Investors Presentation - Mar 2007 (Final)
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Transcript of Investors Presentation - Mar 2007 (Final)
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Investors Presentation Brazil, March 2007
Bunge Competitive Position in the Brazilian Agribusiness
Investors Presentation
March 2007
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Investors Presentation Brazil, March 2007
Presentation Structure
Brazilian Agriculture Overview
Bunge Overview
Agribusiness and Food Bunge Alimentos
Fertilizer Bunge Fertilizantes Fosfertil
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Investors Presentation Brazil, March 2007
Natural Resources: Available Land
Use of land in Brazil million of hectares
Rain Forest 345Breeding Pastures 222Protected Areas 55Annual Crops 47Permanent Crops 15Cities, towns, lakes, riversroads & swamps 20Cultivated Forests 5
Subtotal 707
Other uses 38Unexploited area stillUnexploited area stillavailable for agricultureavailable for agriculture 106106
Total 851Sources: CONAB, MAPA and EMBRAPA.
Cerrado Area
4126652
21
83
4
1313
100
%
AM PA
MT
ACRO
RR AP
MA
TO
BA
GO
MG
RS
PR
SC
MS
SP RJ
ES
PI
CE RN
PBPE
ALSE
Brazil has one of World largest areas to expand agriculture.
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Investors Presentation Brazil, March 2007
World resources
97% of World water: oceans or glaciers
3% is fresh water
Brazilian resources
Around 20% of fresh water reserves
According to the UN researches, in 2015, 1/3 of countries will have problems with water supply
Natural Resources: Water
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Investors Presentation Brazil, March 2007
Brazilian Agribusiness Overview
Brazil Position in the World Exports
# 1 Soybean complex
# 1 Beef, Chicken and leather goods
# 1 Alcohol
# 1 Tobacco
# 1 Coffee
# 1 Sugar Cane
# 1 Orange Juice
# 1 Cellulose 96 97 98 99 00 01 02 03 04 05 06
Source: Aliceweb MDIC, USDA, FAO.
Imports
Exports
Brazilian Agribusiness Trade Balance(US$ billion)
In Brazil, the agribusiness responds for: ~30% of countrys GDP ~80% of trade balance surplus ~40% of labor force
Trade Balance Surplus in 2006:US$ 43 billion
CAGR8.8%
CAGR(2.8%)
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Investors Presentation Brazil, March 2007
Business Environment
From 2004 to 2006 Grain production loss: weather conditions
and Asian rust Good situation of sugarcane coffee,
orange and cotton crops and meat production
Higher costs and lower prices of grains Higher costs of fertilizers BRL Appreciation
Decrease of grain profitability Increase of farmers indebtedness Lower fertilizer consumption and reduced
profitability
From 2007 to 2009
Impact Impact
Brazilian agriculture has passed through a restructuring period.Overall profitability tends to recover. Farmers indebtedness and future
profitability of Mato Grosso will be the key issues.
Better scenario for grains Vegetable Oils as bio-energy source More stable BRL Still good perspectives for sugarcane,
coffee, orange and cotton crops and meat production
Potential new government financing skills for agriculture
Grain producers with better profitability Recover of fertilizer consumption Increase of crushing plants usage
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Investors Presentation Brazil, March 2007
Bunge Overview
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Investors Presentation Brazil, March 2007
Bunge Ltd. Global Presence
Building the best food and agribusiness company of the world with excellent reach and geographical balance
Future growth for food# 1 in main
production regions
Leading importer of soy products
# 1 in imports of soybean
meal
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Investors Presentation Brazil, March 2007
More than 250 facilities (silos,
distribution centers and industrial
plant)
Bunge in Brazil
Brazilian Main Exporters(US$ billion)
2005 2004 05x041st Petrobrs 7.0 4.6 52%2nd CVRD 4.3 3.2 34%3rd Embraer 2.7 3.3 (18%)4th Bunge 2.1 2.7 (22%)5th Volkswagen 1.9 1.5 27%
In Brazil since 1905, Bunge is one of the most important agribusiness and food companies of the country.
