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Welcome to
Grupo Los Grobo
CONFIDENTIAL

Oil
Population
Growth

Poblacin (miles de millones)

Food Inflation: The Growth Heptagon

Climate
USO DE MAIZ PARA ETANOL EN EE.UU.
45%

120

Income
Growth

Consumption

35%

% SOBRE EL USO TOTAL DE MAIZ

30%

80

25%
%

En millones de toneladas

Biofuels

40%

USO DE MAIZ PARA ETANOL

100

60

20%
15%

40

10%
20
5%
0

0%
81

83

85

87

89

91

93

95

97

99

01

03

05

07

09

Welfare
Programs

Tm (miles de millones)

Fuente: USDA
Nvitas S.A.

Urbanization/
Mega cities

consumo per cpita

Consumo de Carnes per Cpita en China

50
45

AVICOLA
PORCINA

40

BOVINA

Kg./Hab.

35

Consumption
Habits Changes

30
25
20
15

Free
Market

10
5

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

Fuente: USDA
Nvitas S.A.

Environmental
Restrictions
1

Food Inflation: The Solutions

New Areas through environmental sustainable processes

Improvement of Actual Areas

Innovation through Biotech and Operational Technology Improvements

New generation of Fertilizers / The water challenge

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

Area

Yield

Infra Structure

Institutional
Framework

Demand

It is expected that 50% of agricultural growth takes place in MERCOSUR

Forecasted production growth

Only 3% of the world land

is suitable for agriculture
without irrigation

3
2

Growing urbanization
process in Emerging
Countries

Water shortage in different

places in the world

13

4
5

2
6

50%
of total
growth

Desertification and land

degradation
MERCOSUR is the region
with the highest growth
potential to meet demand

Source: Based on OECD-FAO projections.

3

2005/06

2002/03

1999/00

1996/97

1993/94

1990/91

1987/88

1984/85

1981/82

1978/79

1975/76

1972/73

1969/70

1966/67

1963/64

1960/61

1957/58

1954/55

1951/52

1948/49

1945/46

1942/43

1939/40

1936/37

1933/34

1930/31

1927/28

1924/25

1921/22

1918/19

1915/16

1912/13

1909/10

1906/07

1903/04

1900/01

100 years of agriculture

Cereals and oilseeds produccion in tons

100.000.000

90.000.000

80.000.000

70.000.000

60.000.000

50.000.000

40.000.000

30.000.000

20.000.000

10.000.000

Milk and meat production. 1914-2008

in millions of tons, and millons of litres

10.000

8.000

6.000

4.000

2.000

Carne (miles de tn)

2007

2004

2001

1998

1995

1992

1989

1986

1983

1980

1977

1974

1971

1968

1965

1962

1959

1956

1953

1950

1947

1944

1941

1938

1935

1932

1929

1926

1923

1920

1917

1914

Leche (millones de lt)

5

MERCOSUR is today the largest soybean producer

Millions of tn.

CAGR*

Share of total
production by 2019

Worlds soybean production

300

+3.6%
250

MERCOSUR
+8.1%

50%

200

150

US and Canada rate of

growth decreases, as
farmland is scarcing

+0.6%

+6.2%

Brazil and Argentina are

the main producers in the
MERCOSUR

+3.0%
US + Canada
100

+4.2%

36%

50

Rest of the
world

+2.1%

+2.8%

+2.4%

14%

1990

The rest of the world is not

suitable for high yield
agriculture

2000

2010

2019

* CAGR: Compound Average Growth Rate.

Source: Oilworld.
6

Food Supply: The Big Change

World Soybean Complex Net Exports
1983/84 - 87/88

2003/04 - 07/08
Others

Others

7%

8%

USA

Argentina

29%

14%
Argentina 31%

56% USA
23%
Brazil
33%
Brazil

Total: 47 million tons

Total:120 million tons

7

Technology: Growth in Adoption Speed

New Technology Adoption in Pampean Agriculture 1980/2000

GMO
Pesticides

Technology adoption by farmers (%)

Inoculants
Direct seeding
Fertilizers

Silo bags
Precision
Agriculture

A highly scalable model allowed GLG to become one of the largest

LatAm agribusiness players in less than a decade, establishing a solid
track record of organic and M&A growth
Thousands of ha., Millions of USD
Regional Leader

