Ethanol Global Market

7/31/2019 Ethanol Global Market

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Pop> 150million

Country Area> 5 million

[Km 2 ]

Population

191 million (2008)

Area [km2]

8.5 million

GDP

Country Numbers

BRAZIL: ECONOMIC DATA

GDP PPP US$2.03 trillion

(2008)

GDP Real US$ 1.66 trillion

(2008)

Growth: 5.01% - 2008

Investments

18.6% of GDP 2008

US$45 billion FDI 2008

(Foreign Direct Investment)

1

GDP > 600billion USD

I nves tmen t Grade

Standard & Poors 2008

Moodys 2009

Commercial Superavit

US$25 billion 2008

Sources: World Bank, I BGE, Ip eadata, BC

GDP(PPP)Worldrank2008


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Brazil GDP

Growth

Brazil:Inflation19852008

(%)


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Netforeigndebt(million

US$)

InternationalReserves

(19712008)

(billionUS$)


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Povertyreduction:

19922007

(%)

BrazilsMiddleClass %oftotalpopulationIncreasedSocialMobility andExpansionoftheInternalMarket


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TradeBalance1999

2007

Maintradepartners

2008USA

12%2008

11%

Argentina

9%Others

53%

Germany

7%

Nigeria

4%

Japan

4%


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Mainexports

2008

In Se tember 2009 Mood s raised Brazils credit ratin to

Investmentgrade

Baa3(investmentgrade)citingthecountrysstrongeconomic

andfinancialresilience.

InApril2008,Standard&PoorsincreasedBrazils:

overallratingtoBBB (investmentgrade);

debt/foreigncurrencyratingtoBBB;

longtermdebtinnationalcurrencyratingBBB+;

Forecastforlongtermratings:stable


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Inshort

Brazils reducedvulnerability:

Domestic market

Povertyreduction

Fastgrowingmiddleclass

Exports

Grow,onaverage,by20%ayear.

Only14percentofGDP

Diversifiedproducts

Diversifiedpartners

Accumulatedforeign

reserves (US$

208

billion

in

2008)

Regulated banking system

No oil imports

The country was not deeply affected by the world economic crisis

Energysources


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100 86

RENEWABLE ENERGY: BRAZIL AND THE WORLD

%

0

20

40

60

80

14

4555

Brazil

RENEWABLE NON-RENEWABLE

World

Source: MME, 2006

Brazil: EnergyMatrix2008


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Hydroeletric

power

Brazilisoneoftheworld'sleadingproducerso y roe ec r cpower

Existinghydroelectricpower provides80%ofthenation'selectricity.

Waterresources

Brazilrichinwater.

12%oftheworldssurfacewaterresources

In2007,percapitawateravailabilityreached

43,027m3

per

year,

above

the

world

average

of

8,209m3percapitainthesameyear

Storedgroundwater:

lessthan1,000mdeep

withgoodqualityforhumanuses


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Oilself

sufficiency

Brazilbecameenergyindependentin2006

Testshaveconfirmedrecoverablereservesofbetween5bnand8bnbarrelsofoilandgas.

e

e

cou

oost

raz sovera

reserves

ymorethan60percent

Nuclearenergy

Three nuclearreactors:

AngraI hasbeeninoperationformorethan10years.

AngraII was

completed

in

2002

and

is

in

operation

AngraIII wascompletedin2008.

Thegovernmentalsoplanstobuild17morenuclearplantsbytheyear2020.


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Biodiesel

Feedstockscanbeavarietyofsunflower oil,soybean, .

Thefinishedproductwillbecurrentlyablendofgasoilwith2%biodieseland,after2011,5%biodiesel,both

usableinunmodifieddieselengines.

,planned

to

open.

Thesethreefactorieswerecapableofproducing45.6

millionoflitresperyear.

Ethanol: The Brazilian Experience


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20

Ethanol Production in Brazil (Billion liters)

10

15

02000 2001 2002 2003 2004 2005 2006 2007*

Ethanolproduction:

plants ethanolvs.sugar

In2008,therewere378ethanol plants:

252producingboth sugarand ethanol.

126dedicatedtoethanolproduction

15additional

plants

producing

exclusively

to

sugar

2008/09harvest:

44%forsugar

1%foralcoholicbeverages


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Ethanolproductivity(thousand

liters

per

hectare)

Ethanolandenergy

Renewablesourceofenergy

Lesscarbon

intensive

than

oil.