In 2005, Bunge was the 2nd company with the best contribution for the Brazilian trade balance
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Investors Presentation Brazil, March 2007
Bunge FertilizantesBunge Alimentos
Largest Agribusiness exporter in Brazil
Latin American leader in soy and wheat milling
Brazilian leader in: Vegetable oils Shortenings Margarine Wheat flour Bakery pre-mixes
Largest fertilizers company in South America
Largest producer of: Phosphate fertilizers in South
America Single super-phosphate in the
world Nitrogen fertilizer in Brazil Feed phosphate in South
America and #4 in the world
Bunge in Brazil
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Investors Presentation Brazil, March 2007
Bunge in Brazil
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Investors Presentation Brazil, March 2007
Agribusiness and Foods
The Brazilian Marketand
Bunge Competitive Position
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Investors Presentation Brazil, March 2007
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Investors Presentation Brazil, March 2007
2006/2007 Grain Production Forecast
13,9
16,4
18,5
21,6
23,422,0
20,737,7
42,1
51,949,6 51,1
52,2
56,4
2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007
Source: IBGE
Planted area (ha million)
Grain production (million tons)
Soybean Projection Corn Projection
12,812,3
13,312,8
12,2
12,9 13,0
35,5
48,3
35,1
42,547,7
41,841,5
2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007
Although stable production in 2007 profitability is to raise and will motivate the increase of planted area for 2007 / 2008 crop
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Investors Presentation Brazil, March 2007
Soybean - World Production 2020
Source: IBGE / Agroconsult / ABIOVE
M
M
t
o
n
s
Years
Growth
46 %
33 %
118 %
2 %
2005-2020
64 %
248 %
167 %
42 %
1993-2005
83 87 82 85 85
52 56 59 66 8541 41 42 44
4842 41 4245
53
85 87
5111139
5245
60
0
50
100
150
200
250
300
350
2004/05 2005/06 2006/07 2007/08 2009/10 2014/15 2019/20
USA Brazil
Argentina Other
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Investors Presentation Brazil, March 2007
Consumption Drivers Soybean Meal
Source: United Nations - FAO , Dec 06
Annual World Meat Consumption (kg per capita)
80 81 81 82 82 8287
9398
20 21 21 21 22 2225 28
32
30 31 31 31 32 3235 38
41
0
20
40
60
80
100
120
1965 1975 1985 1995 1998 2005 2010 2015 2020
Developed Countries Developing Countries World
= 57 kg per capita
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Investors Presentation Brazil, March 2007
Overview of Bunge Alimentos
Largest Agribusiness exporter in Brazil - US$ 2,3 billion (2006)
Latin America leader in soy and wheat milling
Brazilian leader in: Vegetable oils Shortenings Margarine Wheat flour Bakery pre-mixes
5.307 employees
18.876 farmers
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Investors Presentation Brazil, March 2007
CottonCottonCornCornSoybeanSoybeanAnimal
NutritionAnimal
NutritionSugarSugarSunflowerSunflowerCanolaCanolaWheatWheat
Agribusiness
Santos Port
Rondonpolis Plant
Paranagua PortS.Francisco Sul Port
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Investors Presentation Brazil, March 2007
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RR
MG
ACRO
PA
AP
MS
MT
AM
BA
PI
MA
TO
GO
ES
RJSP
SC
PR
RS
ALSE
CE RN
PE
PB
Paranagu
Vitoria
Amazonas
River
Santos
Plants Crushing - Soybean # 8
Ports # 8
L.E.Magalhes
Urucui
Ilheus
Ponta Grossa
So Francisco do Sul
Rio Grande
Bunge Alimentos - Agribusiness - Footprint
n Silos # 128
Rondonopolis
Passo Fundo
Luziania
Dourados
nn
MS
Itacoatiara
n
n
n
n
n
n
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nn
n
So Luis
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Investors Presentation Brazil, March 2007
Food Products
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Investors Presentation Brazil, March 2007
Luzinia
L.E.Magalhes
SuapeRR
MG
AC
RO
PA
AP
MS
MT
AM
BA
PI
MA
TO
GO
ES
RJSP
SC
PR
RS
ALSE
CERN
PE
PB
Refineries
So Paulo (Jaguare)
Gaspar
Passo Fundo
Fluminense
Braslia
Marilu
Wheat Milling
Ponta Grossa
Recife
Santos
Joinville
Bunge Alimentos - Food Products - Foot Print
Rondonpolis
Refineries # 6
Plants of Margarine # 3
Plants of Mayonese # 1 Mills of Wheat # 7
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Investors Presentation Brazil, March 2007
Fertilizer
The Brazilian Marketand
Bunge Competitive Position
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Investors Presentation Brazil, March 2007
NPK
FERTILIZERS
Potassium Chloride(KCl)
Single Superphosphate(SSP)
Triple Superphosphate(TSP)
Diammonium Phosphate(DAP)
Monoammonium Phosphate(MAP)
Urea
Ammonium Nitrate
Ammonium Sulfate
Urea
Ammonium Nitrate
Ammonium Sulfate
Monoammonium Phosphate(MAP)
Current Bunge and Fosfertil activities
Nitric Acid
Ammonia
SulfuricAcid
PhosphoricAcid
Basic Raw Materials
Basic or intermediate Fertilizers
Final ProductIntermediateRaw Materials
Nitrogen
Phosphate
Potash
PhosphateRock
MineralPotassium
Natural GasOil
Nafta
S -Sulfur
MineralPotassium
Fertilizer Production Chain
P
N
K
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Investors Presentation Brazil, March 2007
Fosfertil, Copebrs, PCS
Bunge Integrated Business Model
Basic Raw Material Intermediate Raw Material Basic Fertilizer NPK Fertilizer
Level 3
Level 4
Bunge (in BR), Mosaic (in the USA), Agrium (in the USA)
Mosaic (in Brazil), Yara (in Brazil)
Chemical Process
NPK Blenders
BlendingMines
Level 2
Level 1
Arax MineSulfuric Acid Arax Plant SSP Arax Plant
CascavelBlending Unit
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Investors Presentation Brazil, March 2007
Production Location Creates Competitive Advantage
~ $40/t transportation cost advantage for phosphate rock
~106 MillionHectares of Available
Land
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Investors Presentation Brazil, March 2007
World Fertilizer Market Evolution
World Fertilizer Consumption(million tons of nutrients)
Source: IFA, ANDA.