Planted area

Internationalization

Expansion to
Uruguay with
creation of
Agronegocios
del Plata
Launching of
Los Grobo SGR*
leverages the
networks
financing
potential

Knowledge exchange program with the Texas

A&M University and Universidad de Buenos,
first Los Grobo Case published

Development of a strong
origination network divided
into three separate business
units:
- Origination
- Input Retailing
- Agricultural Production

New Growth Era

Expands to
Paraguay
by founding
Tierra Roja

Transaction
with Vinci
Partners
opens the
door to
Brazil

Today GLG is one of

the largest grain
producers and
service providers in
Latin America

Rapid growth in Brazil

- Partnership with Ceagro
- Acquisition of Selecta (Brazil)
- Sponsorship of Sollus Capital
Acquisition of UPJ (Argentina)

Revenues

280

1,305
263

1,058
246
240
Los Grobo Group
becomes a Harvard
Business School
Case Study

773

691

2009

2010

173
First
agribusiness
company to
obtain the ISO
9001 certification

Los Grobo
Agropecuaria
S.A. is founded
by Adolfo
Grobocopatel

1984

557
154
104

116
267

1990s

2000

2003

2004

138

172

2005

2006

2007

2008

2011

2012E

* Mutual guarantee society.

9

Grupo Los Grobo is present throughout the agribusiness value chain

Production

Services

Development of geographically
diversified portfolio of farms

Supply of agricultural inputs to local

farmers

Applying modern techniques

to crops production

as well as financial services such as:

- Grain commercialization
- Hedging

focusing on:
- Maximizing yields in the
selected fields while
- reducing yield volatility
- generating better risk
adjusted returns

Supply of warehousing and logistic

services

Processing
Adding value to our grain origination
network by integrating downstream
activities:
- Wheat milling on a regional scale
- combined with a state-of-the-art
dried pasta plant
- Soybean deactivation facilities in
Brazil

Leveraging its potential through GLG

network

10

Grupo Los Grobo property framework

2010
Shareholders Structure

A brief description

Grobocopatel family

Vinci Partners

78%

Grobocopatel family

22%

More than 90 years of agribusiness experience

In 1984 Adolfo founded Los Grobo Agropecuaria composed by 4
employees and 3k ha and became a Professional company at the first half of
the 90s decade, managing today more than 1K employees
Under Gustavos management, Los Grobo was the first agro company in the
world to obtain the ISO 9001, becoming also a Harvard Business Case,
farming in more than 260K ha

Vinci Partners

100%

100%

100%

65%

100%

100%

59,5%

One of the most successful history 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 largest
Asset 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 more
than 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
11

Grupo Los Grobo: One of the largest agribusiness producers

and services provider in South America
2011/12, Thousands of ha., Millions of tn.
Regional Presence

CAGR*

Own Planted Area

Brazil:
Production Area: 56k ha
Input Sales: US$ 122 mm
Grain Origination: 680K tn
Crushing: 540 tn/day

245

7%
19% 6%

Argentina:
Brazil

TO

MA
PI
BA

Brazil
MT
GO
Paraguay

Production Area: 115k ha

Input Sales: US$ 72 mm
Grain Origination: 1,810k tn
Crushing: 735 tn/day

MG

Uruguay

12%
10%

141
14% 9%

105 15%
7%
7%
28%
28%
29%
51%
50%
49%

48%

Others
15%

Corn

21%

16%

18%

Wheat

66%

67%

59%

Soybean

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12E

Grain origination

Paraguay:
2,9

Production Area: 16k ha

Grain Origination: 50k ton

2,7

Total:
Areas where GLG has
an active presence

280
7%

12%

25%
52%

263

Uruguay:
Production Area: 92k ha
Input Sales: US$ 35 mm
Grain Origination: 400k tn

Argentina

121

178 7%
18%
22%

247 5%

1,9

Production Area: 280k ha

Input Sales: US$ 229 mm
Grain Origination: 2,9 mm tn
Crushing: 1,275 tn/day

* CAGR: Compound Average Growth Rate.

