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The information contained in this document belongs to Grupo Los Grobo and to the recipient of the document.
The information is strictly linked to the oral comments which were made at its presentation, and may only be used
by attendees of that presentation. Unauthorized copying, disclosure or distribution of the material in this document
is strictly forbidden and may be unlawful.
CONFIDENTIAL
Welcome toGrupo Los Grobo
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Food Inflation: The Growth Heptagon
ClimateOil
Environmental
Restrictions
Biofuels
Urbanization/
Mega cities
Free
Market
Consumption
Habits Changes
Welfare
Programs
IncomeGrowth
Population
Growth
Consumption
consumo per cpita
Fuente: USDA
Nvitas S.A.
Consumo de Carnes per Cpita en China
0
5
10
15
20
25
30
35
40
45
50
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Kg./
Hab.
AVICOLA
PORCINA
BOVINA
Poblacin(milesdemillones)
Poblacin(milesdemillones)
Fuente: USDA
Nvitas S.A.
USO DE MAIZ PARA ETANOL EN EE.UU.
0
20
40
60
80
100
120
81 83 85 87 89 91 93 95 97 99 01 03 05 07 09
Enmillonesdetoneladas
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
%
USO DE MAIZ PARA ETANOL
% SOBRE EL USO TOTAL DE MAIZ
Tm(
milesdem
illones)
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Food Inflation: The Solutions
Area
Yield
Infra Structure
Institutional
Framework
Demand
Innovation through Biotech and Operational Technology Improvements
New generation of Fertilizers / The water challenge
New Areas through environmental sustainable processes
Improvement of Actual Areas
In Land Logistics (Railways, Roadways, Warehouses)
Ports and Ships
Improvement of Local and Trading Institutional Framework
High Quality Organizations
Change in Consumption Habits
Biofuels Efficiency
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It is expected that 50% of agricultural growth takes place in MERCOSUR
2
4
5
2 4
2
6
13
35
50%
of totalgrowth
Forecasted production growth
Source: Based on OECD-FAO projections.
Only 3% of the world landis suitable for agricul turewithout irrigation
Growing urbanizationprocess in EmergingCountries
Water shortage in differentplaces in the world
Desertification and landdegradation
MERCOSUR is the regionwith the highest growthpotential to meet demand
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100 years of agricultureCereals and oilseeds produccion in tons
0
10.000.000
20.000.000
30.000.000
40.000.000
50.000.000
60.000.000
70.000.000
80.000.000
90.000.000
100.000.000
1900/01
1903/04
1906/07
1909/10
1912/13
1915/16
1918/19
1921/22
1924/25
1927/28
1930/31
1933/34
1936/37
1939/40
1942/43
1945/46
1948/49
1951/52
1954/55
1957/58
1960/61
1963/64
1966/67
1969/70
1972/73
1975/76
1978/79
1981/82
1984/85
1987/88
1990/91
1993/94
1996/97
1999/00
2002/03
2005/06
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5
0
2.000
4.000
6.000
8.000
10.000
1914
1917
1920
1923
1926
1929
1932
1935
1938
1941
1944
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
Carne (miles de tn) Leche (millones de lt)
Milk and meat production. 1914-2008in millions o f tons, and millons of litres
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0
50
100
150
200
250
300
1990 2000 2010 2019
MERCOSUR is today the largest soybean producerMillions of tn.
Worlds soybean production
Brazil and Argentina arethe main producers in theMERCOSUR
US and Canada rate ofgrowth decreases , asfarmland is scarcing
The rest of the world is notsuitable for high yieldagriculture
CAGR*Share of totalproduction by 2019
50%
36%
14%
Source: Oilworld.
* CAGR: Compound Average Growth Rate.
