1 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
Bunge Approach to Engagement SEPTEMBER 29, 2011
2 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
Agenda
Introduction to Bunge
Approach to Engagement
Efforts in Brazil
Q+A
3 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
4 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
…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
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We Know Governments Influence Our Markets
6 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
Dodd-Frank: A Visual Representation
243+ new rules vs only 16 created by Sarbanes Oxley
Source: U.S. Chamber of Commerce
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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
8 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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.”
9 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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)
10 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
-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
11 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
Global Development Debate Linked to Ag
69
40
28
22
3
38
GDP Workforce
% Contribution by Sector
Serv. Manuf. Agric.
Source: McKinsey, WEF
12 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
13 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
14 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
Obesity is Global Challenge
Prevalence of Overweight & Obese Males Age 15+
Source: World Health Organization
As of 2010 45% of Chinese
males are overweight
15 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
Philosophical Approach
Acknowledge preferences.
Respect differences.
Listen.
Learn.
Exert Leadership.
Move ahead together.
Microsoft
16 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
18 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
19 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
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But Has Been a Source of Challenges
License to operate; customer, reputation and brand issues
21 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
22 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
23 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
24 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
25 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
Sustainability Reporting
26 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
27 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
28 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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
29 MIDWEST FOOD AND AGRIBUSINESS EXECUTIVE SEMINAR
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