We account for the following competitive advantages:
Integrated model covering the whole agribusiness value chain
This model reduces cash flow volatility: we are the only Brazilian and Latin American platform that operates in an integrated -and at the same time geographically diversified way- in the main agricultural commodities production regions of Latin America. We possess a diversified portfolio of activities, covering different segments of the agribusiness value chain, such as input supply, agricultural production, commercialization of our own production and of others’, industrial processing and internal logistic operation. Moreover, the geographical diversification of our operations minimizes climatic risks and allows for crop variety.
This leads to a flexible strategy in crop culture management, productivity increase and consistent profitability, as a result of income growth and operational profit margins. A coordinated performance along the value chain, together with the operation of various commodities –especially non perennial crops- provides for operational synergy creation between firms, a reduction of the cash flow’s volatility potential, an increase in flexibility with regards to capital allocation and a strategic identification of investment opportunities.
Agricultural production model based on the asset smart concept, seeking return on invested capital
Our agricultural production business model is based on what we call asset smart, which pursues a return on invested capital by using rented lands or in partnership, outsourced machinery, crop rotation and a second harvest process or safrinha. In addition, this model’s priority is farmland diversification within different geographical locations and cultures, with the purpose of reducing the inherent risk to agricultural activity. We grant for the efficiency of this business model, provided that it minimizes capital immobility, optimizes agricultural activities and gives flexibility to production. Moreover, this model generates a rapid reposition capacity of the farmed area and reduces the investment costs of the operation, allowing for a higher return on invested capital as well as a business platform scalability.
Business intelligence based on the network model and one-stop-shop concepts
In order to create an integrate environment with local producers, we develop business networks and relationships in different locations in which we operate, by promoting partnerships and offering services. Thus, we create a relationship with clients and partners based on fidelity, as well as a regional leadership, that give us relevant influence in the production areas, together with a deep knowledge of the various local cultures and a business intelligence suitable for the development of our activities (network model).
Moreover, we perform our activities according to a one-stop-shop model, through which we offer general solutions for agricultural activities. These include technical expertise sharing, financial activities and storage and transport services provision.
Our network model, together with the one-stop-shop concept, gives leverage to our productive and financial operations and a continued cash operation all through the year -not just during the harvest season-. Besides, our own multi modal logistic platform, in addition to a wide network of storage facilities close to distribution centers, as well as the contract signed with Ferrovia Norte Sul S.A., a Vale company., provide us with opportunities all along the logistic chain.
Proven capacity for indentifying and generating strategic acquisitions
A combination of technical and operational knowledge of Los Grobo and the strategic discipline of the Vinci Partners Group led to a rapid and efficient creation of Grupo Los Grobo’s business platform in Brazil, which already had an impressive background due to its strong identity and successful business opportunities integration. In that context, Grupo Los Grobo achieved: (I) The acquisition in July 2008 of 35% of Ceagro, an input and grain commercialization company, which operated in the states of Maranhão, Piauí and Tocantins; (II) the acquisition in December 2008 of the origination assets of Sementes Selecta, a seeds company located in the states of Goiás and Minas Gerais; (III) in January 2010, an integration of Ceagro with two origination assets of Sementes Selecta. All together, they created one single business platform in Brazil, thus combining operations there and in other countries.
Focus on the strategic evaluation of efficient capital allocation and risk management processes
We have a long experience and a deep knowledge of the agricultural sector and of production processes, as well as a proficiency in financial management. Moreover, we understand that our strict risk management policy, which has its guidelines elaborated by our Administration, together with our analysis on risk adjustments on the return on invested capital according to region and activity, which allow for quick and assertive decision making processes, reduce those risks related to commodities prices and exchange, credit and climate.
For instance, in order to reduce climatic risks, we hire agricultural insurances to protect our own production. Thus, we offer the possibility of identifying market trends and attractive business opportunities within our activities and taking advantage of favourable conditions, keeping focus on efficient capital allocation, financial discipline and the implementation of the right policies and methodologies, which allow for the best management practices regarding an acceptable risks in terms of the return on invested capital and result maximization.
Experienced management in Agribusiness, result-oriented and alliance seeking with strategic financial partners
We combine a business and financial experienced vision focused on results and a deep knowledge of agribusiness. Our Management Team is integrated by market executives who have excelled in agribusiness, due to their qualifications and their alignment to our interests and culture. Its performance is based mainly in a strategic vision of market trends and a financial discipline in terms of risk management and financial costs evaluation with regards to result maximization.
Moreover, the presence of investment funds managed by Vinci Partners, of the Grobocopatel family, which has a 25 year experience in agricultural production in Latin America, and whose company Los Grobo has received plenty of important awards and certificates, such as the National Quality Price in Argentina, the ISO 9001 certificate for their production process and has been case study by the Harvard Business School (see here >), and of some of other main shareholders has contributed to our expansion and consolidation, has given us access to relevant resources for the performance of our activities, as well as a financial and managerial experience focused on results and business valorization, essential for a growth strategy. Thus, we are far well positioned for identifying business opportunities relevant for our activity, for elaborating an adequate performance strategy and for executing it within favorable conditions.