1,5
1,1
0,9

22%

28%

33%

35%
65%

67%

74%

2004/05

2005/06

2006/07

27%

Own

78%

72%

76%

73%

Clients

2008/09

2009/10

27%

26%

0,7

24%
2,0

73%

2007/08

2010/11 2011/12E
12

GLG in numbers: fast growth leveraged on acquisitions

Millions of USD

Acquisitions

CAGR*

Revenues

1,305.3
10%
1%
1,058.5

Industrial
TR

14%

ADP

31%

Ceagro

8%

UPJ

35%

LGA

9%
1%
16%

+38%

557.3
11%
19%
267.1
96.7
75%
2003/04

4%
21%

138.1
17%
79%
2004/05

171.5
4%

17%
69%
2005/06

12%
2%

67%
2006/07

16%
2%
15%

772.8
7%

1%

19%
2%

664.6
9%

2%

35%

17%
26%
6%

21%

48%

41%

2007/08

2008/09

8%

39%
6%

31%

27%
2009/10

2010/11

2011/12E

* CAGR: Compound Average Growth Rate.

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.
13

Grain production is on the rise, expanding to new geographies

CAGR*

Thousands of ha., %
GLG managed production (ha.)

+15%

279.7
246.9

244.6
7%
178.0
141.3
120.7
19%

20%

262.8

33%

37%

TR

6%

6%

30%

6%
33%

ADP

20%

Ceagro

9%
22%
1%

13%

1%

19%

20%

80%

68%

49%

2005/06

2006/07

2007/08

2008/09

UPJ

2%

1%
81%

3%

36%

40%

38%

2009/10

2010/11

2011/12E

LGA

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
* CAGR: Compound Average Growth Rate.
14

GLG focus on service provision, leveraged on its own production, will

grow as local commercial links mature
CAGR*

Millions of tn., Millions of USD

Grain traded

Agricultural inputs distribution

2.7

2.9
2%
1% 14%

+18%

2.4
1%

1.9

1.9
2%
13%

20%

1.5

0% 11%
0%
13% 0%
19%
9%
0%
1.1 0%
8%
0% 11%
0%
74%
87%
49%
52%
89%

2005/06

2006/07

2007/08

2008/09

228.7
23%

22%
20%

2009/10

ADP

14%

21%
1%

TR

12%

206.9

Ceagro
+42%

11%

16%

ADP

53%

Ceagro

7%

UPJ

25%

LGA

17%
158.1

UPJ

142.3
119.9

15%

21%

54%

25%
35%
50%

51%

LGA

36%
36.7
28%
25%
72%
75%

61%
7%

7%

28.3

2010/11 2011/12E

2005/06

2006/07

39%

37%

2007/08

2008/09

6%
18%
2009/10

22%

2010/11 2011/12E

While Argentina is intensive on grain trading

Brazil is focused on agricutltural inputs distribution
* CAGR: Compound Average Growth Rate.
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.
15

Leveraging the companys through a vast regional network of

storage capacity
2011, Thousand of tn.

Rented
Own

Total storage capacity per country

Total
storage
capacity

75%

89%

25%

986.1

11% 481.0

GLG relies on asset light

strategies when possible
73%
38%
62% 156.0

27% 339.6

renting 39% of storage

capacity
More than 50
storing facilities
spread over 4
countries

Brazil has rapidly become the

companys main storage
capacity country (54%)

9.5

16

where export logistics are key

Ponta da Madeira port:
Loading Rate: 2 k mt/h.
Draft: 15 m
Expectable Line up: no line up (only by rain).
Access: Only railway.

Venezuela
Colombia
Ponta da Madeira/MA, BR
MA
PI

TO
Brazil
MT

Peru

BA
GO

Bolivia

MG

MS
Paraguay
Chile

PR

Paranagu/PR, BR

Argentina

Uruguay

Lima (up river)

Loading Rate: 1,5 k mt/h.
Draft: 9 m
Expectable Line up: 2 days
Access: truck.

Santos/SP, BR

Santos port:
Loading Rate: 2 k mt/h.
Draft: 13 m
Expectable Line up: 15 days (plus rain).
Access: truck and 3 railways

Paranagu port:
Loading Rate: 3 k mt/h.
Draft: 12 m
Expectable Line up: 15 days (plus rain).
Storage Capacity: 65 k mt
Access: mainly truck. 1 railway

Nueva Palmira, UY
Nueva Palmira port (up river)
Loading Rate: 1,5 k mt/h.
Draft: 9 m
Expectable Line up: 7 days
Access: truck. 1 railway
Necochea, AR
Necochea
Loading Rate: 1,5 k mt/h.
Draft: 12 m
Expectable Line up: 15 days (plus rain)
Access: truck. 1 railway
Bahia Blanca, AR

