"Crop failures have given us a challenge of how to optimize management and operating processes in order to adapt the business to opportunities in the market, thereby minimizing the risks. The challenge is not to produce more sugarcane, but to optimize our productive processes. The great surprise has been the potential harvest in Pedro Afonso,in the northern region of the country."

Ricardo Santos (vice-president of the Sugar & Bioenergy business)

Sugar & Bioenergy 2.2

Ever since 2006, Bunge has been involved in the commercialization of sugar, ethanol and the cogeneration of energy. It has eight sugarcane mills, more than 200,000 planted hectares and investments that are projected at around US$ 2.5 billion for the period between 2012 and 2016. Its first unit, the Santa Juliana mill, in the region known as the Triângulo Mineiro, was purchased in 2007 and, two years later, construction was begun on the Pedro Afonso plant (TO) – both in partnership with Japan's Itochu, one of the largest trading companies in the world. Pedro Afonso is Bunge's first greenfield unit in Brazil. At the same time, the company bought a majority stake in the Monteverde mill in Ponta Porã (MS), and took yet another major step in consolidating its position in this segment in December of 2009, by acquiring MoemaPar, a group with five sugarcane mills located in the states of São Paulo and Minas Gerais (Moema, Itapagipe, Frutal, Ouroeste and Guariroba).

The eight mills have the capacity to process around 21 million tons p.a. Together, the mills generated 543,000 megawatts/hour in 2011, enough to supply a town of 300,000 residences. Such expansionist initiatives are aimed at strengthening Bunge Limited's position as a world leader in the sugar chain, and to satisfy its policy of sustainable development, both on a social and an environmental plane. This proposal has already been put into practice: in 2011, the company began generating electricity using bagasse and sugarcane straw, clean and renewable sources of energy. Part of this energy is consumed in the production of ethanol and sugar at their plants themselves, while surplus electricity is distributed to local municipalities.

8 mills have the capacity to process 21 million tons/year into sugar and etanol

Climate Variation

A series of climate variations led the company to suffer the effects of the crop failure of 2009 and 2010, caused by drought in areas where the business had planted and replanted areas and operating plants. The productivity of the sugarcane plantations fell in 2011, and the challenge then faced was how to optimize assets and achieve operational excellence, so as to overcome the impact of the drought and circumvent the problem by adapting to the opportunities available.

In 2011, the product mix between sugar and ethanol varied according to the market, and price was viewed as the key factor in the operation’s success. The Company also increased the operational efficiency of its units by investing in competencies, training and equipment.  

Bunge expanded its business by extending the planted areas at its units, and through the opening of the Pedro Afonso plant, its eighth producing sugar and bioenergy, and the company’s first greenfield plant, in Brazil.

Bunge anticipated the state of São Paulo’s agro-environmental protocol, which requires that by 2014, the practice of burning fields in preparation for planting should be phased out. The company finished the year with almost the whole of its crop mechanized, and with its labor force fully utilized.

For sugar and ethanol, there is already a global standard accepted and recognized by the markets, the Bonsucro. Bunge already has two of its plants certified by this standard, which establishes criteria for sustainability in the management of sugarcane crops, creating more reference on topics such as use of natural resources, conversion of vegetation and compliance with environmental laws, among others. The certification is applicable to 51% of total ethanol production and 49% of sugar production of Moema Plant and  to 53% total ethanol production and 47% of  total sugar production of Frutal Plant.The year was also marked by the signing of a partnership between Bunge and Solazyme Inc., an industrial biotech company that produces renewable oil and bioproducts from microalgae, which should result in a joint collaboration to produce oil and biomaterial on a large scale, not only for the production of biofuels, but also as a substitute for petroleum and vegetable oils in a wide range of products. 

The Pedro Afonso Plant

In July of 2011, Bunge inaugurated its Pedro Afonso plant in the interior of Tocantins state. A total of R$600 million was invested in this project, with its initial milling capacity running to 2.5 million tons of sugarcane p.a. The unit is located on a plot of land covering 94 hectares in a rural zone of the municipality of Pedro Afonso.  

The plant uses the most cutting-edge technology, its planting and harvesting is fully mechanized, and furthermore, it takes full advantage of its sugarcane bagasse to produce electric energy, in a process known as cogeneration. 

