January 26, 2010 The Sweet Taste of Success

Volume 13 | Issue 1

Santal has been supplying sugar cane growers with some of the most advanced planting, harvesting and transporting equipment since it was fou

For more than 30 years, the Brazilian government has promoted the use of ethanol made from sugar cane as a sustainable, alternative fuel for motor vehicles. During that time, the country’s sugar cane farming industry has grown tremendously to supply the raw material that is now present in all gasoline used by light vehicles in Brazil.

A lot of that growth came thanks to the increasingly mechanized nature of the industry. Companies such as Santal, based in Ribeirão Preto, in Sao Paulo state’s industrial heartland, have sold farmers the kind of machinery they needed to boost productivity. Santal has been successful right from the start because of its deep knowledge of the sector.

“Our main advantage is that here we know very well the problems that farmers want to solve,” said Luis Pinto, Santal’s chairman. “The company was founded specifically to promote agricultural mechanization, before anyone really talked about it in Brazil. That gives us a lot of practical experience in this market.”

Much of the company’s intimate knowledge of the market came from ownership, until 10 years ago, of a sugar cane mill; the Pinto family still owns the sugar cane farms. The experience gained from the farm’s operation helped Santal develop products including its sugar cane harvesters, planters, and the transport vehicles that boosted productivity by increasing the amount of time the harvesters can work in the field.

The company’s harvesters are its main product, and Santal has spent decades making better, more efficient, longer-lasting versions of this basic piece of equipment. In the 1970s Santal introduced the chopper-harvester to Brazil, an innovation that greatly increased the amount of cane that could be harvested by one machine.

At the time harvesters collected whole stalks of cane, making their loading and transport more costly and time consuming. The chopper-harvester takes the full stalks and cuts them into 20 centimeter pieces, permitting much more cane to be carried in the transport vehicles.

Santal’s latest model of harvester, the TANDEM II, incorporates several improvements over the current state-of-the-art machine, including a four-wheel-rear drive. The four-wheel- rear drive offers a series of advantages over conventional two-rear-wheel drives, and especially over the much-used metallic tracks models.

“This is the only sugar cane harvester in the world, I think, that uses four-wheel-rear drive,” explained Pinto. “That permits it to have much greater stability and better traction than harvesters with two rear wheels, without incurring in the high maintenance costs of metallic tracks. This means the tires wear out less, provide fuel economy, make the harvester faster and lighter, so it has significant advantages.”

Santal also makes special tipping, fast unload transfer vehicles that work in the fields, shuttling between harvesters and the big trucks that wait to carry loads to the mill, maximizing their useful time. These transfer vehicles travel side by side with the harvester, being loaded with the chopped sugar cane until they’re full, then quickly replaced with an empty vehicle and driven off the field to elevate and dump their load into the waiting trucks. A harvester typically works with four transport vehicles, so when sales of harvesters increase, demand for the transport vehicles also increase.

Another important piece of equipment to complete the machine lineup is the sugar cane planter; along its 50 years story, Santal developed and sold several types of mechanical planters, from a simple whole-stalk planter, and up to a complete 14-ton two-row billet planter, the Santal PCP 2L.

EXPANDING CAPACITY
Santal is currently planning to expand its production capacity to meet an expected increase in demand for harvesters, planters, and transport vehicles. The company expects to invest around $8-$10 million to expand the size of its plant and to buy equipment. The total size of the investment hasn’t been determined yet because Santal’s executives want to see how the market develops.

This year the plant will probably make about 50 harvesters, a limited number because of the switch to making the new model, and, altogether, will produce more than 1,000 pieces of additional equipment. In 2011 harvester production at Santal should double and within a few years should reach 300 harvesters per year. There are currently 3,000 to 4,000 harvesters operating throughout Brazil, and that figure should reach 5,000 to 6,000 by 2015, Pinto said.

“We’re going to be able to more or less triple our production capacity from now,” said Pinto. “The market should grow to about 1000 harvesters per year and each harvester needs four transport vehicles. The Brazilian market is growing because there are various projects to increase our capacity of production of alcohol and sugar from sugar cane.”

The factory expansion will be in production modules measuring about 1,000 square meters (10,764 square feet) each, and the initial expansion will probably include three modules, though that figure can be easily increased or decreased based on demand. The company has ample land around its plant to add the extra modules as needed.

The expansion plans are ambitious because, in addition to expansion in Brazil, the company foresees increasing demand from foreign markets in which governments are starting to encourage greater use of renewable fuel sources and trying to copy Brazil’s success in boosting the use of gasoline mixed with ethanol.

EXPORTS SEEN GROWING
Exports have always been an important part of Santal’s sales, though this year they probably will only be 5 percent to 10 percent of total revenue because of the economic crisis affecting so many countries. The company already has a global sales presence and plans to be ready when demand in foreign markets recovers.

“Exports are ready to expand again because sugar cane production is becoming more mechanized, and new markets are opening up, in Africa for example,” said Pinto. “The demand for these machines is going to increase, but it takes a while to start this up, to plant the cane, to build the factories, so we expect an increase in coming years.”

Santal sells equipment in nearby countries such as Bolivia and Colombia, and also throughout Central America and the Caribbean. The company also sells to African countries including Mozambique, Cote d’Ivoire, Burundi, Zambia, Sudan, and expects sales on that continent to increase as part of the greater interest in renewable fuels. Asian countries are increasing their investment in sugar cane production, and sales to Thailand and Indonesia should also increase in the next few years, Pinto said.

The company’s production isn’t limited to sugar cane equipment. Santal also makes transport vehicles for both grain and peanut growers, and produces other machinery for peanut farmers as well.

Santal sells most of its products directly to the user, and also has a series of dealers that work on commission to make sales. That closeness to clients, compared to bigger competitors who often sell through distributers, helps keep the company on top of market developments. Santal also offers technical assistance directly from its factory, which also helps to better understand the client’s needs and problems.

“Right now Brazil is the biggest market for mechanized sugar cane equipment,” Pinto said. “The Brazilian market is already enormous, and it keeps growing. This year Brazil will produce over 700 millions tons of sugar cane.”

As production around the world grows, Santal’s specialization in the sugar cane market should help keep it a step or two ahead of competitors and expanding for years to come.

Subscribe to Industry Today