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Advanced Biofuels Investments at
Bunge
April 20, 2011
Ben Pearcy
Managing Director,
Sugar & Bioenergy
A Leading Global Agribusiness & Food Company
Key Facts
Average Net Operating Assets
Revenue: $46 Billion
Agribusiness
Sugar & Bioenergy
Food & Ingredients
Fertilizer
Other
Employees: ~32,000
Facilities: ~400
Countries of Operations: 30+
Agribusiness
• A global leader in
oilseed processing
• A global leader in grain
and oilseed marketing
Sugar & Bioenergy
Food & Ingredients
• 21 mmt sugarcane
milling capacity
producing sugar,
ethanol and electricity
• Leading producer of
oils, margarines &
industrial fats in the
Americas and Europe
• Leader in global trade
and distribution
• Growing oils position
in Asia
Fertilizer
• Fertilizer operations in
Brazil, Argentina and the
U.S.
• Joint venture with OCP
in Morocco
• Leading corn and wheat
miller in the Americas
1
What We Do — Fertilizer, Feed, Food & Fuel
Bunge markets fertilizers and processes soybeans, rapeseed, canola, sunflower seeds, corn,
wheat, sugarcane and other agricultural commodities to make products and ingredients with
numerous applications.
• Fertilizers that help farmers produce
quality crops
• Feed for animals
• Cooking oils, margarines and
shortenings
• Sugar and ethanol from sugarcane
• Milled corn, wheat and rice for
cereal, snacks, baked goods, beer
and other foods
• Oils used in solvents, inks, lubricants,
hydraulic fluid, foam and other
applications
2
Building a Sugar & Bioenergy Business
Acquired Moema:
 5 mills with 13.7 mmt of
capacity
 Expands Bunge total
capacity to ~20 mmt
 Acquired 60% stake in
Monteverde mill
 Acquired Tate & Lyle sugar trading
& merchandizing business
 Acquired Santa Juliana
mill (1st asset)
 Started development of
Pedro Afonso mill
Leading Brazil Cane Miller
Leading Global Sugar Merchant
 Started sugar trading &
merchandising operation
2005
2006
2007
2008
2009
2010
3
Sugarcane Milling Generates Not Just Sugar, But Three
Principal Outputs: Sugar, Ethanol, and Power
Sugar
Sugarcane
Evaporation decks Raw sugar storage
Refining
Final product
packaging and
storage
Product
mix
decision
Ethanol
Fermentation decks Distillation towers
Crusher
Storage ethanol
Molasses
Receiving and
washing
Bagasse
Boiler
Mill usage
To the grid
4
Sugarcane Industry Has Solid Fundamental Demand and
Potentially Significant Longer-Term Upside as a Renewable
Energy Source
Today
Potential
Market: Brazilian power
(co-generation)
• Strong demand and attractive
pricing
Market: Industrial biotech
• Biomaterials (e.g. PET…)
• Significant new demand for Brazilian cane
• Timeframe: Beyond 2012
Market: Brazilian ethanol
(flex-fuel)
• Very strong mid-term growth
trends (8%+ pa)
Market: Advanced fuels
• Biodiesel (EU), kerosene, butanol…
• Significant new demand for Brazilian cane
• Timeframe: Beyond 2012
Market: International Sugar
• Strong underlying growth trends
• Brazil the low-cost supplier
• Expanding global trade
Market: International ethanol
• E.g., US RFS (Renewable Fuel Standard)
• Significant new demand for Brazilian ethanol
• Timeframe: Beyond 2012
“Hydrocarbon economy”
“Carbohydrate economy”
5
Bunge’s Strategy in Sugar & Bioenergy
Build top 3 position in Brazilian cane milling industry
• Brazilian cane will be the low cost winner
Build top 3 position in global sugar and ethanol
trading & merchandising
Develop integrated global value chain supported by selected
upstream and downstream investments outside Brazil
• Leverage Bunge’s global network
Build global relationships with technology providers
and fuel/chemical industry
6
Illustrative Bunge Value Chains
Corn/Wheat
Food
Canola/Sun
Soy
Cane
Feed
Fuel and
Energy
Fertilizer
7
Role of strategic innovation in Bunge
Goals
Find more efficient and sustainable processing paths (less energy, waste)
Add additional value to our product chains
Create optionality across product chains. Convergence and subsitutability
Our Role
Collaborate with potential winners to scale up in Brazil and commercialize
Invest in selected partners, either directly or in co-development
Leverage global commodity processing footprint
Market intelligence on the linkages between geographies and crops
8
Potential of Microorganisms versus GM Crops
• Genetically manipulation – altering the DNA of a seed or micro-organism – is the most
common tool in developing new biological tools today.
• Seeds
– 8 to 12 years to commercial scale
– Each cycle is a harvest – weeks/months
– It has to be “viable” to sell – increased environmental risk
– Requires change in agricultural management
• Micro-organisms
– 3 to 5 years to commercial scale
– Each cycle is a generation hours/days
– It lives in very restrictive conditions – not “viable” in the environment – less risk
– Work with existing crops but can adapt quickly to new varieties
– Can be use as is in fermentation or have its enzymes extracted and used as
catalysts for chemical processes
99
Collaboration with Verenium – Enzymes for clean
Vegetable Oil Refining
– Use of the new generation of PLC phospholipases reduces by-products (gums) in
oil refining, increasing oil yield and reducing refining costs.
– Bunge, the vegetable oil specialist partner, developed the enzyme application
Purifine® graphics courtesy of Verenium Corporation
10
Solazyme Partnership – Connecting the sugar and oil
value chains
The process
11
Risk of convergence - Need to find right balance
versus demand for food and feed
Growth in world demand for grains and oilseeds
900
1990s
2.7%
800
700
2000s
CAGR
2.9%
2010s
2020s
Million tons
600
500
2.8%
400
300
Wildcard:
Industrial
Biotechnology
1.6%
200
100
0
All Uses
Source: LMC
Food
Feed
Fuel
12
Thank you.
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