The São Martinho Group

[GRI 2.1/ 2.6/ 2.7/ 2.9]

The São Martinho Group is among the top producers of sugarcane and ethanol in Brazil, according to a survey carried out by the Brazilian Sugarcane Industry Association (UNICA), and is considered a global leader in the biofuels industry. Currently, the Group has three mills in operation: São Martinho, located in Pradópolis, in the Ribeirão Preto region of São Paulo state; Iracema, located in Iracemápolis, in the Limeira region of São Paulo state; and 51% of the Boa Vista mill, located in Quirinópolis, 300 km from Goiânia, in Goiás state, in partnership with Petrobras Biocombustível. The Group also has a unit for the production of ribonucleic acid, Omtek, which is also located in Iracemápolis, and a 32.18% stake in the Santa Cruz mill, located approximately 45 kilometers from the São Martinho mill.

The Group’s average harvest mechanization ratio is 87.3%, an industry benchmark, and the Boa Vista mill’s ratio is 100%. The São Martinho, Santa Cruz and Iracema mills produce sugar and ethanol, while the Boa Vista mill is dedicated exclusively to the production of ethanol. The first two mills also generate electricity by burning sugarcane bagasse, ensuring self-sufficiency and selling the surplus. Meanwhile, Omtek produces yeast byproducts using advanced biotechnological processes, mostly for the foodstuff and animal feed markets.

Hydrous ethanol (used in the tanks of cars that run on ethanol) and anhydrous ethanol (mixed into gasoline as an additive to fuel vehicles that run on gasoline) are primarily routed to the domestic market to meet demand from major fuel distributors. In the sugar market, a majority of the production is very very high polarization (VVHP) sugar, which is exported, primarily to Europe and the Middle East.

A total of 12.9 million tons of sugarcane were processed during the 2012/2013 harvest, including the partial consolidation of the Boa Vista mill (50.95%) and the Santa Cruz mill (32.18%). This amount was 21.9% greater than the 2011/2012 harvest. The production of sugar and anhydrous ethanol was prioritized, since they offer the highest profit margins, with production increases of 25.3% and 43.9%, respectively.

The Group continued with its investment plan, with spending allocated to expanding its mills and sugarcane plantations, as well as the completion of the cogeneration project at the São Martinho mill. These investments totaled approximately R$400 million, of which R$198.5 million were spent to purchase the sugarcane plantations of the São Carlos mill, R$120 million to increase milling and R$70 million on completion of the cogeneration project.