+6.2%
+4.2%
+2.4%
+8.1%
+3.0%
+2.8%
+3.6%
+0.6%
+2.1%
US + Canada
MERCOSUR
Rest of theworld
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Technology: Growth in Adoption Speed
New Technology Adoption in Pampean Agriculture 1980/2000
GMO
Pesticides
Direct seeding
Fertilizers
PrecisionAgricu lture
Silo bags
Inoculants
Technologyadoptionbyfarmer
s(%)
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A highly scalable model allowed GLG to become one of the largestLatAm agribusiness players in less than a decade, establishing a solid
track record of organic and M&A growthRevenuesPlanted area
Regional Leader Internationalization New Growth Era
Thousands of ha., Millions of USD
Development of a strongorigination network dividedinto three separate businessunits:
- Origination
- Input Retailing- Agricultural Production
Firstagribusinesscompany toobtain the ISO9001 certification
Knowledge exchange program with the TexasA&M University and Universidad de Buenos,first Los Grobo Case published
Expansion to
Uruguay withcreation ofAgronegociosdel Plata
Launching ofLos Grobo SGR*leverages thenetworksfinancingpotential
Expands to
Paraguayby foundingTierra Roja
Los Grobo Groupbecomes a HarvardBusiness SchoolCase Study
Transaction
with VinciPartnersopens thedoor toBrazil
Rapid growth in Brazil
- Partnership with Ceagro
- Acquisition of Selecta (Brazil)
- Sponsorship of Sollus Capital
Acquisi ti on of UPJ (Argent ina)
240
691
246
116
172
154
267
173
557
104
138
Los Grobo
AgropecuariaS.A. is foundedby AdolfoGrobocopatel
773
1,058
263
280
1,305
Mutual guarantee society.*
2004200320001990s1984 2009 20102006 2007 20082005 2011 2012E
Today GLG is one ofthe largest grainproducers and
service providers inLatin America
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Grupo Los Grobo is present throughout the agribusiness value chain
Production Services Processing
Development of geographicallydiversified portfolio of farms
Applying modern techn iquesto crops production
focusing on:- Maximizing yields in the
selected fields while
- reducing yield volatility
- generating better riskadjusted returns
Adding value to our grain originationnetwork by integrating downstreamactivities:
- Wheat milling on a regional scale
- combined with a state-of-the-artdried pasta plant
- Soybean deactivation facilities inBrazil
Supply of agricultural inputs to localfarmers
as well as financial services such as:
- Grain commercialization
- Hedging
Supply of warehousing and logisticservices
Leveraging its potential through GLGnetwork
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Grupo Los Grobo property framework2010
Shareholders Structure
Vinci PartnersGrobocopatel family
A brief descript ion
Grobocopatel family
More than 90 years of agribusiness experience
In 1984 Adolfo founded Los Grobo Agropecuaria composed by 4employees and 3k ha and became a Professional company at the first half ofthe 90s decade, managing today more than 1K employees
Under Gustavos management, Los Grobo was the first agro company in theworld to obtain the ISO 9001, becoming also a Harvard Business Case,farming in more than 260K ha
Vinci Partners
One of the most successful h istory in private equity in Brazil
Started as an investment vehicle of Banco Pactuals former partners
- Pactual was the largest investment bank in Brazil and one of the largestAsset Managers
- sold to UBS for US$ 3.1Bn in 2006
Vinci is Partners is one of the main shareholder of:
- PDG Realty, the largest real estate company in Brazil by market cap
- Equatorial Energia, a leading Brazilian energy company- Ethanol business in Brazil through CMAA
- The retail /fashion business through InBrands
Local partners
Paulo Fachim, partner in Brazil, founded Ceagro in 1994, and has morethan 20 years of experience in the Brazilian agricultural market
Marcos Guigou, partner in Uruguay, founded ADP in 2004, and has over 16
years of experience in agribusiness
22%78%
100% 100% 100% 65% 100% 100%
59,5%
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Grupo Los Grobo: One of the largest agribusiness producers
and services provider in South America
Regional Presence
2011/12, Thousands of ha., Millions of tn.
Own Planted Area
CAGR*
Brazil:
Production Area: 56k haInput Sales: US$ 122 mm
Grain Origination: 680K tnCrushing: 540 tn/day
Argentina:
Production Area: 115k haInput Sales: US$ 72 mmGrain Origination: 1,810k tnCrushing: 735 tn/day
Uruguay:
Production Area: 92k haInput Sales: US$ 35 mmGrain Origination: 400k tn
Paraguay:
Production Area: 16k haGrain Origination: 50k ton
Total:
Production Area: 280k haInput Sales: US$ 229 mmGrain Origination: 2,9 mm tnCrushing: 1,275 tn/day
Grain origination
* CAGR: Compound Average Growth Rate.