In the past 15 years, Brazilian fertilizer market presented the highest growth rate in the world.
In 2006 it was recovered partially of 2005 decrease (-13%), and the Brazilian market should keep the growing rate higher than 5% / year.
1990 1995 2000 2005CAGR Total
China 27.1 33.5 34.4 43.4 3% 60%USA 18.4 20.1 18.7 20.1 1% 9%India 12.5 13.9 16.7 18.4 3% 47%Brazil 3.2 4.3 6.6 10.5 8% 228%France 5.7 4.9 4.1 3.9 -2% -32%
World 137.4 129.4 136.9 155.1 1% 13%
2005 x 1990
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Investors Presentation Brazil, March 2007
Brazilian Consumption(2005)
Supply The Role of Imports
Note: Phosphate Production: includes internal production with imported raw material.
The 2005 imports supply of around 68% of Brazilian demand for fertilizer might not change significantly in 2006. Brazilian fertilizer market is a price
taker (based on international prices)
90%
10%
44%
65%
56%
35%
Nitrogen Phosphate PotashSource: ANDA and SIACESP.
2.2 million tof N
2.9 million tof P2O5
3.4 million tof K2O
Production
Imports
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Investors Presentation Brazil, March 2007
Overview of Bunge Fertilizantes# 1 Fertilizer retailer company in Brazil and in South America
# 1 Feed phosphate producer in the South America
# 2 Phosphate rock producer in Brazil
# 3 Phosphate fertilizer producer in Brazil
Employees around 3,000
More than 300 agronomists
Four strong brands, top of mind
Differentiated sales approach by market segment
National coverage of distribution
Truck and ocean Freight synergies with agribusiness
Swap transactions fertilizer and grains
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Investors Presentation Brazil, March 2007
Arax
Cajati
Rio Grande (2)
Uberaba (2)
Guar
Cubato (2)
Macei
Candeias
Luis EduardoMagalhes
SerraManhuau
Varginha
Congonhal
Canoas
Camb
Ponta Grossa
Curitiba
Paranagu
Barcarena
So Luis
Rondonpolis (3)
Patos de Minas
Limeira
Ja
Anpolis
Bom Jesus
Imbituba (2)Cascavel
Alto Araguaia
Catalo
Footprint of Bunge Fertilizantes
Phosphate Rock (2)
Operational Facilities
Cerrado PotentialAgricultural Area
Phosphoric Acid (1)
SSP (5)
Sulfuric Acid (3)
NPK Blending (34)
Total Number of Sites: 36
Feed Phosphates (4)
Warehouse along Ferronorte (1)
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Investors Presentation Brazil, March 2007
Overview of Fosfertil# 1 Phosphate rock producer in South America
# 1 Phosphate fertilizer producer in South America
# 1 Nitrogen fertilizer producer in Brazil
Employees around 2,600
Port terminal strategically located in Santos
Industrial plant strategically located in the central region of Brazil
Bunge owns 41% of Fosfertil Bunge
Fertifos
48%52%
56%12%
Fosfertil
Other
Other
32%
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Investors Presentation Brazil, March 2007
Cerrado PotentialAgricultural Area
Footprint of Fosfertil
Operational Facilities
Phosphate Rock
Patos de Minas
Catalo
Phosphate RockPipe-Line
TapiraAmmonia / Ammonium Nitrate
Ultrafertil Port TerminalSantos
SSP
TSP
Phosphoric Acid
Sulfuric Acid
Cubato / Piaaguera
Uberaba
Ammonia / Urea
Araucria
MAP / DAP