bunge approach to engagement - purdue university · pdf file2 midwest food and agribusiness...

1 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR

Bunge Approach to Engagement SEPTEMBER 29, 2011


Agenda

Introduction to Bunge

Approach to Engagement

Efforts in Brazil

Q+A


A Leading Global Agribusiness & Food Company

Agribusiness

• A global leader in

oilseed processing

• A global leader in grain

and oilseed marketing

• Leading producer of oils,

margarines & industrial

fats in the Americas

and Europe

• Growing oils position

in Asia

• Leading corn and wheat

miller in the Americas

• 21 mmt sugarcane milling

capacity producing sugar,

ethanol and electricity

• #2 in global trade

and distribution

• Fertilizer operations

in Brazil, Argentina

and the U.S.

• Joint venture with

OCP in Morocco

Sugar & Bioenergy Food & Ingredients Fertilizer

Revenue: $46 Billion

Employees: ~32,000

Facilities: ~400

Countries of Operations: 30+

Key Facts

54%

19%

12%

9%

6% Average Net Operating Assets

Agribusiness

Sugar & Bionenergy

Food & Ingredients

Fertilizer

Other


…With a 192-Year History

2010

2009

2008

2007

2005

2002

2001

1999

1998

1997

70s & 80s

1967

1945

1938

1918

1905

1884

1859

1818

Starts business in North America

Relocates to Antwerp to trade commodities

J.P.G. Bunge founds Bunge & Co. in Amsterdam

Establishes operations in Argentina to trade grain

Makes first export of soybeans from Brazil

Enters Brazilian fertilizer market with purchase of Serrana

Expands into Brazil and enters the wheat milling business Diversifies along the

food production chain

In Brazil, purchases soy processor Ceval and begins acquisition of new fertilizer brands

Builds largest U.S. soybean crushing and refining plant

Moves headquarters to U.S. and creates international marketing unit

Goes public on NYSE and becomes Argentina’s leading agribusiness company

Purchases Cereol to become the world’s largest soy processor

Opens first soybean processing plant in China

Purchases Santa Juliana sugarcane mill in Brazil

Builds first soy processing plant in U.S.

Begins building an export terminal in the U.S. Pacific Northwest and a crushing plant in Vietnam

In Brazil, sells fertilizer nutrients business and adds five new sugarcane mills with Moema purchase

Purchases edible oils company Walter Rau in Germany


We Know Governments Influence Our Markets


Dodd-Frank: A Visual Representation

243+ new rules vs only 16 created by Sarbanes Oxley

Source: U.S. Chamber of Commerce


Influence of Civil Society is Strong

81%

61%

46% 48%

80%

63%

55% 55%

Brazil China U.S. UK/FR/GR

How much do you trust business and NGOs to do what is right?

Business NGOs

Source: Edelman Trust Barometer; survey of global opinion leaders


The Two Play Off Each Other

“Big business always say they need political

certainty. Today Sarkozy gave them the

certainty that the G20 is committed to properly

regulate markets to ensure both growth

and stability”

“We will never put an end to hunger, poverty and

misery in the world if we do not succeed in

stabilising the prices of raw materials. . . We will

not reconcile our citizens to [capitalism], if we

are not capable of offsetting market forces with

counterbalances.”


Size of Challenge Requires Action from All Sectors

Rice, corn, wheat, barley, sorghum, rye and oats, soy, canola, sun and peanuts

2.5 2.5

4

1.5

2006 2050

Required Increase in Grain & Oilseed Production (bmt)


-50

0

50

100

150

200

250

300

350

400

03

-01

01

-02

10

-02

08

-03

06

-04

03

-05

01

-06

10

-06

08

-07

05

-08

03

-09

12

-09

10

-10

Rising Food Prices and Heightened Volatility

Create Immediate Tension Food Commodity Prices – 2001-2011

Palm Oil Wheat Corn Sugar Soybeans Rice


Global Development Debate Linked to Ag

69

40

28

22

3

38

GDP Workforce

% Contribution by Sector

Serv. Manuf. Agric.

Source: McKinsey, WEF


So is the Environmental Debate

3,100

4,500

800

1,500

600

900

Current 2030 Estimate

Global Water Withdrawals by Sector (bm3)

Ag Industry Munic/Domest

Source: McKinsey


Cannot Address Climate Without Ag

74%

12%

14%

Global GHG Emissions by Sector

Other Land use/Forestry Agriculture

Ag, land use and forestry produce ¼ of world’s GHG emissions

Sources: WRI U.S. EIA


Obesity is Global Challenge

Prevalence of Overweight & Obese Males Age 15+

Source: World Health Organization

As of 2010 45% of Chinese

males are overweight


Philosophical Approach

Acknowledge preferences.

Respect differences.

Listen.

Learn.

Exert Leadership.

Move ahead together.