73%
27%
2006/07
1,5
2009/10
72%
2,0
28%
2,7
76%
24%
67%
33%
2004/05
0,7
65%
35%
22%
2007/08 2008/09
78%
1,9
2005/06
26%
74%
1,10,9
27% Own
73%
2011/12E
2,9
2010/11
Clients
19%
121
28%
2007/08
18%
25%
48%
14%
51%
7%
2005/06
9%
2006/07
178
141
50%
Wheat
Corn
Others
Soybean
5%12%
22%
263
52%
7%
2010/11
67%
16%
66%
21%6%7%
2009/10
247
15%
2011/12E
2807%
2008/09
245
59%
18%
12%
49%
28%29%10%
2004/05
15%7%
105
Areas where GLG hasan active presence
UruguayArgentina
Brazil
Paraguay
MA
PITO
GO
MG
BA
Brazil
MT
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GLG in numbers: fast growth leveraged on acquisitionsAcquisitions
Revenues
Millions of USD
Note: Revenues and EBITDA 08/09 in accordance to IRFS as of 30/04/09; Revenues and EBITDA 09/10 in accordance to IRFS as of 30/04/10.
CAGR*
* CAGR: Compound Average Growth Rate.
26%
19%1%
7%
2007/08
557.3
48%
21%
19%2%
11%
2006/07
267.1
67% 15%
2%16%
171.5
69%17% 2%
12%
2004/05
138.1
79%
2005/06
1%9%
2009/10
664.6
17% 4%
2003/04
96.7
75% 21%4%
2011/12E
TR
Industrial
LGA
UPJ
2010/11
1,058.5
31%
Ceagro
ADP
27%
35%
16%+38%
6%
39%
17%2%
9%
2008/09
8%
772.8
41%
6%
10%
1%
14%
31%
8%
35%
1,305.3
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Grain production is on the rise, expanding to new geographies
19%
33%
6%
2009/10
246.9
36%
1%
20%
37%
6%
2008/09
244.6
49%
1%13%
30%
7%
2007/08
178.0
68%
22%
9%
2006/07
141.3
80%
20%
2005/06
120.7
81%
19%
+15%
LGA
UPJCeagro
ADP
TR
2010/11
262.8
40%
2%
6%
33%
2011/12E
1% 20%3%
38%
279.7
Thousands of ha., % CAGR*
* CAGR: Compound Average Growth Rate.
GLG has focused it expansion in new geographies
and improvement of the revenues mix in each country
leveraging on experience exchange between managers and companies
GLG managed production (ha.)
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GLG focus on service provision, leveraged on its own production, will
grow as local commercial links matureMillions of tn., Millions of USD
15%
2008/09
142.3
37%
7%
35%
21%
2007/08
119.9
39%
36%
17%+42%
206.9
UPJ
LGA
ADP
Ceagro
22%
2010/11
54%
7%
28%
2005/06
28.3
75%
25%
2006/07
25%
36.7
72%
2009/10
158.1
18%
6%
61%
2011/12E
16%
53%
7%
25%
228.7
Note: Revenues and EBITDA 08/09 in accordance to IRFS as of 30/04/09; Revenues and EBITDA 09/10 in accordance to IRFS as of 30/04/10.
CAGR*
* CAGR: Compound Average Growth Rate.
WhileArgentina is intensive on grain trading
Brazil is focused on agricutltural inputs distribution
Grain traded Agricultural inputs distribution
50%
ADP
TR
2010/11
+18%
LGA
UPJ
Ceagro
0%
0%
0%0%
0% 12%
22%
14%
1%
2009/10
2.4
49%
9%
20%
21%
1%
2008/09
1.9
52%
8%
19%
20%
1%
2007/08
1.9
74%
11%
13%2%
2006/07
1.5
87%
13%
2005/06
1.1
89%
11%
2.7
0%0%
2%
14%
23%
11%
51%
2.9
2011/12E
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Leveraging the companys through a vast regional network of
storage capacity2011, Thousand of tn.
