One of Brazil’s leading sugar producers focuses on efficiency. Reuben Ford finds out how investing in zero waste pushes up performance figures.
Pitangueiras Açucar e Álcool Ltda (Pitangueiras) produces raw sugar and ethanol. Recently listed in Brazilian industry magazine Exame’s 1,000 biggest companies, Pitangueiras is among the country’s top 300 agribusinesses.
The company’s main products range from various strains of raw sugar and alcohol, but recent investment in re-use of bi-products, including technology and processes is opening new markets.
Pitangueiras’ director, João Henrique de Andrade explains: “Useful products such as dry yeast, animal food and fuel for energy production are ‘accidents’ of sugar and alcohol production. Thanks to exploitation of these bi-products we have a 91 percent industrial efficiency rate.”
In the erratic agricultural industry, the products have not only stabilized its market position but boosted growth.
Straight from the Bottle
Pitangueiras’ arrival at this favorable product mix comes after 38 years of experience in sugar cane farming.
Back in 1975, under a different name, the company manufactured cachaça; sweet liquor produced from sugar cane. Milling 1,000 tons of cane a day, the family-run business was a success.
By 1984, with the father and son team at its head, the distillery had adopted the name of its municipality ‘Pitangueiras’ in São Paulo and become an important part of local industry.
Changes in agriculture and markets inspired expansion in 2000. Pitangueiras turned its attentions to sugar. The company was experienced in sugar cane farming and production of raw sugar, and burning the bagaço to produce energy was a natural step.
“From 2001, sugar gave our company a major boost. It increased the production of energy in our plant and our overall production capacity,” Andrade explains.
Today Pitangueiras’ 540,000-square-meter plant employs 1,100 staff (1,750 during harvest), producing 10,000 50-kilogram bags of sugar and 600,000 liters of alcohol a day. It plays an important role in the regional industry and is the third biggest of 42 partner mills of the cooperative Copersucar.
As a part of the biggest Brazilian trader of sugar and ethanol and biggest exporter of these products, Pitangueiras has access to the main markets worldwide.
Pitangueiras’ achievements reflect commitment and experience. “Improvement and innovation are always on our agenda,” Andrade says.
In 2006, the company initiated investment in good practice and industry standards certifications: “The preparations for ISO: 9000 sparked important developments for Pitangueiras – we entered a period of intense investment in technology, processes and training,” Andrade confirms.
High pressure furnaces (for energy generation) and centrifugal machines, diffusion cells and milling machines (used in the production of raw sugar from the cane stalks) are among the new technology brought to the plant. “We have purchased sugar cane crushers with four, five and six rollers to improve productivity,” Andrade says. With the increasingly competitive sugar industry racing toward electronic machines for harvesting and production, Pitangueiras is keen to stay ahead.
Automation of existing processes, previously done by hand not only brought the company up to international standards, but surpassed expectations. In 2012, just five months after receiving the ISO: 9000, Pitangueiras was also awarded the ISO:22000.
Andrade explains in more detail: “Our energy, enthusiasm and investment in quality, infrastructure, practices, operations and technology pushed us beyond our original objectives. The result is a modern, efficient and above industry standard facility with a production capacity of 30,000 50-kilogram bags of sugar and 570 liters of alcohol a day.”
He quotes maximum capacity figures, which have earned the mid-size mill industry recognition. In 2012, Revista Dinheiro (Money Magazine) placed Pitangueiras fifth in its ranking of the most financially sustainable agribusinesses.
“Our main product is sugar – around 75 percent of revenue comes from VHP (Very High Polarization) sugar and crystal sugar. Hydrated alcohol production accounts for the remaining 25 percent,” Andrade says. Pitangueiras produces raw sugar. Around 90 percent of production is crystal sugar.
The increase in technological resources at the plant has also introduced new products: Dry yeast, a natural bi-product in alcohol production is dried and stressed to produce a protein mix and bagaço (the pressed cane stalk waste) can be hydrolyzed for animal feed.
Sugar cane harvesting also provides Pitangueiras with abundant biomass resources. Bagaço is currently burned to generate between 15 and 16 megawatts of energy to power the plant.
While investing in its São Paulo facility, Pitangueiras is also expanding operations. Andrade describes the company’s project in Minas Gerais state: “We started work for the ISO certificate, and grew fast, attracting attention for our achievements. In 2007 we agreed a joint venture with an agricultural company and in 2009 opened a second factory in Minas Gerais.”
Despite Pitangueiras’ success, Andrade points out that it has not lost its family business culture. “We are still run and managed by the original owners – we keep our hands on the numbers and our feet firmly on the ground.”
The strategy works. Pitangueiras’ growing resources are producing impressive numbers: annual growth increases by 10 to 15 percent and 2012 revenue hit $135 million.
Andrade attributes Pitangueiras’ position to “constantly striving towards total industrial efficiency (currently 91 percent) and combination of technical, qualified knowledge and Brazilian market experience.”
Depending on market tendencies and prices, Pitangueiras divides production of sugar variations (which are classified according to color and composition) and even changes the sugar/alcohol production proportion. “We need to be flexible; harvests depend on variables such as the weather and economic turns, so we adjust accordingly,” he affirms.
Since joining Copersucar in 2011, Pitangueiras joins 41 other producers who share stable support for all links of the sugar and ethanol chain, from follow-up of the harvest in the field to the end markets, including the storage, transport and commercialization stages.
As more turn to Brazil’s growing sugar and ethanol industry, the challenges of fluctuating prices, lack of government support and climate changes threaten survival. “Big companies burst into the market with 20 mills, but do not have the experience to succeed in the industry,” Andrade says.
Aiming high in all aspects of its business has pushed Pitangueiras to the top. “We are a family business. Our focus is on secure performance, cost and energy efficiency,” Andrade concludes.
The result: More than sufficient resources for long-term success in the market.