RETROSPECT OF US CORN ETHANOL

INDUSTRY AND THE POTENTIAL

FOR BRAZIL
Presented by: Dave VanderGriend – CEO

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 CORN-BASED ETHANOL

• What is the opportunity for corn-based ethanol?

• What can be learned from the US corn-based

ethanol industry?

• How can Brazil benefit from corn-based ethanol?

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 WHAT IS THE OPPORTUNITY FOR CORN?

ETHANOL

PROTEIN

HI-FIBER FEED

PROTEIN
BIOREFINERY
CORN HI-PRO FEED

OIL
BIODIESEL 3

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 THE IMPORTANCE OF CORN-BASED ETHANOL

• Grow local economy and agriculture

• Meet protein and energy demand

• Improve the environment

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 CORN USAGE IN THE US
Million MT
400

350

300

250

200

150

100

50

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total Corn Production Corn Exports Corn Used For Ethanol DDG Production
5
Source: US National Corn Growers Association

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US ETHANOL NET EXPORTS
Billion Liters
6

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-1

-2

6
Source: Renewable Fuels Association - 2017 U.S. Ethanol Exports and Imports Statistical Summary

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TOP MARKETS FOR US ETHANOL

7
Source: Renewable Fuels Association - 2017 U.S. Ethanol Exports and Imports Statistical Summary

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WHAT IS THE OPPORTUNITY FOR BRAZIL?

Grow local agriculture Grow local economy

Cheapest corn in the world Improve economies of Brazilian
Midwest corn is landlocked agribusiness and rural communities
New markets for corn

Meet demand for energy Improve the environment

Meet growing demand for fuels RenovaBio
Lower imports

Meet demand for protein

Meet growing demand for
protein and provide a soybean
meal substitute
8

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 BRAZIL CORN PRODUCTION AND EXPORTS
Million MT
100

90

80

70

60

50

40

30

20

10

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Production Exports
Sources: CONAB – National Supply Company (Production) and MDIC - Ministry of Development, Industry & Commerce (Exports) 9

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 BRAZIL ETHANOL PRODUCTION AND DEMAND
Billion Liters
50

45

40

35

30

25

20

15

10

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Production Imports Demand
10
Sources: MME – Ministry of Mines and Energy and Decennial Brazilian Plan of Energy 2024 and 2026

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 BRAZIL ETHANOL TRADE
Billion Liters
6

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Exports Imports
11
Source: UNICA – Sugarcane Industry Association

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 WORLD ETHANOL CONSUMPTION
Billion Liters
100

90

80

70

60

50

40

30

20

10

-
2007 2008 2009 2010 2011 2012 2013 2014 2015
12
Source: US Department of Energy

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 BRAZIL ANIMAL PROTEIN PRODUCTION
Million MT
27

26

25

24

23

22

21

20
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
13
Sources: ABPA – Animal Protein Brazilian Association and ABIEC - Brazilian Association of Beef Exportation Industry

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2017 BRAZIL ANIMAL PROTEIN PRODUCTION

13 million MT 2nd largest producer Largest exporter

9.3 million MT 2nd largest producer Largest exporter

3.7 million MT 4th largest producer 4th largest exporter

Others 1 million MT
14

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FEED & FUTURE

DDGS

15

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WHAT PEOPLE ARE EATING

FAO, 2018
16

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 DDGS TODAY

EXCESSIVE PROTEIN

FEED RATION INGREDIENTS TOO HIGH IN FAT

FEED PRODUCTS FLEXIBILITY
MARKET EXPANSION
OIL CONTENT PRODUCES
SOFTER BACON FAT

TOO HIGH IN FIBER

17

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FEED & FUTURE

18

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 AMBIENT AIR POLLUTION

CO2

Greenhouse effect*

Particulate Matter
NO2
SO2
O3
*Source: climate.nasa.gov
4.2 million deaths every year**
**Source: UN World Health Organization 19

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SAO PAULO - BRAZIL SHANGHAI - CHINA

20

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 BRAZIL CO2 REDUCTION BASED ON ETHANOL USAGE

80 0

70 10
Ethanol Consumption

60 20

CO2 Reduction
50 30

40 40

30 50

20 60

10 70

0 80
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Ethanol Consumption (billion liters) CO2 Reduction (billion kg)

21
Sources: MME – Ministry of Mines and Energy and Decennial Brazilian Plan of Energy 2026

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 WHAT COULD BRAZIL’S FUTURE LOOK LIKE?
Grow local agriculture
Value-Added per sac of corn
R$ 39 / sac*
Meet demand for energy
13 billion liters of ethanol by 2026
Meet demand for protein
10.5 million MT of feed & oil by 2026
*Based on ALCOOAD project located in MT
Grow local economy by 2026
6,500 direct jobs
26,000 indirect and induced jobs
R$ 32 billion contribution to GDP
R$ 7 billion in tax revenue
Improve the environment by 2026
22 million MT in CO2 reduction
22
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 TAKE AWAY

• Abundant feedstock available in Brazil

• Increasing demand for energy and protein

• Very lucrative payback

• New markets for corn

• Creation of new jobs

• Growth opportunity for the local economy

• Ethanol creates healthier environment

23

© 2018 ICM, Inc. All Rights Reserved.

 Dave
VanderGriend
CEO

CONTACT TITLE
Presented by:
Issam Stouky Name
Title for ICM, Inc.
Global Business Development
Issam.Stouky@ICMINC.com
+1 (316) 977-6623
24

© 2018 ICM, Inc. All Rights Reserved.