Meet our business segments

Bunge's three areas of activity in Brazil are Agribusiness, Foods & Ingredients and Sugar & Bioenergy. There was no significant alteration in the organization's profile during the reporting period.

G4-13

Agribusiness

With eight grain crushing facilities, five port terminals and more than 60 elevators located nationwide, Bunge is the leader in the purchase, processing and commercialization of oilseeds such as soy, corn and cottonseed. In 2015, more than 8,500 partners growers were part of our supply chain.

As a result of this partnership, the company buyes more than 23 million metric tons of grain per year, including soy, corn and cottonseed. Part of this volume is processed for the production of meals and crude vegetable oil for customers in a number of segments, such as animal feed and food service, as well as the biofuel industry. The other part is exported to customers in Asia and Europe.

All the company's origination is in accordance with the public commitments it has assumed related to combating deforestation and promoting best social and environmental practices in agriculture.

In 2015, the Bunge Limited Global Sustainability area published the company's Global Non Deforestation Policy. This policy applies to company operations worldwide and to all the commodities it commercializes and processes. The objective of the initiative is to eliminate deforestation from our agricultural supply chains around the world, employing proven methodologies that avoid carbon emissions and protect biodiversity. More information on this policy is available in Policies and Risk Management.

The company also applies other policies, particularly worthy of note being the Sustainability Policy, Supplier Relations Policy, as well as the Biodiversity and Land Use and Palm Oil Sourcing policies.

School of Excellence

There is a simple explanation for the high professionalism of our commercial team. Everyone working with grain origination takes a training program called Business School, which is a model for the entire company. This face-to-face program is conducted in modules, ensuring these professionals gain in-depth knowledge of their function and the opportunity to exchange experiences with colleagues. In 2015, the fifth edition of the program was attended by 330 employees from seven locations in the country.

The program curriculum includes subjects such as market structure, current and future market, commercial planning, negotiation and the agribusiness value chain.

Another program differential is the fact that the instructors are Bunge employees who are experts in each of the subjects and fully prepared to be internal multipliers.

In addition to providing numerous options to commercialize products, Bunge has enormous logistics capacity, efficiently covering diverse regions in Brazil and overseas. This involves different transportation modalities connecting farms, elevators, transshipment stations, plants and ports by road, rail and waterway. Logistics is key for Bunge, because the company is the largest Brazilian agribusiness exporter and the third largest exporter in the country.

New elevator in Piauí

Focused on expanding in strategic production regions, in 2015 Bunge inaugurated its Santa Filomena silo in the state of Piauí, with a storage capacity of 32,000 metric tons of soy. In addition to expanding storage capacity in the state - the company already has four elevators in the region and a soy processing unit in the city of Uruçuí -, the investment enhances product export logistics and forges closer relations between Bunge and local producers. With this venture, Bunge generated dozens of direct and indirect jobs in the region.

 

The numbers for our operations in 2015 are impressive, supported by the company strategy of enhancing the efficiency of its units and incorporating the use of rail and waterway transportation as a means of diversifying the Brazilian logistics matrix, still heavily reliant on road transportation.

During the year almost 30,000 trucks made 602,000 trips in Brazil. The company shipped more than 8.7 million metric tons of product by train in more than 134,000 railcars. Also important was transportation by waterway, with some 58 barge convoys transporting 2.3 million metric tons of product. Our grain filled approximately 673 ships, taking Brazilian products to diverse countries worldwide.

We optimized the operation of the Miritituba-Barcarena port complex, inaugurated in 2014. This is a key route for transporting grain produced in Brazil's Midwest region to the Fronteira Norte Terminal (Terfron), located in the municipality of Barcarena in Pará. An important portion of the grain produced in the Midwest is now transported via the Tapajós-Amazonas waterway instead of through ports in the South and Southeast of the country as used to be the case. Impact assessments on the zones of influence are being carried out in partnership with the NGO TNC (The Nature Conservancy) in a five-year project initiated in 2013. The partnership also encompasses enhancing operations on the properties producing grain for the complex, making them more efficient in environmental terms (see the chapter Sustainable Agriculture).