It will produce ethanol, sugar and highly efficient electric energy through the industrial processing of sugarcane. The plant’s productive process is divided up into two phases: in the first, production is 100% concentrated on ethanol, for the domestic market and exports; in the second phase, sugar and energy are also produced. The implementation of the second phase, projected for between 2012 and 2014, should double the plant’s productive capacity.  

Pedro Afonso marks the consolidation of the joint venture between Bunge and Itochu, one of Japan’s largest global trading companies. For this initiative, 80% of the financial resources have come from Bunge and 20% from the Japanese Company, Bunge’s partner too in the Santa Juliana plant, Minas Gerais state, since 2008.

Development for the region

The Pedro Afonso Project generated a large number of jobs with business sustainability. In the first phase, 1,400 direct jobs were created, 3,000 indirect and a further 1,700 people worked on the construction of the plant itself. An example of the company’s commitment to Brazil, the endeavor contributed to stimulating and accelerating economic growth in the state of Tocantins, as well as in the whole region, attracting too, other investors as a byproduct (for details, visit: www.fundacaobunge.org.br/en/projects/integrated-community). EC9

The plant will have capacity to produce 180 GWh of energy p.a. and, as from 2013, may contribute to the supply of electric energy to the state of Tocantins. More than US$20 million have been invested in the process of cogeneration, which involves the burning of the bagasse (production waste) to generate electricity. Part of this energy will be used internally to run the plant, meaning that the unit will be self-sufficient in its energy needs. The remainder may be used to supply the national electricity grid, with sufficient capacity to supply the needs of thousands of residences.EC1

Sustainability and respect for the environment

The unit carries out selective waste collection, and the waste products of the industrial process (vinasse or stillage and solid waste from the sugarcane cleaning process) are fully utilized in the fertirrigation (a technique of fertilizing using water from irrigation) of the sugarcane plantation. Of the whole planted area, 5,000 hectares are irrigated, including through the use of the largest irrigation pivot in the world, of more than 1,300 meters in length, to reach an area greater than 500 hectares.

The Bunge Foundation has also arrived in the region, through the implementation of its Integrated Community program in Pedro Afonso, and in the municipalities of Tupirama and Bom Jesus do Tocantins. The Foundation supports the development of sustainable projects in the region, focused mainly on community relations, on strengthening public administration and in supporting human and social development.

The First Greenfield

The planting of the sugarcane plantation began in July of 2007, with a nursery of seedlings covering an area of 237 hectares. Today, more than 24,000 hectares have been planted, and the projection for the end of 2012 is to reach 32,000 hectares planted with sugarcane in the region. Partnerships with research centers have led to the development of varieties of sugarcane that are specific to the region’s climate and soil. The construction of the Pedro Afonso plant began in January of 2008, and by July of 2010, it had already begun operating, albeit in an experimental mode. The plant only became fully operational in May of 2011. 

Process Excellence Workshop

To perfect Process Excellence was the goal of three workshops that were programmed to take place between 2011 and 2012, aimed at improving the corporate practices of the Sugar & Bioenergy business and to transform them into positive results. The programming contributed to enabling the businesses of Technology and Agricultural Control, Automotive Maintenance and CTT (Cutting, Transshipment and Transport) to align their practices, and so construct a matrix of priorities for the plants in 2012. 

Support for Research Projects for the Genetic Improvement of Sugarcane

Bunge invests in technology in order to guarantee the competitiveness of its Sugar & Bioenergy business in the international markets.  The year of 2011 marked the start of a new partnership between Bunge and Solazyme Inc., an industrial biotech company that produces renewable oil and bioproducts from microalgae. This should result in a collaboration to produce oil and biomaterial on a large scale, not only for the production of biofuels, but also as a substitute for petroleum and vegetable oils in a wide range of products. 

In 2011, the Company maintained its funding of four major sugarcane research projects run by the following institutions in Brazil: Canavialis, Instituto Agronômico de Campinas (IAC), Centro de Tecnologia Canavieira (CTC) and the Rede Interuniversitária para o Desenvolvimento do Setor Sucroalcooleiro (Ridesa). Some of these entities have been working for decades on the genetic improvement of sugarcane, and have developed some of the most popular varieties used commercially in Brazil. These institutions study genetic crossbreeding and develop new techniques for planting, pest control and many other initiatives. 

