São Martinho speeds expansion plan
Valor Econômico
In 2008, when it defined its latest strategic growth plan, the São Martinho group foresaw reaching the crushing capacity of 30 million tons of sugar cane by 2020, compared to the current 14 to 15 million. The increase would assure a market share of 2.5% or 3%, considering the crushing projections of 900 million tons in the country at the end of this decade. But the deep changes occurred in the segment since last year, marked by investments of new players -including the oil companies -, and the strong consolidation, motivated reviewing the plan. The way São Martinho operates is not going to change, but some projects should be implemented more quickly.
But according to Fábio Venturelli, CEO of the group, that doesn't mean São Martinho will get into a frantic rush to grow, as it happened with some groups of the segment in the recent past and that, in some cases, caused more problems than solutions. However, he continues, stepping on the gas pedal now is the "main priority". Venturelli refers to the three pillars on which the growth plan of the company is based. Among them is the increase of the installed capacity itself, which departs from the current assets, but also moves forward in other fronts. Boa Vista, the Goiás unit of São Martinho, is undergoing works to increase the capacity from 2.5 million tons to 4 million in the short term. But the goal, according to the CEO, is that it gets to something between 7 million and 8 million tons. "The strategy will also go through the erection of new power plants, acquisitions and strategic partnerships. It will be a combination of all such elements. Before the end of this year we will have that horizon paved".
In a year in which nearly all companies of the area were affected by heavy rains during the crushing, the São Martinho group managed to crush more than in 2009 and broke processing records in the plant that takes its name - the largest in the world -, with 8 million tons. The company was able to maximize the production of sugar, which rose 26.5%, to take advantage of the international prices that reached record levels. Despite being a year of turmoil in the markets, São Martinho reduced its debts, closing the last 12 months with a net debt ratio equivalent to 2.97 times its EBITDA.
In that regard, Venturelli said the growth will have to take place at a model that replicates the current performance. The diversification of products, especially those of greater added value, is also a tendency of the company. The main step of such strategy was the joint venture with Amyris Biotechnologies, a partnership that tends to go past the limits of chemical specialties produced from the broth of the sugar cane and advance in researches of new fuels produced from the same raw material.
Logistics, the second pillar of growth, is in line with the expansion of the railroad terminal located inside the farm where the São Martinho plant is located. There, the carriage capacity will go from 800 thousand tons of sugar to up to 3 million in a partnership with Rumo Logística, controlled by Cosan, the largest group of the sector in the world. The project will increase the access of São Martinho to the rails of ALL, with which Cosan has a long-term contract, and to the very sugar terminals of Cosan in the port of Santos.
Until the end of August, the company should announce the amount of investments required to increase the capacity of the terminal. But, according to Venturelli, it is an amount between R$ 20 million (US$ 11 million) and R$ 50 million (US$ 27.8 million). The company also intends to undertake - in a date yet to be defined - the construction of the waterway terminal at the port of São Simão, in Goiás, near the Boa Vista plant, the newest unit under construction of the group. The intention, according to Venturelli, is to leave with the ethanol on the barges from São Simão, cross part of Minas Gerais, and get to the municipality of Conchas, in the interior of São Paulo. He says the company already has all the licenses required to operate, but the date of construction of the terminal at the Goiás port has not yet been defined. "The savings in the cost of transport may get to 20%", says Venturelli.