The new port complex venture generated social, economic and environmental gains for the region, driving prosperity and development for the North of the country, while alleviating the congested logistics system in the South and Southeast regions, which has been operating above capacity for a long time. In addition to being one of the most modern port terminals in Brazil, Terfron offers a more efficient and sustainable alternative since it substantially reduces the distances covered by soy and corn exports from the Central Northern region of Mato Grosso to overseas consumer markets.

Bunge also operates through the ports of Rio Grande, São Francisco do Sul, Paranaguá, Santos, Vitória, Salvador, São Luís and Itacoatiara, which together account for 96.5% of Brazil's soy, corn, meal and soy oil exports.

With the biofuel Social Seal, more than 5,800 small holders families were part of the Bunge value chain in 2015.

Bunge operates a biodiesel plant in the municipality of Nova Mutum in Mato Grosso state. The plant is equipped with state-of-the art technology and is fully automated. This ensures that the product itself, an alternative fuel that helps reduce emissions, is sustainable. It also promotes the inclusion of family agricultural producers in the production chain through the purchase of the raw material they produce. The unit has been certified with the Social Fuel Seal (Selo Combustível Social) by Brazil's Agricultural Development Ministry, ensuring more favorable commercialization because the seal enables access to biodiesel auctions in the Brazilian market. This also drives integration and the dissemination of good agricultural practices among smallholders.

Adding value in the soybean chain is an important factor in the biodiesel market, in which international players such as Argentina and China compete directly with Brazil. The country has lost competitiveness in exports of higher added value products and in recent years has been exporting more and more grain and fewer processed products such as oil and meal. For Bunge, besides the value addition, biodiesel is important because it increases the company's participation in the chain, where it is active in crushing, producing meal and oil, as well as exportation.

G4-13

Bunge was the first company in Brazil to receive Biomass Biofuel Sustainability Voluntary Scheme (2BSvs) certification for the purchase, storage and commercialization of soy. This was acquired after an independent audit demonstrated the company's compliance with the sustainability criteria established by the European Directive 2009/28/EC.

Foods & Ingredients

Bunge's Foods & Ingredients business produces oils, margarines, mayonnaises, olive oils, wheat flours, sauces and tomato products, as well as food service solutions. This portfolio positions Bunge as one of the largest foods and ingredients companies in the country.

In 2015, the company maintained its strategy of growing in the Wheat, Consumer and Ingredients segments. It consolidated its different distribution systems and sales channels, boosting market presence. We maintained our long-standing leadership in the soy oil market, an achievement crowned by recognition of the Primor brand as Top of Mind in the Northeast of Brazil for the fifth year running.

In 2015, the company maintained its strategy of growing in the Wheat, Consumer and Ingredients segments. It consolidated its different distribution systems and sales channels, boosting market presence. We maintained our long-standing leadership in the soy oil market, an achievement crowned by recognition of the Primor brand as Top of Mind in the Northeast of Brazil for the fifth year running.

Bunge is the largest producer in the country in the wheat flour and premix segment for the industrial, domestic and bakery markets, milling over 1.5 million metric tons a year.

G4-13

The company has eight wheat mills strategically located from the north to the south of Brazil: Suape (Pernambuco), Brasilia (Distrito Federal), Rio de Janeiro (Rio de Janeiro), Santa Luzia (Minas Gerais), Tatuí (São Paulo), Santos (São Paulo) - 2 mills - and Ponta Grossa (Paraná).

The company's growth strategy and the consolidation of its leadership began with the acquisition of Moinho Vera Cruz, a mill in Minas Gerais, in 2013. Bunge invested in expanding and modernizing the unit, which is now fully integrated into the operation. In 2014, we announced the construction of the new Moinho Fluminense mill, which will be one of the most modern in Latin America and which is expected to come into operation in late 2016. In 2015, we reinforced our leadership by acquiring the Moinho Pacífico in Santos (São Paulo), focused on ongoing expansion in the Brazilian wheat market.

In constant evolution, the company's Research & Development area is distinguished by its packaging weight reduction projects, two of which were implemented in 2015. Our margarine packages now use, on average, 3.8% less raw material (plastic); we also achieved an approximate reduction of 6% in the cardboard boxes for our 900 ml soybean oil (results achieved through standardization of packaging). Aligned with Brazil's national solid waste policy, this work is aimed at reducing the impacts caused by post-consumer packaging.