156.0
38%
62%
339.673%
9.5
27%
481.011%
986.175% 25%
89%
Own
Rented
Total storage capacity per country
Total
storagecapacity
GLG relies on asset lightstrategies when possible
renting 39% of storagecapacity
Brazil has rapidly become thecompanys main storagecapacity country (54%)
More than 50storing facilities
spread over 4countries
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where export logistics are key
Uruguay
Argent ina
Chile
Brazil
Venezuela
Peru
Bolivia
Paraguay
MA
PI
TOMT
GO
MS
PR
MG
Colombia
BA
Ponta da Madeira/MA, BR
Ponta da Madeira port:Loading Rate: 2 k mt/h.Draft: 15 mExpectable Line up: no line up (only by rain).Acc ess: On ly rai lway.
Paranagu/PR, BR Paranagu port:Loading Rate: 3 k mt/h.Draft: 12 mExpectable Line up: 15 days (plus rain).Storage Capacity: 65 k mtAcc ess : m ainly truck. 1 r ailway
Santos/SP, BRSantos port:
Loading Rate: 2 k mt/h.Draft: 13 mExpectable Line up: 15 days (plus rain).Access: truck and 3 railways
Lima (up river)Loading Rate: 1,5 k mt/h.Draft: 9 mExpectable Line up: 2 daysAcc ess : t ruck .
Nueva Palmira, UYNueva Palmira port (up river)Loading Rate: 1,5 k mt/h.Draft: 9 mExpectable Line up: 7 daysAccess: truck. 1 r ailway
Necochea, AR
NecocheaLoading Rate: 1,5 k mt/h.Draft: 12 mExpectable Line up: 15 days (plus rain)Acc ess : t ruck . 1 rai lway
Bahia BlancaLoading Rate: 1,5 k mt/h.Draft: 13 mExpectable Line up: 15 days (plus rain)Storage Capacity: 100 k mtAcc ess : t ruck . 1 rai lway
Bahia Blanca, AR
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GLG collects awards, attesting our track record by external evaluationsInstitutionAwardedYearAwards
Top 34 agribusiness company in Brazil 2010 Ceagro Exame Magazine
Best "Corporate Citizenship" in large company category for sustainable management 2009 Los Grobo Agropecuaria The American Chamber of Commerce in Argentina (AMCHAM)
Top 50 Companies to work for in Argentina and Top 20 in Uruguay 2009 Los Grobo Agropecuaria andAgronegocios del Plata
Great Place To Work (ARG)
Top 150 place to work and made into 500 best companies charts2009 Ceagro Revista Exame
Readers Choice Award: "Best Sustainability Report" 2008Fundacin EmprendimientosRurales Los Grobo
Global Reporting Initiative (GRI)
Award to Excelence 2008 Los Grobo Agropecuaria Amrica Economa Magazine
Enviromentally responsible company of the year 2008 Los Grobo Agropecuaria Institute for Enviromental Research at UCES (ARG)
Creative award Diente 20072007 Los Grobo Agropecuaria Crculo de Creativos Argentinos (Publicist Organization)
1st Place in CSR survey organized by the magazine Valor Sostenible" 2007 Los Grobo Agropecuaria Valor Sostenible Magazine (ARG)
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Committed and experienced management team, fully aligned
through a long term SOP programYears
AgribusinessCompany Executive Position Experience
GustavoGrobocopatel
Chairman
Founder and leader of GLG More than 25 years of experience in the industry, has been awarded a Honor
Mention at the Argentine Senate and a recognized as the agribusiness entrepeneurof the decade with the Konex Platinum Award
Graduated as an Agronomy Engineer at Universidad de Buenos Aires
HoracioBusanello
ChiefExecutive
Officer
Joined GLG in 2011 as Regional COO and LGA CEO Have worked all his life in top agribusiness companies such as Monsanto, Seneca
and Syngenta at top management positions CPA with postgraduate courses at INSEAD and Harvard
Antonio
Neto
ChiefFinancialOfficer
In 2008 Mr. Oliva Neto Joined Vinci Partners team and been appointed to be CFO atLos Grobo Brazil, becoming CFO at the group recently
Mr. Oliva has 13 years career with corporate finance, working in financial institutions Major in economics by Pontificia Universidade Catlica de Rio de Janeiro (PUC-RJ)
and holds an MBA in Corporate Finance by IBMEC
GerardoBurriel
CEO LGAArgentine
Division
Mr. Burriel has been a key commercial manager for the company since itsprofessionalization process began in the early 90s, becoming CEO in 2011
He holds several postgraduate courses in agribusiness and management by both theUniversidad de Buenos Aires and Universidad de San Andrs