Bahia Blanca
Loading Rate: 1,5 k mt/h.
Draft: 13 m
Expectable Line up: 15 days (plus rain)
Storage Capacity: 100 k mt
Access: truck. 1 railway
17

GLG collects awards, attesting our track record by external evaluations

Awards

Year Awarded

Institution

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 and

Agronegocios del Plata

Great Place To Work (ARG)

2009

Ceagro

Revista Exame

Readers Choice Award: "Best Sustainability Report"

2008

Fundacin Emprendimientos
Rurales 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)

2007

Los Grobo Agropecuaria

Crculo de Creativos Argentinos (Publicist Organization)

2007

Los Grobo Agropecuaria

Valor Sostenible Magazine (ARG)

Top 150 place to work and made into 500 best companies charts

Creative award Diente 2007

1st Place in CSR survey organized by the magazine Valor Sostenible"

18

Committed and experienced management team, fully aligned

through a long term SOP program
Years
Company

Executive

Position

Experience

Agribusiness

Gustavo
Grobocopatel

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 entrepeneur
of the decade with the Konex Platinum Award
Graduated as an Agronomy Engineer at Universidad de Buenos Aires

Horacio
Busanello

Chief
Executive
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

25

Antonio
Neto

Chief
Financial
Officer

In 2008 Mr. Oliva Neto Joined Vinci Partners team and been appointed to be CFO at
Los 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

CEO LGA
Argentine
Division

Mr. Burriel has been a key commercial manager for the company since its
professionalization process began in the early 90s, becoming CEO in 2011
He holds several postgraduate courses in agribusiness and management by both the
Universidad de Buenos Aires and Universidad de San Andrs

17

17

Paulo
Fachin

CEO
Ceagro
Brazilian
Division

Founded Ceagro in 1994

Strong entrepreneurship capacity, named Entrepeneur of the Year by the City of
Balsas Chamber of Commerce and Industry
Over 20 years in agricultural production

20

Marcos
Guigou

CEO ADP
Uruguaya
n 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

16

Elena
Morena

Director
Industrial
Division

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

16

Gerardo
Burriel

25

25

19

GLG capital is fully invested in farming and services development

leading to superior returns
State of the Art land operator
Relevant additional revenues
through services
Leverage the companys
market knowledge

Strict policies designed

at board level
Price and foreign
exchange hedging
Climate risk control
Credit limits

Second largest player in LatAm,

with planted area of 273k ha
Operations in 4 countries
diversifying crops risks
Integration

Geographic
diversification

Risk
management

Quality /
Innovation

Network
model
Asset light (100% leased land
and machinery)
Focus on services and production
Active interaction with local producers
Creation of ecosystem in the region

Quality management model

Intensive technology use
State-of-the-art planting
techniques
Continuous innovation

Local
knowledge
Partnerships with local
agribusiness leaders
Local management
Decentralized micro decision taking
Deep insights on clients
20

GLG specializes in non-perennial crops, active year round

following a strict risk-reward philosophy

Integration

2009/2010

Season

Production
philosophy

12%

13%
31%

28%

51%

48%

52%

2005/06

2006/07

2007/08

Winter

17%

7%

27%

GLG geographical diversification and

positioning in different weather areas
are key to take advantage of year round
seasons
allowing two harvests per year

GLG follows a strict risk-reward

philosophy
analyzing locations not only on a profit
basis, but adjusting it for actual risks
which combined with our scale and
diversification allows GLG to choose the
best risk-reward sites for production

13%
8%

10%

9%
7%

20%

Others
Corn

21%

Wheat

44%

52%

Soybean

2008/09

2009/10E

31%

41%
59%

10Y Yield Volatility

Type of crops

GLG specializes in non perennial

crops, meaning
...crops with a 100 to 180 days that
after harvesting requires re-seeding
increasing flexibility of crops
with a large portion being soybean,
wheat and corn

Summer

35%
RS

30%
25%
20%

MS

15%
PR

10%
MA

5%

GO

MT

0%
0%

5%

10%

15%

20%

25%

30%

Gross Margin

21

GLG has a one-stop-shop service concept that generates cash

inflows all year round

Integration

Wide portfolio of services offered

Crop season
planning

Technical
decisions

Los Grobo provides

technical expertise
and other
consulting services
to other agricultural
producers
Over 120 Specialists
on Field

