Usina Caeté’s Marituba plant in the Northeast of Brazil has been turning its sugarcane into a whole lot more than sweetener. Fabrizzio Tenório talks with Lee Weingast about how a fine blend of technology and social and environmental practices have allowed this company three decades of growth and success as a producer of ethanol, electricity and, of course, sugar.
Growing sugarcane in Alagoas, the most arid region of Brazil, is no mean feat. But sugarcane is the raw material that Usina Caeté’s Marituba plant transforms into ethanol, sugar and electricity. For the first decade of its existence, harsh conditions made survival difficult and growth all but impossible. Of course, mere survival was not good enough for this company, part of the Carlos Lyra Group, and when the Salvador Lyra dam was built on the Marituba River in the 1990s, Marituba took advantage of the water resources that it brought. Marituba harnessed this precious moisture with the installation of modern linear irrigation systems for its sugarcane fields. This efficient irrigation led to dramatic increases in sugarcane yields and in turn, production and enabled the company to stay afloat. In effect, this dam opened the gates for the company to stay in business and even flourish. The Carlos Lyra Group was not deterred by the challenges of investing in an agriculture-based business in a remote and arid region of Brazil. Fabrizzio Tenório, Marituba’s agricultural engineer, calls the dam, “the heart of the company.” He boasts that now, after 30 years, the company is profitable and operating on par or better than similar companies in regions with more favorable climates, saying that “Marituba survived before the dam and is now a much better company.”
QUENCHING THIRSTY CROPS
It’s Tenório’s job to ensure that every drop of water and ray of sunlight is put to use to create ideal growth conditions for the company’s cane crop. He keeps his finger on the pulse of the rainfall and weather patterns of Brazil’s dry Northeast region and has seen the benefits of efficient irrigation. Currently, nearly 80 percent of all water used for irrigation of Marituba’s cane fields comes from the dam and the improvement is notable: The 2007-2008 harvest yielded an average of 80 tons of sugarcane per hectare while prior to the irrigation with the dam’s water, each hectare only gave 50 tons of cane. Tenório says that the dam was crucial to the survival of the company and is pleased to report that Marituba is now doing very well.
Of course, the construction of the Salvador Lyra dam was a major boon to Marituba, but it was the company’s intelligent use of cutting-edge technology and techniques that gave the company a real boost. Tenório asserts that the company uses the most modern tools and techniques to produce improved cane varieties. The company also carefully manages all agricultural practices. Each year, specialists analyze the harvest and take steps, including adjusting the variety of plants for the climate and soil conditions, to ensure increased yields the following year.
The cane cultivation process is not the only streamlined area at Marituba. Tenório explains that the company’s management is deliberately kept to a slim minimum number of people. The toplevel streamlining process was part of a reorganization begun in the year 2001 in order to facilitate maximum efficiency. A total of 60 employees oversee all company business from vehicle maintenance to sales to production and administration. They also manage and coordinate the nearly 1,200 seasonal employees that Marituba takes on at harvest time.
Brazil has earned recognition for its outstanding progress in efficient production and use of ethanol as an alternative fuel. Caeté’s Marituba plant plays a role in the country’s success in this area as it transforms sugarcane into anhydrous alcohol, or ethanol, as well as very high polarity (VHP) sugar and electricity. Marituba’s superb results are evidence of leadership’s efforts to facilitate ongoing improvement. Technology implemented by Marituba has actually increased the longevity of the cane fields, allowing for more harvests from a single planting. The 2007-2008 and 2008-2009 harvests yielded 1,225,000 tons of sugarcane. This was a significant increase over the 2006-2007 harvest, which yielded 930,000 tons. In fact, the amount of raw material harvested during the peak of sugar content exceeded Marituba’s capacity so a portion of the sugarcane pressing was outsourced. Tenório explains that outsourcing allowed Marituba to take advantage of the excellent harvest and increased earnings. Tenório reports that the company plans to invest in new equipment to increase its capacity to process sugarcane. Also in the works is an investment to finish its São Paulo facilities.
Marituba is an important player in the Brazilian economy both on the local and global levels. Marituba’s rigid standards of quality have fostered a solid client base in Brazil and around the world. All the sugar produced at the Marituba plant is destined for export and is sold directly to buyers in Europe, the United States and Asia by the sales department at the Caeté headquarters. Part of the electricity produced from the cane bagasse is used by Marituba to power its plant while the remainder is sold to a local dealer, and pulses through the Alagoas power grid.
Marituba’s high standards for quality apply not only to its products, but also to its relationship to the natural environment. The company makes a point of aligning its practices to rigorous environmental standards and Tenório boasts that, after a series of in-depth audits and inspections, Marituba was the first company in the world to earn an official seal created in England for companies that adhere to strict socio-environmental norms. “This,” he explains, “gives us preferred status in the English market.” Tenório underscores that since 1979, 35 percent of Marituba’s land holding is virgin forest. Although the company had permission to deforest the land, it has chosen to maintain the forests. “Now,” Tenório relays, “we are reaping the benefits of this outlook.” This conservation-minded practice is very appealing to the European market.
SPREADING THE WEALTH
Tenório is proud of Marituba’s policy of sharing its success with small-scale farmers in the very poor and dry region in which it operates. Last year the company supplemented its own sugarcane with another 567,000 tons purchased from some 1,000 local growers, most of whom produced and supplied 500 tons of cane or less. Tenório says that the income earned by these small-scale family farmers who sell to Marituba makes a big difference to many families and allows them to have a decent quality of life. He points out that sharing the wealth in this way is not common in the sector but that Marituba makes a point of operating in this fair and socially conscious manner. Tenório reports that the company has decided to maintain this practice of working with local growers despite the fact that it would be easier and even less costly to work with a single large-scale grower. This practice reflects Marituba’s values and belief that social good can and should come out of its business.
The future for this company that transforms a sweet, green grass into such valuable products as sugar, ethanol and electricity is fertile. Tenório reports that Marituba will continue striving to achieve constant growth and will maintain its active concern for socio-environmental issues. In fact, given the fact that Marituba is currently working beyond its maximum capacity for processing sugarcane, it seems that growth is imminent.