Ridesa (the Inter-university Network for the Development of the Sugar/Alcohol Sector) is composed of a number of federal universities, and provides continuity to the studies carried out by the former Programa Nacional de Melhoramento do Cana-de-Açúcar e do Álcool (National Program for the Improvement of Sugarcane and Alcohol).  This program produced the varieties that are identified with the letters RB, present in more than 50% of sugarcane crops today. In addition, the program was responsible for encouraging the production of Brazilian ethanol.

The CTC (Sugarcane Technology Center), which has been around for 40 years, invests in improving and in research on mechanized planting and harvesting, biological pest control, healthy seedlings, generation of synergies, among others. It is home to the world’s largest bank of sugarcane genotypes (the genetic composition of an individual).  

The IAC (Agricultural Institute of Campinas) meanwhile, founded in 1887 by Emperor Dom. Pedro II, has more than 600 research projects on the go in various agricultural sectors, especially sugarcane, coffee and oranges. Linked to the state of São Paulo’s Agriculture and Supply Department, it works with more than 17 varieties of sugarcane.  

CanaVialis, set up in 2003, concentrates on genetic improvement and today belongs to Monsanto.

In addition to funding research projects, Bunge also works on the development of these initiatives, carrying out tests on varieties on the Company’s own land, in order to identify the best kind of soil for each variety to thrive in.

Cogeneration at Ouroeste

In May of 2011, the Ouroeste plant joined the other units of the Sugar & Bioenergy business in the cogeneration of electric energy. The Ouroeste plant produces electric energy from sugarcane bagasse, which is mainly sold on to industries, commercial entities and companies.

Of the Company's eight plants, Moema (SP), Frutal (MG), Monteverde (MS) and Santa Juliana had already adopted the practice. The five units together cogenerated 237,000 megawatts-hour to the National Interligated System, in 2011. Ouroeste was responsible for 10% of this total, a share that is expected to reach 15% in 2012.

In addition to providing the plants that sell this excess energy with additional resources, cogeneration reinforces Bunge's commitment to the environment, in terms of providing a proper destination for the bagasse and in terms of using alternative sources of energy. The exploitation of bagasse is one of the strategies adopted by the Ministry of Mines and Energy to supply demand and reduce the electricity bills of Brazilians. The fact that the Ouroeste plant has implemented this practice shows that Bunge is doing its part.

The Ourinhos Transhipment Terminal

The first transshipment facility run by the Sugar & Bioenergy business was inaugurated in 2011, in Ourinhos (SP). Focused on providing logistical services to third parties, it offers transport, transshipment and storage facilities for sugar. Its infrastructure has the capacity to turnover up to a million tons of sugar p.a.

The location of the new transshipment system is ideal for the loading of a commodity, produced mainly in the western part of the state of São Paulo, and its transport to the port of Paranaguá, where Bunge already handles sugar through its own terminal, to then be shipped abroad.

This operation generates gains in terms of efficiency and safety. The trucks unload the cargo in the interior of the state of São Paulo and, from there it is transported to port, mainly by rail, thereby generating savings in the cost of freight.

2012 Outlook

  • To become the leading global player in this sector, fully integrated and flexible, and benefitting from Bunge’s experience and its assets. 
  • To optimize existing assets.
  • To achieve operational excellence, especially in the agricultural business area.
  • To develop global partnerships. 1.2
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Commitment to Brazil. Field to table.
Bunge Brasil's Sustainability Icons
Represent the Social, Environmental and Economic dimensions of the actions and projects of the company in the Country. Learn more about Bunge Brasil Sustainability Platform in
www.bunge.com.br/sustentabilidade.
The Sustainability
Platform is a global
effort to ensure that
business performance
is enhanced on four
main fronts
Sustainable Agriculture Bunge is committed to raise awareness and train farmers to produce in order to reduce environmental impacts and maximize the use of finite natural resources.
The Sustainability
Platform is a global
effort to ensure that
business performance
is enhanced on four
main fronts
Climate Change Climate Change can bring significant impacts to food production worldwide. Therefore, Bunge believes it is a key factor in sustainability analyzes.
The Sustainability
Platform is a global
effort to ensure that
business performance
is enhanced on four
main fronts
Healthy Diets Offering safe and beneficial products to health. Bunge works to identify customer needs and provide the best food ever in the market.
The Sustainability
Platform is a global
effort to ensure that
business performance
is enhanced on four
main fronts
Waste Reduction Development of mechanisms and processes for the reduction of waste in industrial processes and expansion of the rational use of water and other non-renewable resources in the management of operational efficiency.