SLC Agrícola, founded in 1977 by SLC Group, is an agricultural producer, focusing on cotton, soybean and corn. It was the first Company in the world whose shares were traded in the Stock Exchange, so SLC Agricola became an example in the agricultural sector. It has 11 production units strategically located in six Brazilian states, totaling 223.4 thousand hectares in the 2009/10 marketing year – 120.8 thousand of which planted with soybean, 64.7 thousand with cotton, 34.8 thousand with corn, and 3.1 thousand with other crops, including coffee, wheat and corn seed. The Company’s business model is based on a large-scale, modern, production system, with standardized production units, thoroughly up-to-date technology and rigorous cost controls, underpinned by social and environmental responsibility. Since its inception, SLC Agrícola has built solid expertise in the prospection and acquisition of arable land in new farming regions. The acquisition of land with high production potential also seeks to take advantage of the potential price appreciation of rural properties in Brazil, thanks to their comparative advantages in relation to such leading agricultural countries as the United States, China, India and Argentina.
Last Update on May 13, 2010
Strategic Focus (Last Update on April 22, 2010)
Brazil is considered one of the world’s last agricultural frontiers due to its sheer size, abundant rainfall, availability of fertile land and modern production technology. The Company’s growth strategy is based on three pillars: Acquire new farms. By carefully analyzing factors such as size, soil quality, location, regional climate, altitude, topography, price per hectare, potential for logistics development and quality of documentation, among other factors, the Company seeks to identify and acquire rural properties in Brazil’s cerrado region with excellent production and appreciation potential; Increase production by leasing land. Leasing areas close or adjacent to our farms, thereby expanding the area under cultivation, will enable us to increase production using existing infrastructure, consequently diluting and reducing our fixed costs and unit production costs, in addition to lower initial investment needs; Increase the cultivation of second crops. Weather conditions and our technological expertise have allowed us to obtain two crops of cotton and corn per season, in turn increasing planted area, reducing unit production costs and leading to technical benefits for crop management. Competitive Differentials Over the past thirty years, SLC Agrícola has developed a business model based on operating efficiency and large-scale production. The Company introduced modern management techniques from the industrial sector into the Brazilian agricultural sector. Following are a few of the competitive advantages that back up SLC Agrícola’s leadership position in the global agricultural sector: High Yield. SLC Agrícola’s yield is higher than the average Brazilian and U.S. yields for cotton and soybeans, based on data from Conab and the USDA, respectively, according to which, corn yield is twice the Brazilian average and equivalent to the U.S. average. The Company’s high yield results mainly from: (i) cost structure and efficient operating cycle; (ii) production technology, with a high degree of mechanization of the planting and harvesting process; (iii) use of a rotating crop system, which contributes to lower incidence of plagues and diseases, as well as more efficient use of fertilizers and sustainable use of herbicides and pesticides; (iv) effective use of the direct planting technique, which avoids turning the soil, thus reducing soil, water and nutrient loss to negligible levels, as well as decreasing production costs through reduced machine use; (v) experience in correcting the soil chemical composition and in selecting seeds; (vi) skillful use of fertilizers, herbicides and pesticides, which enables greater technical efficiency. In addition, SLC Agrícola expects that the introduction of genetically modified seeds will increase productivity and reduce production costs, especially with regard to pest control; Strategic and diversified locations. SLC Agrícola’s property portfolio is strategically located in six states of the Brazilian cerrado region: Goiás, Mato Grosso, Maranhão, Mato Grosso do Sul, Bahia and Piauí. The geographical diversification of these farms minimizes potential regional climatic and plague, and disease-incidence risks; Scale and Standardization. The Company’s business model is based on the standardization of production in its farms, which includes the adoption of facilities, production infrastructure, equipment, operational organization chart, standardized management and agricultural planning that allow the Company to (i) expand and efficiently manage several production units; (ii) reduce operating costs; (iii) control the quality of its products more efficiently; (iv) efficiently implement its growth plan; Crop Rotation System. SLC Agrícola produces cotton, soybean and corn in crop rotation system, which guarantees the appropriate management of crops and maintenance of a rich and fertile soil. This production technique is used in all of the Company’s farms and provides attractive yields and benefits to the production system, such as increased efficiency in pest control and better use of the machinery and labor; Expertise in Land Acquisition. SLC Agrícola pioneered the cultivation of crops in the cerrado region. We have acquired the skills required for evaluating and acquiring farms in the country’s agricultural frontiers, with high production and real estate appreciation potential; Qualified and Professional Management. SLC Agrícola’s managers have vast experience in and profound knowledge of the agricultural sector and its production processes. The interests of the Company’s employees are aligned with the interests and culture of SLC Agrícola, maximizing results by following the principles of serving clients with excellence, ethics and innovation.