Table of contents 5
Introduction 7
1. The need for food and fuel production and the role of Brazilian agribusiness 8
1.1 The global economic/financial crisis 8
1.2 Food demand and food inflation 10
1.3 The road to addressing increased food demand and food inflation 14
1.4 Background and overview of Brazil\u2019s agricultural production 18
1.5 The importance of agribusiness for the Brazilian economy 24
1.6 The scenario for TNC investments: trends and global issues 29
1.6.1 The political-legal environment for investments in Brazil 29
1.6.2 The economic and natural environment for investments in Brazil 30
1.6.3 The socio-cultural environment for investments in Brazil 31
1.6.4 The technological environment for investments in Brazil 33
2. The sugar-energy value chain in Brazil 35
2.1 The sugar-energy supply chain 35
2.2 The sugar-ethanol evolution in Brazil 42
2.2.1 The sugar evolution in Brazil 42
2.2.2 The ethanol evolution in Brazil 45
2.3 Mapping and quantification of the sugar-energy supply chain in Brazil2 48
2.4 Pre-farm statistics 50
2.4.1 Agricultural inputs 50
2.5 On-farm statistics: sugarcane production 53
2.6 Post-farm statistics 54
2.6.1 Equipment, industrial services, and supplies 54
2.6.2 Sugar mills and ethanol plants 55
2.6.3 Ethanol 56
2.6.4 Wholesale distributors and service stations 57
2.6.5 Sugar 57
2.6.6 Wholesale and retail 58
2.6.7 Bioelectricity 58
2.6.8 Yeast 59
2.6.9 Carbon credits 59
2.6.10 Bioplastics 59
2.7 Facilitating agents 60
2.7.1 Brazilian development bank (BNDES) 60
2.7.2 Outsourcing of cutting, loading, and transportation of sugarcane (CLT) 60
2.7.3 Sugar and ethanol road freight export 61
2.7.4 Tolls (road fees) for sugar and ethanol exportation 61
2.7.5 Cost at port (Port of Santos) 61
2.7.6 Research & development (R&D) 61
2.7.7 Events 61
2.7.8 Specialty magazines 61
2.7.9 Health care and meals 61
2.7.10 Wage bill/jobs 62
2.7.11 Taxes 62
2.8 Managerial implications and discussion 63
3. Strategic plan for the sugar-energy value chain in Brazil 64
3.1 Introduction 64
3.1.1 Political-legal factors 64
3.1.2 Economic-natural factors 64
3.1.3 Socio-cultural factors 64
3.1.4 Technological factors 65
3.1.5 Strategic planning process 65
3.2 An application of the CHAINPLAN method 65
3.3 Understanding 71
3.4 External analysis: opportunities and threats 71
3.4.1 Biofuel drivers for investments in Brazil 71
3.5 Internal analysis: strengths and weaknesses 84
3.6 Objectives (goals) of the plan 89
3.7 Main strategies 91
3.8 Projects and decisions related to production, products, research, development, and innovation 92
3.9 Projects and decisions related to communication 94
3.10 Projects and decisions related to distribution and logistics 95
3.11 Projects and decisions related to training 96
3.12 Projects and decisions related to coordination and adequacy of the institutional environment 97
3.13 Conclusions 98
4. An overview of FDI in the sugar-energy sector in Brazil and lessons learned 99
4.1 Characterisation of the largest groups in the sugar-energy sector 99
4.2 The institutional and regulatory framework 101
4.3 The growth strategies in the sugar-energy sector 103
4.4 The role of investment funds (private equity) 104
4.5 Financing (leverage debt equity) 115
4.6 Corporate social responsibility 116
4.7 Environmental regulations and trends 117
5. Concluding remarks \u2013 FDI: suggestions for regulations, public policies, and incentives 119
5.1 How to evaluate the capacity of international investment to generate the regional development 119
5.2 How to promote and regulate international investments 120
5.3 A strategy for international investments 124
5.4 Planning strategies for 2010-2020 126
5.5 Final discussion 127
References and websites 129
Annex 1. Most relevant M&A operations from 2007 to 2010. 134
About the authors 135
Keyword index 137