PauloFachin
CEO
CeagroBrazilianDivision
Founded Ceagro in 1994
Strong entrepreneurship capacity, named Entrepeneur of the Year by the City ofBalsas Chamber of Commerce and Industry Over 20 years in agricultural production
MarcosGuigou
CEO ADPUruguayan Division
Founded ADP in 2004 Second largest soybean producer in Uruguay Several years of experience in agricultural production, being awarded one of top 100
most influential people in Uruguay
ElenaMorena
Director
IndustrialDivision
Joined GLG in 2005, having worked for 8 year at Pioneer, the international seed
company Graduated as a Business Administrator at Universidad de Buenos Aires
25 25
3 3
17 17
2 20
5 16
8 16
1 25
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GLG capital is fully invested in farming and services development
leading to superior returns
Quality management model
Intensive technology use
State-of-the-art plantingtechniques
Continuous innovation
Partnerships with localagribusiness leaders
Local management
Decentralized micro decision taking
Deep insights on clients
Asset light (100% leased landand machinery)
Focus on services and production
Active interaction with local producers
Creation of ecosystem in the region
Networkmodel
Localknowledge
Riskmanagement
Quality /Innovation
GeographicdiversificationIntegration
Strict policies designedat board level
Price and foreignexchange hedging
Climate risk control
Credit limits
State of the Art land operator
Relevant additional revenuesthrough services
Leverage the companysmarket knowledge
Second largest player in LatAm,with planted area of 273k ha
Operations in 4 countriesdiversifying crops risks
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Season
Productionphilosophy
Type of crops
2009/2010
27% 31% 28%31% 21%
12% 13% 13% 17% 20%
7%
9%7%8%10%
51%
2005/06
48%
2006/07
52%
2007/08
44%
2008/09
52%
2009/10E
Others
Corn
Wheat
Soybean
GLG geographical diversification and
positioning in different weather areas
are key to take advantage of year round
seasons allowing two harvests per year
59%Summer
41%Winter
0%
5%
10%
15%
20%
25%
30%
35%
0% 5% 10% 15% 20% 25% 30%
RS
GO
MS
MA
PR
GOMT
MA
PR
10YYieldVolatility
Gross Margin
Integration
GLG specializes in non perennialcrops, meaning
...crops with a 100 to 180 days thatafter harvesting requires re-seeding
increasing flexibility of crops with a large portion being soybean,
wheat and corn
GLG follows a strict ri sk-rewardphilosophy
analyzing locations not only on a profitbasis, but adjusting it for actual risks
which combined with our scale anddiversification allows GLG to choose thebest risk-reward sites for production
GLG specializes in non-perennial crops, active year round
following a strict risk-reward philosophy
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GLG has a one-stop-shop service concept that generates cash
inflows all year round
Integration
Wide portfo lio of services offered
available all year round
J F M A M J J A S O N D J F M A M J J A S O N D J
Summer I Growing Harvest Commercialization
Winter I Inputs buying Planting Growing Harvest Commercialization
Summer II Inputs buying Planting Growing Harvest Commercialization
Crop seasonplanning
Technicaldecisions
Inputs combo Planting Harvest Grain sale
Los Grobo providestechnical expertiseand otherconsulting servicesto other agriculturalproducers
Over 120 Specialists
on Field
Research and seedtests
Over 10 fieldsdedicated to research
Los Grobos tradingdesk and hedgingservices leverage thecompanys marketknowledge
Comprehensive logisticnetwork, providingtransportation andstorage solutions
Sale of own and thirdparty productionsecuring improved
scale
Input acquisition forLos Grobo and allpartners resulting ineconomies of scaleand appropriate soiltreatment
providing also
financing to farmers
Constant cropmonitoring andadvising to farmers
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GLG is present in three different climate regions, which combined
with crop diversification, reduces yield risks
Based on company research of soybean yields
Brazil
MA
PITO
MT
GO
MG
BA
Argent ina
Paraguay
Uruguay
Brazil
Tropical dry or savanna climate
Humid subtropical climate
