Strategy and Competitive Advantages

STRATEGY

Biosev's strategy is to maximize the use of its assets in a profitable and sustainable manner to generate value for its shareholders. The three pillars of this strategy are:

Biosev has a set of operational and competitive assets. The challenge faced by its management is to capture productivity and efficiency gains in the use of these assets.

By using advanced agricultural, industrial and information technologies, Biosev seeks to attain the industry's best performance indicators by improving and systematizing processes.

To integrate the production chain and ensure reliable access to quality raw materials, Biosev works to build loyalty among its sugarcane suppliers to guarantee the supply needed to meet its current and future needs.

By using differentiated market intelligence supported by a market information platform with global reach, Biosev imparts greater flexibility to its mix of sugar and ethanol production to identify the most profitable markets and conditions and the best moment to sell its products.

With a diversified product portfolio, Biosev prioritizes higher-value products to maximize the profitability of its business.

Biosev is committed to reducing costs and expenses and to optimizing its working capital needs through disciplined and efficient management of its inventories and cash conversion cycle.

In its investments, Biosev prioritizes selectivity, which is consistent with the fact that it already has a platform of existing, operational and competitive assets. The priority remains on investments in planting, tilling and maintenance.

In this context, one of the Company's strategic objectives is to lengthen its debt maturity profile and reduce its financial leverage.

COMPETITIVE ADVANTAGES

Biosev has 11 Agroindustrial Units strategically located in Brazil's Southeast, Northeast and Midwest and organized into four clusters. Having sites located in various regions of the country allows Biosev to process sugarcane during all months of the year and helps to mitigate the risk of climate change inherent to agricultural activities.

Today, ten of the 11 units feature significant flexibility for concentrating production in either sugar or ethanol, and can produce higher-value products that enable the company to allocate production based on the most favorable opportunities in the market. Only the Giasa unit operates as a distillery.

Biosev also enjoys: (i) unparalleled storage capacity that can store approximately 754,000 metric tons of sugar and 829,000 cubic meters of ethanol, which corresponds to 30% and 52% of its production capacity, respectively, which allows it to manage the ideal moment for selling its products: (ii) flexibility in its sugar export operations, through the interest of around 50% that it holds in the Port Terminal (TEAG ) located in the Port of Santos with sugar storage capacity of 110,000 metric tons and inbound sugar shipping capacity of 12,000 metric tons per day; and (iii) access to a multimode logistics system that uses railroads and highways to support the efficient distribution of products.

Biosev is the world's second largest sugarcane processor, with annual sugarcane processing capacity of 36.4 million metric tons. Every crop year, the company has the capacity to generate 1,346 GWh of surplus power from biomass and to produce 2.5 million tons of sugar and 1.6 million cubic meters of ethanol.

Biosev enjoys the support of the Louis Dreyfus Group, which has over 160 years of experience in the global commodity markets, operations in 100 countries and a leading position in all markets.

Through this relationship, Biosev gains access to strategic information on global agricultural markets, which is critical to maximizing the profitability of its business. Biosev also has risk management processes that are aligned with those of its Controlling Shareholder. These processes have been perfected over the more than 160 years of tradition of the Louis Dreyfus Group in global commodity markets, and include efficient and comprehensive tools for evaluating, monitoring, controlling and managing all of the types of risks inherent to its activities.

With access to the information platform of the Louis Dreyfus Company, Biosev actively manages its production mix to take advantage of moments of increased volatility and to identify the best time to sell its products in the most profitable markets.

 

logo BSEV3
logo ITAG
Capctha