billion liters of ethanol, to co-generate 2.5 thousand GWh of electricity and to produce more than 580 thousand tons of sugar.

We reaffirm our commitment to make Odebrecht Agroindustrial even stronger during the new cycle that is beginning now. For this we shall continue to count on the enthusiasm and engagement of all our members, so that we can face the challenges to come. The purpose of this document is to give you a perspective of our journey over the last year, and to present our strategic vision and the set of actions through which we propose to contribute to sustainable growth in Brazil.

 

We hope you enjoy reading it!

Luiz de Mendonça

Luiz de Mendonça

Business Leader of
Odebrecht Agroindustrial

"We achieved a production volume very close to our goals, showing strong growth over the previous year. The volume of sugarcane processed rose from 12.7 million to 18.9 million tons, a 49.5% improvement. And for the second year running we planted a significant area of new cane fields."