Inputs combo

Research and seed

tests
Over 10 fields
dedicated to research

Planting

Input acquisition for

Los Grobo and all
partners resulting in
economies of scale
and appropriate soil
treatment
providing also
financing to farmers

Harvest

Constant crop
monitoring and
advising to farmers

Grain sale

Los Grobos trading

desk and hedging
services leverage the
companys market
knowledge

Comprehensive logistic
network, providing
transportation and
storage solutions
Sale of own and third
party production
securing improved
scale

available all year round

J
Summer I

Winter I

Summer II

Growing

A
Harvest

Inputs buying

Commercialization

Planting

Growing

Harvest

Inputs buying

Planting

Commercialization

Growing

Harvest

Commercialization

22

GLG is present in three different climate regions, which combined

with crop diversification, reduces yield risks

Geographical
diversification

Areas where GLG has an active presence

Regional presence allows

lower climate correlation which

Brazil

MA
TO
Brazil
MT

Argentina

Paraguay

Brazil

Low yield correlation between

the countries Los Grobo

Argentina

has presence brings a portfolio

effect both to Own Production
and also to Services Business

PI
BA

Uruguay
0.44

GO
Paraguay

Uruguay

reduces risks

MG
Paraguay

Argentina

-0.10

0.26

-0.04

0.12

Brazil
0.19

Uruguay

Diversification through different

production cycles, as shown in
the previous chart, generates a
cash flow stream for the
company less risky and
seasonal

Based on company research of soybean yields

Tropical dry or savanna climate
Humid subtropical climate
Maritime Temperate climate

23

Different cost structures between countries improves GLG

exposure to different assets

Geographical
diversification

USD/ha.
Cost item

Soybeans

Cost US$/ha=
Harvest
Labor/machinery

Main exposure

1,237

794

895

705

9%

10%

11%

11%

Grain

14%

15%

Local currency

9%

Local currency

10%
22%
11%

G&A

5%

6%

Land Lease

32%

19%

28%

Grain

45%
22%

Fertilizer
Chemicals
Seeds

Inputs

17%

16%

US$

15%

5%
9%

10%

12%

US$

7%

10%

11%

9%

Grain

Brazil

Argentina

Uruguay

Paraguay

There are significant cost/ha differences throughout countries

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

24

GLG applies state-of-the-art technology to produce grains in both,

the field and the office

Quality /
Innovation

Superior field technology

Process management and IT Support

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 wind
and water)
Precision Agriculture
- Measures soil characteristics within a 5Ha grid...
- combined with high technology machinery, allows
for optimal fertilizer application

1st Agribuisness company ISO-certified in the world

In-house developed GroboSoft System, allows
management of production network with superb quality
standards
Process and Technology Support
- Ceres modeling allows optimization of fertilization
- RISK modeling for budgeting, simulating over 5,000
different scenarios through Monte Carlo
- Agroecoindex generate KPIs that measure our
relationship with the environment

Corn

GroboSoft order input screen

1st Crop
Soybean

Ceres modeling wheat fertilization curve

RESULTADOS

Volver al inicio
Establecimiento Los Grobo Agrop
Propietario LG
Ao de evaluacin 2006

2nd

Indicador 0
Indicador 1
Indicador 2
Indicador 3
Indicador 4
Indicador 5
Indicador 6
Indicador 7
Indicador 8
Indicador 9
Indicador 10
Indicador 11

Wheat
Crop Soybean

Crop rotation diagram

Precision agriculture render

Hoja 1 de 2

Risk forecasting result slip

71.986
9483.636
0.181
-1.184
-2.084
0.000
0.000
1772.625
5.197
0.016
0.007
105.675

Telfono 02395-459022
Prod. Predominante AGRICOLA
Perodo Evaluado 2005-2006

%
Mj/ha/ao
Mj EF/Mj prod.
kg/ha/ao
kg/ha/ao
mg/l
mg/l
Indice relativo
ton/ha/ao
Indice relativo
ton/ha/ao
ton/ha/ao
Desagregacin por Actividades / Potreros

Ayuda
Localidad CONSOLIDADO
Provincia Buenos Aires
Ecorregin Pampa Ondulada - Buenos Aires