Microsoft


Bunge GGA Mission Statement

Improve the global food chain

Serve as a resource of first choice

to decision-makers and opinion shapers

Lead by

Example

Multicultural Team

Unique

Model

Purpose

Areas

Objective

Global Trade Infrastructure, trade policy,

world food security

Markets Financial regulations,

regulatory harmonization

Food/Feed Regulatory harmonization,

safety, nutrition and health

Sustainability Biodiversity/land use, water,

GHG, Labor/social

Policies, reporting

in the public

interest

Original, focused,

marketable

information

Participating in

public forums,

dialogue

On-the-ground

sustainability

projects

Lobbying, other

regional outreach

Elements

Integrated and Decentralized

Efforts in Brazil


Brazil is Important to Bunge

Agribusiness Sugar & Bioenergy Food & Ingredients

• Third largest

exporter in Brazil

and the largest in

agribusiness

• Leader in soybean

origination and

crushing

• Leading producer

of oils, margarines,

mayonnaise and

industrial fats

• Leading wheat

miller

• Among top 5 sugar

cane processors

• 20 M tons

sugarcane milling

capacity, producing

sugar, ethanol

and electricity

Fertilizer

• Leading fertilizer

distributor

• 50% stake in JV

with OCP in

Morocco

• Volume: ~5 mmt

of fertilizers sold

Key Facts

Employees: > 22,000

Facilities: > 100


And Vital to the Industry

Site of Significant Growth in Production and Exports

Source: USDA

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Soy and Corn Production (mmt)

Soybeans Corn

#2 Soybean complex #1 Beef and chicken #1 Sugar #1 Ethanol #1 Orange juice #1 Tobacco #1 Coffee #1 Cellulose

Brazil Position in World Exports


But Has Been a Source of Challenges

License to operate; customer, reputation and brand issues


Look at Amazon Region Tells the Story

Intersection of population growth, economic development, ag expansion, environmental conservation, land rights

Para: 7.6m,

+23%

Amazonas: 3.5m,

+24%

Amapa + Roirama:

1.1m, +40%

2010

population,

% growth

since 2000


Situation has Demanded a Multi-faceted Approach

Strategies

• Stronger intellectual capital

• BG elements: policies, transparency

• On-the-ground actions: with growers and other stakeholders

• Advocacy and lobbying

• ENGAGEMENT


Direct Outreach with Growers

Locations

• Emas-Taquari

• Uruçui-Mirador

Goal

• Improve compliance with environmental laws (legal reserves and APPs)

• Create biodiversity corridors among contiguous farms

Results

• 200,000 hectares mapped

• 35,000 hectares filed for legalization with the environmental agency

• Creation of new land-use maps

• 340,000 seedlings produced to support reclamation

http://www.conservation.org/


Collaboration with Government

Promote

awareness of

environmental laws

Provide best

practices for legal

compliance

Advertise benefits

of sustainable

production Distributed to 40,000 growers

by Bunge, Ministry and IBAMA

in Cerrado frontier areas

Partnership with Ministry of Environment and local Agencies


Sustainability Reporting


Game Changing Steps: Soy Moratorium

Launched July 2006

Moratorium

• No purchase of soy from areas deforested after July 2006

Soy Working Group

• To promote sustainable agriculture among farmers

• Create effective mapping and monitoring systems

• Advocate for improved economic and ecological zoning

Coalition of industry and NGOs, with endoresements from Banco

do Brasil and Ministry of Environment

STTR de Santarém

http://www.conservation.org/


Statistics

48,809

157,896

302,149

2007/2008 2008/2009 2009/2010 2010/2011

Area Monitored (ha) Mato Grosso, Rondonia, Para states

Deforestation in Amazon Biome Soy Since 2006 (ha)

Soy (MT, RO, PA)

Other Deforestation (MT, RO, PA)

Deforestation (rest of Biome)

Source: ABIOVE Source: ABIOVE


Responses

“An important strategy in the fight against deforestation

of the Amazon”

• Greenpeace

“We see the moratorium as a powerful and essential tool

to enable all of us to achieve our ultimate goal of

sustainable sourcing”

“We understand the registration of farms in the Amazon biome is

a crucial element of the process. It will enable monitoring and

auditing to continue to be more effective, helping to ensure that

soy production does not drive deforestation in the Amazon.”

• AHOLD, ASDA, Carrefour, Co-operative, Kraft, Marks & Spencer,

McDonald’s, Nutreco, Ritter-Sport, Sainsbury’s, Waitrose,

Wal-Mart Brazil


Conclusion

Value of engagement is clear. . .

• Question of shaping or responding to changes in landscape

And growing

• Issues becoming bigger and more global

• Industry profile higher than in past

Process is continuous. . .

And simultaneous

• Listen

• Learn

• Lead

bunge approach to engagement - purdue university · pdf file2 midwest food and agribusiness...

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