Maritime Temperate climate
Regional presence allows reduces riskslower climate correlation which
Argentina Uruguay Paraguay Brazil
Argentina
Uruguay0.44
Paraguay
-0.10 0.26
Brazil-0.04 0.12 0.19
Low yield correlation betweenthe countries Los Grobo
has presence brings a portfolioeffect both to Own Productionand also to Services Business
Diversification through differentproduction cycles, as shown inthe previous chart, generates acash flow stream for thecompany less risky andseasonal
Geographical
diversification
Areas where GLG has an active presence
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Different cost structures between countries improves GLG
exposure to different assets
Geographical
diversification
7% 10% 11% 9%
15% 9% 10% 12%
22%
5%
17% 16%
19%
45%
32%28%
6%
11%5%
9%
22%
10%
14% 15%
9% 10% 11% 11%
Grain
Grain
Grain
US$
US$
Local currency
Local currency
Brazil Argentina Uruguay Paraguay
Land Lease
Harvest
Seeds
Chemicals
Fertilizer
G&A
Labor/machinery
Inputs
1,237 794 895 705Cost US$/ha=
There are signif icant cost/ha differences throughout count ries
Land lease cost, ranging from 19% in Brazil to 45% in Argentina for soybean production, while
Inputs range from 24% in Argentina, being larger in Uruguay and...
particularly higher in Brazil where inputs stand for 44% of total cost production
Soybeans Main exposureCost item
USD/ha.
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GLG applies state-of-the-art technology to produce grains in both,
the field and the office
Quality /
Innovation
Crop rotation ensures higher productivity in the long run
Appropriate fertilizer utilization
Environmentally conscious crop disease control
No-tillage seeding approach- Optimization of water use efficiency
- Improved fertility of soil chemistry and physics
- Increased soil biological activity
- Protection from exogenous factors (erosion by windand water)
Precision Agriculture
- Measures soil characteristics within a 5Ha grid...- combined with high technology machinery, allows
for optimal fertilizer application
Superior f ield technology
1stAgribuisness company ISO-certified in the world
In-house developed GroboSoft System, allowsmanagement of production network with superb quality
standards Process and Technology Support
- Ceres modeling allows optimization of fertilization
- RISK modeling for budgeting, simulating over 5,000different scenarios through Monte Carlo
- Agroecoindex generate KPIs that measure ourrelationship with the environment
Process management and IT Support
Corn 1st CropSoybean
Wheat2nd Crop Soybean
Crop rotation diagram Precision agriculture render
Volveral inicio Ayuda
Establecimiento LosGroboAgrop Telfono Localidad CONSOLIDADOPropietario LG Prod. Predominante Provincia BuenosAires
Aodeevaluacin 2006 Perodo Evaluado Ecorregin PampaOndulada-BuenosAires
Indicador 0 71.986 % PorcentajedecultivosanualesIndicador 1 9483.636 Mj/ha/ao ConsumodeenergafsilIndicador 2 0.181 Mj EF/Mj prod. Eficienciadeusode laenergafsilIndicador 3 -1.184 kg/ha/ao Balancede NitrgenoIndicador 4 -2.084 kg/ha/ao BalancedeFsforoIndicador 5 0.000 mg/l RiesgodecontaminacinporNIndicador 6 0.000 mg/l RiesgodecontaminacinporPIndicador 7 1772.625 Indicerelativo RiesgodecontaminacinporplaguicidasIndicador 8 5.197 ton/ha/ao RiesgodeerosinhdricayelicaIndicador 9 0.016 Indicerelativo Riesgodeintervencindehbitat
Indicador 10 0.007 ton/ha/ao Cambiodel stockdecarbonoIndicador 11 105.675 ton/ha/ao Balancede gasesinvernadero
Hoja1de2 PaneldeResultados
RESULTADOS02395-459022AGRICOLA2005-2006
DesagregacinporActividades/Potreros
GroboSoft order input screen Ceres model ing wheat fer ti l izat ion curve
Agroecoindex KPI sheetRisk forecasting result sli p
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and a 21st
Century corporate governance model
Quality /
Innovation
General framework
addressing the MilleniumGoals of United Nations
United Nations
GlobalCommitment
Ethics codeArea policies
Coexistence manualEthics committee
Risk map
Resguarda
system
GlobalReporting
Initiative (GRI)
Board of Directorsand External
Audi ting
Corporate governanceframework
