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Business Investment Opportunities on Agribusiness.

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Presentation on theme: "Business Investment Opportunities on Agribusiness."— Presentation transcript:

1 Business Investment Opportunities on Agribusiness

2 Brazilian Economy Highlights 5 h largest population in the world: 190 million inhabitants; Largest consumer market in Latin America; One of the countries least affected by international slowdown; PPP GDP in 2009: $2.013 trillion; Estimated 7.5% GDP growth in 2010; Estimated US$ 30 billion of FDI in 2010; Estimated US$ 185 billion of exports in 2010; Estimated US$ 172 billion of imports in 2010; Brazil has become an international net creditor; Since 2002, more than 25 million people jumped from lower classes to middle class; 43% reduction in poverty between 2003 and 2008; 14 million new employments created since 2003; Lowest unemployment rate in history: 6.8%; Inflation under control; High level of international reserves: US$ 257 billion in July 2010; R$ 1.5 trillion in credit in 1st semester of 2010 and still representing only 45% of GDP; Host of 2014 FIFA World Cup and 2016 Olympic Games.

3 Brazilian Agribusiness Highlights World largest producer of sugar, coffee and orange juice; World second largest producer of soybean, beef, tobacco and ethanol; Largest exporter of sugar, coffee, orange juice, ethanol, beef and broiler; US$ 170 billion of agricultural production (gross value 2008); US$ 64,8 billion of exports of agricultural products in 2009; Average 5% growth in grains production since % growth in beef production between 1994 and 2009; 216% growth in broiler production between 1994 and 2009; Leader in the development and production of sugarcane ethanol; Growing population and constant need for increase in food production; Leadership in tropical technology; Abundance of natural resources (land, water, solar energy); Farming vocation combined with business entrepreneurship;

4 Featured Projects Project brief description: A new storage and trading company focused on Center- North of Brazil. Region Responsible for half of Brazilian soybean. Sector:Agribusiness Type of investment: Private Estimated value of investment (US$): US$ 100 – US$ 200 millions (5 years period) Terms: Start years project, equity capital needed Other relevant information: Project supported by local soybean growers. High level business plan already done. Detail available in the business plan. Grain Storage and Training By APROSOJA Brazilian Soybean Growers Association

5 Featured Projects Project brief description: In the second stage, CCGL project is the expansion of the production capacity in milk powder by installing a new spray drying system (capacity of 1 million liters per day). This project also includes portfolio expansion by installing a new cheese plant with the capacity of 1 million liters per day, where it will be produced semi hard cheeses. Type of investmentPrivate Estimated value of investment (US$): R$ ,00 / Usd ,00 Expansion of Dairy Plant By COOPERATIVA CENTRAL GAUCHA LTDA

6 Featured Projects Project brief description: Description: Consists in an Expansion Project of activity existing in structures used in food production: 1) Considering the great potential of producing high quality of raw material, produced by members of COTRIJUI, aiming to widen participation in the internal market that presents great opportunities, and expanding in external markets, through association with international businesspeople who can participate as investors and / or distributors in their countries; 2) Opportunity to use of substandard materials or wastes for food, for animal feed manufacturing industry in the group, generating added value and economic results; 3) The project's main objective is to focus investment in order to increase the industrialization of oats for human consumption. Sector:Food Type of investment:Private Estimated value of investment (US$):US$ (nine million and eight hundred eighty thousand U.S. dollars) Terms: Forecast for early deployment: March of 2011; Forecast for completion of installation: September of 2011; Considering the existing structure and process, adding to the implementation of the expansion project and resulting total volumes, with an estimated average annual revenue of U.S. $ 17,800,000 (seventeen million eight hundred thousand dollars) and percentage of liquid result projected, it pays to invest in 4 (four) years after commencement of activities Other relevant information: a) It is noteworthy that the region has qualified manpower, nurture access to dozens of direct jobs and growth in rural activities; b) COTRIJUI provides, at the local, rail access for easy transport to the Port of Rio Grande / RS, where it is also a partner in the ferry terminal, with special tariffs. Expansion structure for food production (Grains) By COTRIJUI – Cooperative Agricultural & Industrial

