Corporate Profile

Jalles Machado S.A. is a company with differentiated returns that engages in the production of sugar and ethanol, cogeneration of electricity and production of cleaning products, yeast and latex. In the agricultural area, we are obsessed with the constant pursuit of high productivity and cost reduction, achieved thanks to fully owned sugarcane fields, intensive use of mechanization, irrigation and varieties suitable for the climatic conditions of the region. On the product side, the Company stands out by offering products with higher value added.

Our Itajá brand supplies domestic consumers with white and organic sugar, with the latter also being exported to more than 20 countries. Both products have important margin differentials compared to VHP sugar and comply with the requirements of several certifications, allowing the company to operate in different segments of local and international markets.

Jalles Machado is one of the world’s largest producers and exporters of organic sugar. According to the renowned magazine SuperVarejo, Itajá white sugar is the second most sold sugar in the Midwest, North and Northeast regions, and the fifth in Brazil.

Jalles Machado produces anhydrous, hydrated and organic ethanol, besides cleaning products, alcohol-based gel and hospital-grade alcohol for the domestic market, at the plant in the Jalles Machado unit (UJM). The strong energy cogeneration operation, in partnership with Albioma, allows the two units, Jalles Machado and Otávio Lage (UOL), to be self-sufficient in energy and export the surplus via long-term contracts. Energy sales improve cash flow stability and predictability and are strategic for the Company, since practically all revenue from energy sales is converted into EBITDA, thanks to marginal operating costs and expenses.

Asset location is another important differential. The proximity of the plants enables the Company to capture synergies in costs and selling and administrative expenses, in addition to optimizing the use of agricultural equipment. With the two units in the state of Goiás, the Company serves consumer markets in the Midwest and Northeast regions with lower freight costs and in a more competitive way. These regions are underserved and have recorded growth rates above the national average.

The state government also grants certain long-term tax benefits, which contribute to higher margins.

In Goiás, planted area expansion costs tend to be lower than in the more traditional sugarcane growing regions, such as the state of São Paulo. Finally, when the North-South and West-East railways are finalized, Jalles Machado will also benefit from the proximity to an important export corridor.

Since around 70% of production costs are related to the field, throughout its history, the Company has constantly sought to reduce field costs through increasingly efficient management. In recent years, Jalles Machado has made significant investments in irrigation, as well as investments to reduce the average age of the sugarcane field, which is fully owned by the Company, thus mitigating supply risk and increasing field quality control. Harvesting and planting are fully mechanized, increasing productivity and reducing farming costs.

Irrigation is one of Jalles Machado’s main agriculture differentials. In the last few years, investments were focused on rescue irrigation, which protects against adverse weather conditions, and full and/or supplement irrigation, which increases sugarcane yield and the average life of the plant, diluting the cost of planting over a longer period.

The Company also relies on sustainable agricultural management techniques, with the use of state-of-the-art machinery and technology, in addition to great efforts to increase the number of plant varieties, through partnerships with IAC, CTC and other institutes. Currently, there are more than 20 varieties of sugarcane adapted to the region’s climate and soil, with greater productivity and resistance to disease and weather conditions.

Jalles Machado has sought to stand out in corporate governance since its inception. The Company follows the highest standards of governance, with strict financial discipline and risk management. Financial, commercial and sustainability committees are in place, and the first two meeting monthly to draw up strategies with the support of external advisors of national and international renown. The Board of Directors is composed of majority and minority shareholders, as well as two independent members of great repute in the market.

Jalles Machado has been audited by one of the “Big Four” since 1987; it has an experienced and highly qualified management team and a fully dedicated Investor Relations department. Its corporate rating is published by two of the world’s leading risk rating agencies.

Operational efficiency and management’s obsession with reducing costs through efficiency gains are reflected in several of the Company’s operating indicators. High agricultural productivity, the sale of higher value-added products and its experienced management team, who works based on disciplined risk management, make Jalles Machado a unique player in the national sugar and energy sector.