guaranteeing transparencyof the decisions of the Board ofDirectors and
preventing frauds
Managements internal framework
prevents risks within theorganization, under the guidelines ofan international standard by Global
Compact
Preemptive and controlframework
in line with the Ro de JaneiroDeclaration (1992) Precautionary
Principle
Communication channel
which is a transparent,confidential and outsourcedclaim management entity opento all stakeholders
Management and reportingtool
based on a triple bottom lineapproach to complimentfinancial reports
Corporategovernance
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Local knowledge is a key asset to GLG business strategy and is
carefully cherished and developed at all levels
Local
Knowledge
Localmanagement
Deep clientknowledge
Local partners
Operations are usually managed by local people that have deep ins ights of the area
Approximately 70% of employees are on the country side, having direct contact with the local businessecosystem, were everyday decision taking is made locally
with the coordination of a corporate division
overviewed by a board of directors quarterly
Business practices and culturesare different at micro local level
and GLG thoughtfully studiesclient characteristics in more than50 micro regions
GLG observes variables such as:
- Market size (farmers, ha.,productivity, etc)
- Farmers financial preferencesand input purchasing habits
- Local competition
19%44%
19%
30%19% 20%
27% 24%3%
3%6%
3%
94%
Pamplona
45%
Sete Placas
81%
CampoLindo
80%
Jatoba
26%
BR050
9%
49%
SoBartolomeu
Banks
Barter
Tradings
Own
Farmers financial preferences in Cristalina, Gois
GLG acquisition strategy relies in a thoughtful search for local agribusiness leaders
that stay afteracquisition
fully aligned with GLG:
- Paulo Fachim owns 40,5% of Ceagro (Brazil)
- Marcos Guigou owns 35% of ADP (Uruguay)
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The network model generates operational and financial leverage
WharehouseLos Grobo
Own Production: 5 6 k ha
Clients: 10 12 k ha
Railw
ay
and centralizes crop operations
For each hectare Los Grobo utilizes forown production
it intends to provide services forother 2 hectares in the region
Los Grobo operates several mid-sizeproperties
positioning each property as thecenter of a large network of producers
Los Grobo leases 100% of its land andmachinery
immobilizing less capital than thetraditional producer
Typical Los Grobo Influence Area
Own Area: 1 / 3
Clients: 2 / 3
Capex NeedsLos Grobo vs. Traditional Producers
Example of Los Grobo Network
Provides services for local producers .... shares resources
Clients
Leverages on Scale Asset Light Develops theEcosystem
Network
model
Contractor
Land Owner
TraditionalProducers
Land
Machinery
InfrastructureInfrastructure
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Risk management strategy is comprehensive, managing all
types of risks at different levels
Risk
management
Weekly reporting to CFO at corporate level
to ensure enforcement of Board policies
Strict policies for all risks are designed at Board level in order to take advantage of the unique broader viewgained as a regional company
Daily ALM hedging for both FXand Grains positions
Cost Hedging policy on OwnProduction
Clear exposures for grain and
fertilizerpositions on servicesbusiness
Physical Forward and NaturalHedging preference
Margin Call risk limits
In-house developed ratingsystems of clients
Interest rate charged according toclient rating
Different approval instances fordifferent credit amounts
Concentration limit by clients andMicro-Regions
Geographic d iversification atMERCOSUR and country level
Crop diversification amongseasons (summer and wintercrops)
RISK modeling at micro regionlevel
Insurance coverage for negativetail risk scenarios
Crops and FX Credit Climate
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Grupo Los Grobo is the preeminent vehicle in the Latin American
Agribusiness Community
+
+
+
+
+
Integration
Geographic Diversification
Quality / Innovation
Local knowledge
Network Model
Risk management
Organized and scalable growth
platform with secure access to
key grain production / origination