7 Featured Projects Project brief description: Description: Expansion Project consists of structures that have been used to slaughter animals, to design physical spaces and special equipment for slaughtering and the industrialization of Beef Cattle (Early/ Tracked), to meet the demands in domestic and foreign markets. 1) Considering: The provision of high quality raw material, produced by members of the Cooperative, with monitoring and technical assistance from the professionals also COTRIJUI; 2) The need to supply the supermarket chain's own COTRIJUI, and other potential customers in the domestic market; 3) Attendance of external market demands and to meet requests from customers who already import other products from the Cooperative. Sector:Food Type of investment:Private Estimated value of investment (US$): US$ (twenty two millions of dollars). Terms: Forecast for early deployment: February 2011; Forecast for completion of installations: July 2011; Considering an average annual turnover of U.S. $ 87,488,000 and percentage of projected net income, the investment pays for itself in 6 (years) and 3 (three) months after commencement of activities Other relevant information: a) It is noteworthy that the region has qualified manpower, nurture access to hundreds of direct jobs and as many indirect jobs; b) COTRIJUI provides logistics for easy transport to the Port of Rio Grande / RS, where it is also a partner in the ferry terminal, with special tariffs Expansion structure for food production (Meat) By COTRIJUI – Cooperative Agricultural & Industrial

8 Featured Projects Project brief description It is a Private Placement which is oriented to raise capital to invest in farmland acquisition. Creation of a prime farmland portfolio that will offer to investor returns coming from leasing and real estate appreciation, plus the value creation coming from the land transformation through farming operation (soybeans, corn, cotton). SectorReal Estate ( Farmland ) Type of investmentPrivate Estimated value of investment (US$) U$ ,00 Form of disbursement of payments (if public project) The respective disbursements can be made after the legal constitution of the company, according to the pre-agreed business plan of the company refering to land acquisition timeline. Also, these disbursements will be done based on the bylaws of the company, which should be built with the investor. Terms: We expect to conclude the project (raise the capital for investment) until the end of 2010, later in first half of The payments will be made within this period, but the specific dates will be set with investor. Other relevant information: The project of SLC Land Co is an opportunity to be partner of one of the best farmland operators in Brazil (SLC Agrícola), which is listed at Novo Mercado segment of Bovespa. All the advantages of SLC Agrícola, in terms of key personnel, production know-how, land acquisition track-record, machinery, and others, will be transferred to SLC Land Co at no cost. The idea is to have a real estate company, ready to collect incomes from leasing and sales of its land portfolio, upon we have achieved the proposed target returns for each asset. Farmland Acquisition By SLC Agrícola SA

9 Featured Projects Project brief description:Funding (equity or debt) to develop Tiba’s existing lands. Sector:Agribusiness: grains and oilseeds. Type of investment:Private Estimated value of investment (US$): From US$ 30 million (working capital) to US$ 100 million (funding to develop Tiba’s land). Terms: Funding (equity): Amount: US$ 100 million; Term: Tiba’s potential IPO (4 years expected); Starting date: flexible, ideally by Q Funding (Debt – Land development): Amount: US$ US$ 60+ million; Term: 10 years Working Capital – Crop Financing: Amount: US$ million; Term: 3 years; Starting date: 2H 2011; Starting date: flexible, ideally by Q Other relevant information: Tiba – the largest agricultural land owner in Brazilian cerrado (savannah- type of vegetation) – currently owns 212,000 hectares of agricultural land for row crop production in Brazil. 114,000 hectares are arable land out of which Tiba is already producing in about 30%. This project is to (i) develop the remaining 70% in a faster manner making Tiba a mature company for IPO in a 4-year timeframe and (ii) finance crops in the current productive area (working capital). Development of Tiba’s lands By Tiba Agro

10 Featured Projects Project brief description: Consolidation of Brazil’s Grains Farmers, creating Brazil’s largest grains production company. Sector:Agribusiness: grains and oilseeds. Type of investment:Private Estimated value of investment (US$):US$ 130 million Form of disbursement: Acquisition of smaller players to benefit from bargaining power, synergies and scale gains, subject to the completion of the transactions. Terms:Subject to the conclusion of a due diligence, acquisitions could start before the end of Other relevant information: Brazil’s grains and oilseeds sector is ripe for consolidation as it already happened in the sugar and ethanol sector. Consolidation of Brazil’s Grains Farmers By Tiba Agro

11 Featured Projects Project brief description: Development of 30,000 to 50,000 hectares of timber farms in Piauí for future iron ore mine and domestic market on already acquired farmland. Sector:Timber: Eucalyptus planted forests Type of investment:Private Estimated value of investment (US$): US$ 90 million to US$ 150 million (US$ 2,900 per ha) Form of disbursement: US$ 900 per ha in the first year to prepare the land; US$ 1,500 per ha in the second year to plant the trees and US$ 500 per ha in the third year to account for future costs until the harvest. Terms:Estimated total holding period of 8 years to account for the soil preparation plus 7 years of growth for the trees Other relevant information: There is a shortage of wood sources around the world as natural forests are becoming more and more protected. Brazil is the most competitive country in the world as trees grow faster compared to other places. Development of Timber Farms By Tiba Agro