In 2015, there were 13 cases of non compliance with standards or regulations related to product labeling, resulting in warnings for the company.

G4-PR4

Sugar & Bioenergy

Bunge entered the global sugar market in 2006, initially just commercializing the product. Today it is one of the largest sugarcane processors in Brazil. The operation involves eight mills, located in the states of São Paulo, Minas Gerais, Tocantins and Mato Grosso do Sul, with a total crushing capacity of approximately 21 million metric tons of cane per year, used to produce sugar, ethanol and bioenergy.

The energy produced in our mills is clean and is 100% renewable, since it is derived from burning sugarcane bagasse. Six of the company's eight mills are qualified to export energy to Brazil's national energy grid (SIN) and to commercialize the electricity produced. Moreover, three of the Bunge mills have Bonsucro certification. This international seal enables part of the ethanol and sugar produced by the company to be exported to restricted markets, such as Europe or to be used as raw material for sustainable supply chains producing from chemicals to green plastic. In addition to the commercial benefit, this certification validates the management of our mills regarding best sustainability practices, given that Bonsucro establishes social and environmental principles and criteria that may be applied to cane growing worldwide (further information in Sustainable Agriculture).

In 2015, the Bunge mills produced equivalent bioenergy to supply 100% of the company's electricity needs in the country.

Since 2009, Bunge has been a signatory to Brazil's National Commitment to Enhance Working Conditions in Sugarcane, having the "Committed Company" seal awarded by the government. This agreement involves employers and workers in the industry and is aimed at standardizing best labor practices, going beyond the rights guaranteed under current legislation.

It is Bunge's understanding that its responsibility extends to all the links in the sugar-energy production chain. For this reason, the company's voluntary commitment to enhance working conditions was extended to our business partners, who are also expected to ensure occupational health and safety in the field. The company aims to be considered a global reference as a result of this initiative. We want to raise standards in the sugar and bioenergy market, prioritizing awareness, training, recognition of best practices and the application of sanctions in the event of non-compliance with the commitment.

In operational terms, the company's use of industrial residues, such as filter cake, vinasse and boiler ashes has been worthy of note since this reduces the need to acquire mineral fertilizers for agricultural areas. Bunge has also promoted the application of precision agriculture and conservation techniques such as direct seeding, the maintenance of firebreaks and river banks.

Another major challenge was ensuring the implementation of Brazil's new Forestry Code among our partners and suppliers, together with the regularization of CAR (Cadastro Ambiental Rural) environmental registration in the properties which supply the company. Approximately 60% of the Sugar & Bioenergy business's cultivated areas have been registered and a further 31% are currently undergoing registration. The remaining areas (9%) are awaiting approval of a state regularization program to carry out the registration. (database: december/2015)

The registration process is reinforced by other company initiatives to drive implementation of the forestry code, such as technical talks for partners and agricultural producers and communication materials such as explanatory folders that are distributed to rural communities.

Mills awarded Green Energy seal

A highlight for the Sugar & Bioenergy business in 2015 was the award of the Green Energy seal to the Pedro Afonso (Tocantins), Monteverde (Mato Grosso do South) and Moema (São Paulo) mills. This certifies that the electricity generated by these units is compliant with energy efficiency criteria as well as with best agricultural and industrial sustainability practices. The seal was instituted by UNICA (União da Indústria de Cana-de-Açúcar), the São Paulo state government and the energy commercialization chamber CCEE (Câmara de Comercialização de Energia Elétrica) attesting that the energy produced by seal holders is generated from sugarcane bagasse and straw and is clean and renewable.

 

Furthermore, the Sugar & Bioenergy business is committed to reclaiming permanent preservation areas adjacent to the Bunge mills. This commitment covers a total of 1,181 hectares, of which 786 have already been fully restored. The Moema mill, located in the São Paulo municipality of Orindiúva, has a native seedling nursery with 120 species from the Atlantic Rainforest and Cerrado biomes, with a production capacity of 700,000 units. Certified by the Brazilian Ministry of Agriculture, the nursery is one of the ten largest in the state of São Paulo and is a reference in the donation of seedlings, training, provision of assistance and the diffusion of best reforestation practices.

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