1unitoffossilfuelenergy=8.3energy


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Ethanoland

carbon

emissions

Reducesairpollution: cleaneremissions

Reducesgreenhouseemissionsby86to90%

Themostefficientbiofuelinemissionreduction.

Theadditionofethanolblendsinsteadofleadtogasolineloweredthetotalemissions.

emissions andimprovingfuelefficiency.

Ethanolproductionandlanduse

thereare355millionhaofarablelandinBrazil,of.

Sugarcaneisonlytaking2%ofarablelandavailable,

of

which

ethanol

production

represented

55%

in

2008(about1%oftotal)

thereisenoughagriculturallandavailabletoincrease

withoutendangeringsensibleecosystemsortaking

landdestinedforfoodcrops


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Ethanol

waterand

agrochemicals

Thereissufficient waterinBraziltosupplyallforeseeablelongtermwaterrequirementsfor

sugarcaneandethanolproduction

sugarcaneproductionthanincitric,corn,

coffeeandsoybeancropping.

EthanolandtheAmazon

99.7%ofthesugarcaneplantationslocatedatleast2,000kmawayfromtheAmazon

expansionduring

the

last

25

years

took

place

intheCenterSouthregion, farawayfromthe

, .

InSoPaulothatgrowthtookplaceinabandonedpasturelands


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Sugarcane

production

in

Brazil

CarIndustry2008 2009

Brazilbringstogetherthetenlargestcarassem ycompan es n ewor ns e ts

nationalterritory.

In2008,

in

terms

of

domestic

sales,

Brazil

ranked5thintheworld(2.82millionunits)

andranked6thcar roducerintheworld.

In2009,(JanuarytoMarch),Brazilranked5thcarproducerintheworld


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Factsabout

cars

in

Brazil

Therearenolongerlightvehiclesrunningonpuregasoline

In2006,Brazilachieved

morethan40%offuelconsumptionfromsugarcanebasedethanolforthelightvehiclefleet

Almost20%oftotalfuelconsumptionintheroadtransportsectorwhen

trucksandotherdieselpoweredvehiclesareconsidered

ByMarch2008,thefleetofflexcarsandlightcommercialvehicleshadreached5millionnewvehiclessold

10%ofBrazilsmotorvehiclefleet

15.6%of

all

light

vehicles

Productionofvehicles2008


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Flexiblefuel

vehicles

TherearenolongeranylightvehiclesinBrazil.

TheBraziliancarmanufacturingindustrydeveloped

flexiblefuel vehiclesthatcanrunonanyproportion

ofgasoline andhydrousethanol .

Introducedinthemarketin2003

pr

,t e

eet

o

ex

cars

an

g t

commercialvehicleshadreached 7,5millionvehicles = 23.4%oflightmotorvehicles


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Ethanolcar

manufacturing

(millions)

Sugarcane industry: The Brazilian Success Story

Why Brazilian Ethanol is a Reliable Option ?

Brazil has all the necessary conditions to significantly expand its sugarcane.

The regulatory framework established has provided the security of fuel supply; There are many available areas in regions traditionally dedicated to ethanol and

sugar production; Many groups, with extensive expertise, are ready to invest in new plants or inretrofit old ones; With a productivity of about 6500 to 7000 liters/ hectare one billion additional

.hectares of land that are available for agriculture; Large investments have been made on distribution, especially, on logistics.

Brazilian ethanol is solid and ready for long-term contracts.


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(perhectare)

Comparison of raw materials used forBioethanol

production

Relative Fuel Prices

20

25

os

5

10

15

$/100kmr

oda

Gasolina

0

jan-02

abr-0

2

jul-0

2

out-0

2

jan-03

abr-0

3

jul-0

3

out-0

3

jan-04

abr-0

4

jul-0

4

out-0

4

jan-

05

abr-0

5

jul-0

5

out-0

5

lcool HidratadoGNV

Source: ANP (nov/05)

Fuel Consumptions: Gasoline = 10 km/litro; Alcohol = 7,5 Km/litro; VNG = 13


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SUGAR CANE GROWING AREAS AROUND THE WORLD


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Ethanol Trade Flux

1

4

3

6 6

5

7

1 from Brazil to the Caribbean

2 from Caribbean to the United States

3 from Brazil to Europe

4 from Brazil to the United States

5 from Brazil to Asia (India, Korea andJapan)

6 from South Africa to Europe and Asia

7 from Thailand to Japan Source: F.O. LICHTS - 2005

Ethanol Global Market

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