12 Featured Projects Project brief description: 1) To build and consolidate an industry in Soybean Crush Mineiros-GO, by COMIVA, together with their membership; 2) Number of membership: 1180 (one thousand one hundred eighty); 3) Capacity: (one thousand) tons a day, 330 days a year, during 24 (twenty four) hours; 4) Area planted to supply the industry with raw: (one hundred and one thousand). 5) Generation direct jobs: 130 (one hundred thirty); 6) Increase turnover/ income: U$ 180 (one hundred and eighty million) dollars. Sector:Agriculture/ Soybeans; Type of investment: Private Estimated value of investment (US$): 1) Investment at the industry/ machinery and equipment: $ 65 (sixty five) million dollars; 2) Investment in expansion of storage: $ 24 (twenty four) million dollars; 3) Necessity of circuit capital: $ 24 (twenty four)) million dollars; 4) Funding of Agricultural (originate): $ 35 (thirty five)) million dollars; 5) TOTAL: US$ 148 (one hundred forty-eight) million dollars. Form of disbursement of payments (if public project): 1) Construction period: duration of 18 (eighteen) to 24 (twenty four) months. 2) Total payments for the period / month: $ 5 (five) million dollars in infrastructure (approximately); 3) Terms of Disbursement: invoice of contractors / contracts for execution of work; Project for Soybeam Industry in Goiás By COMIVA

13 Featured Projects Company description: BR Woods structures innovative timberland projects in Brazil. The partners have invested US$50MM: 1) Brazil’s first corporate partnership (with a leading pulp and paper company) and a plantation of eucalyptus in MG. BR Woods is currently raising a fund with Caixa Economica Federal, Brazil’s largest PE manager with R$50Bn AUM. Sector:Forestry Type of investment:Private – FIP Invesment Estimated value of investment (US$): Target: US$ 600 million Terms:Q FIP Caixa BR Woods Florestal By BR Woods

14 Featured Projects Company description: Founded in 1999, Claritas currently manages US$ 1.7 billion in alternative investments in Brazil. With a dedicated team overseeing forestry investments, Claritas manages two timber funds aimed at providing investors with attractive risk-adjusted long term returns through exposure in rural land and plantation forests. Claritas Current features two investment options: 1 fund (Florestas do Brasil II) and one direct investment project (Eco Brasil Florestas). Sector:Forestry Type of investment:Private Estimated value of investment (US$): Florestas do Brasil II fund: target US$ 300 million Eco Brasil Florestas: A private placement of approximately US$ 100 million. Terms: Florestas do Brasil II fund: 2nd half of 2011 Eco Brasil Florestas: Private equity investment with a estimated term of 7 years.IRR expectations between 20%-30%. In downside scenario, risk/returns profile of a timber investment (low risk with real IRRs of around 12%) Forestry Funds and Projects By Claritas

15 Featured Projects Company description: Founded in1999,DFJ FIR Capital is a Brazilian venture capital firm that invests in nascent, emerging or growing companies that demonstrate tremendous growth potential. In 2007 we became the Brazilian affiliate of Draper Fisher Jurvetson, one of the world’s leading venture capital firms. Sector:Agroindustry Type of investment:Private Estimated value of investment (US$): US$10 MM Terms:One investment round of long-term growth capital. Other relevant information: Itacitrusis thelargest fresh lime exporter in Brazil and is currently introducing other fresh and minimally processed tropical fruits into its business line. Itacitrus Agroindustrial e Exportadora S.A. By DFJ FIR Capital

16 Featured Projects Sector: Agribusiness (fruit supply chain) Type of investment:Fund FIP Estimated value of investment (US$): Target: around US$ 150 million Terms:October 2011 SPE FRUTES By Confrapar

17 Featured Projects Sector:Timber and farmland Type of investment:Funds Estimated value of investment (US$): 1)Vision Brazil Timber (foresting): target US$ 350 million 2)ViVa (agribusiniess): target US$ 300 million Terms:Q Timber and Farmland Funds By Vision Brazil

18 Featured Projects Company description: BRZ Investimentos is a leading independent asset manager in Brazil, with over US$2.5bn in AUM. The firm was founded at GP Investments in 1998, and spun out in Our private equity team targets active minority positions in high growth companies with strong cash flows in the infrastructure and agribusiness sectors. Sector:Agribusiness Type of investment:Private Equity Estimated value of investment (US$):Brasil Agronegócio FIP: target US$ 488 million Terms:Vintage year 2010 Agribusiness Fund By BRZ Investimentos


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