Jalles Machado S.A. (“Jalles Machado” or the “company”) is a sugar/ethanol producer in Brazil operating two mills, Jalles Machado and Otavio Lage in the State of Goiás in Brazil. The company has a crushing capacity of 4.6 million tons/year of sugarcane and operates over 65.4 thousand hectares of land under cultivation for sugar cane. During FY17, the company produced 187.7 thousand tons of sugar (conventional and organic), 67,300 m3/year of anhydrous ethanol and 134,400 m3/year of hydrous ethanol and generated 279,389 MWh electricity through cogeneration.The proposed investment will support the company’s investment program to (i) plant 20,646 ha of sugarcane, including 3,000 ha of planting expansion, (ii) install a white sugar processing plant at the Otavio Lage mill with capacity of 750 tons of sugar per day, and (iii) irrigation of 3,500 ha which includes fertigation using vinasse. The latter will consist of subsurface drip (250 ha) and pivot irrigation (3,250 ha).
Expected Development Impact
(i) Support the expansion of a globally competitive sector: The investment will support the development of Brazil's sugar and ethanol industry, one of the most important sectors in the Brazilian economy, by helping one of the leading companies to improve efficiencies and upgrade its operations. (ii) Promote climate change mitigation: The project will support climate change mitigation by increasing efficient production of biofuels. Hydrous ethanol made from sugarcane is the most competitive CO2 alternative to gasoline and one of the "greenest" fuels. (iii) Strengthen a frontier region: The Company's operations are located in Goianesia, part of the Cerrado region, where the project will be undertaken. By expanding the company's activities, the project will create about a 100 new jobs and contribute to government revenues in a region that is highly dependent on the agricultural sector for income generation but has lagged behind national averages in terms of development indicators. (iv) Contribute to government revenues: The Brazilian agribusiness sector is highly competitive globally and is key to the economy in terms of its capacity to raise government revenues. This investment will allow the Company to expand its operations and will contribute to the growth of the Brazilian economy.
IFC's Expected Role and Additionality
(i) Long-term Financing: IFC's involvement will provide the Company with the necessary financing for its capital expenditures which is not otherwise available in the market on comparable terms. (ii) Mobilization: IFC will mobilize additional long-term capital from a commercial bank through the B-Loan program, expanding the Company's access to finance further. (iii) Environmental and Social Standards: By introducing the Performance Standards on Social and Environmental Sustainability, IFC will help Jalles Machado further improve its sustainability practices. (iv) Corporate Governance: IFC will help Jalles Machado strengthen its Corporate Governance policies and practices by implementing the Corporate Governance Improvement Plan.
IFC is considering a financing package of an A-Loan of up to US$34 million.
For Inquiries About the Project:
Jalles Machado S.A.
Rodrigo Penna de Siqueira
Chief Financial Officer
+55 (62) 3389-9000
Rodovia GO 080 Km 75,1 – Fazenda São Pedro s/n – Zona Rural – Goianésia – GO – CEP. 76.388-899 - Bra
For Inquiries and Comments About IFC:
General IFC Inquiries
2121 Pennsylvania Avenue, NW
Washington DC 20433
Local Access for Project Documentation:
Contact Person: Rodrigo Penna de Siqueira
Company Name: Jalles Machado S.A.
Address: Rodovia GO 080 Km 75,1 – Fazenda São Pedro s/n – Zona Rural – Goianésia – GO – CEP. 76.388-899 - Brasil
Phone: +55 (62) 3389-9000
Facsimile: +55 (62) 3389-9099
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