Porcentaje de cultivos anuales

Consumo de energa fsil
Eficiencia de uso de la energa fsil
Balance de Nitrgeno
Balance de Fsforo
Riesgo de contaminacin por N
Riesgo de contaminacin por P
Riesgo de contaminacin por plaguicidas
Riesgo de erosin hdrica y elica
Riesgo de intervencin de hbitat
Cambio del stock de carbono
Balance de gases invernadero
Panel de Resultados

Agroecoindex KPI sheet

25

and a 21st Century corporate governance model

General framework

Management and reporting

tool
based on a triple bottom line
approach to compliment
financial reports

Communication channel

Quality /
Innovation

addressing the Millenium

Goals of United Nations

Global
Reporting
Initiative (GRI)

United Nations
Global
Commitment

Resguarda
system

which is a transparent,
confidential and outsourced
claim management entity open
to all stakeholders

Board of Directors
and External
Auditing

Corporate
governance

Corporate governance
framework
guaranteeing transparency
of the decisions of the Board of
Directors and
preventing frauds

Coexistence manual
Ethics committee
Risk map
Preemptive and control
framework
in line with the Ro de Janeiro
Declaration (1992) Precautionary
Principle

Ethics code
Area policies
Managements internal framework
prevents risks within the
organization, under the guidelines of
an international standard by Global
Compact
26

Local knowledge is a key asset to GLG business strategy and is

carefully cherished and developed at all levels

Local
Knowledge

Local partners

GLG acquisition strategy relies in a thoughtful search for local agribusiness leaders
that stay after acquisition
fully aligned with GLG:
- Paulo Fachim owns 40,5% of Ceagro (Brazil)
- Marcos Guigou owns 35% of ADP (Uruguay)

Local
management

Operations are usually managed by local people that have deep insights of the area
Approximately 70% of employees are on the country side, having direct contact with the local business
ecosystem, were everyday decision taking is made locally
with the coordination of a corporate division
overviewed by a board of directors quarterly

Deep client
knowledge

Business practices and cultures

are different at micro local level
and GLG thoughtfully studies
client characteristics in more than
50 micro regions
GLG observes variables such as:
- Market size (farmers, ha.,
productivity, etc)
- Farmers financial preferences
and input purchasing habits
- Local competition

Farmers financial preferences in Cristalina, Gois

3%
3%

19%

30%

20%

27%
3%

6%
19%

24%

Banks

9%

Barter

19%

Tradings

49%

Own

44%

94%
81%

80%

45%
26%
Pamplona Sete Placas

Campo
Lindo

Jatoba

BR050

So
Bartolomeu
27

The network model generates operational and financial leverage

Provides services for local producers

.... shares resources

Network
model

and centralizes crop operations

For each hectare Los Grobo utilizes for

own production
it intends to provide services for
other 2 hectares in the region

Los Grobo leases 100% of its land and

machinery
immobilizing less capital than the
traditional producer

Los Grobo operates several mid-size

properties
positioning each property as the
center of a large network of producers

Typical Los Grobo Influence Area

Capex Needs
Los Grobo vs. Traditional Producers

Example of Los Grobo Network

Machinery

Land Owner

Land

Infrastructure

Infrastructure

Clients

Own Area: 1 / 3

y
lwa
Rai

Contractor

Own Production: 5 6 k ha
Clients: 10 12 k ha

Wharehouse
Los Grobo

Traditional
Producers

Clients: 2 / 3

Leverages on Scale

Asset Light

Develops the Ecosystem

28

Risk management strategy is comprehensive, managing all

types of risks at different levels

Risk
management

Strict policies for all risks are designed at Board level in order to take advantage of the unique broader view
gained as a regional company

Crops and FX

Daily ALM hedging for both FX

and Grains positions
Cost Hedging policy on Own
Production
Clear exposures for grain and
fertilizer positions on services
business
Physical Forward and Natural
Hedging preference
Margin Call risk limits

Credit

Climate

In-house developed rating

systems of clients
Interest rate charged according to
client rating
Different approval instances for
different credit amounts
Concentration limit by clients and
Micro-Regions

Geographic diversification at
MERCOSUR and country level
Crop diversification among
seasons (summer and winter
crops)
RISK modeling at micro region
level
Insurance coverage for negative
tail risk scenarios

Weekly reporting to CFO at corporate level

to ensure enforcement of Board policies

29

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

30