The sugar-based energy industry is facing a special moment. It appears we have overcome the main consequences of the global economic crisis that led us to intensify the consolidation process of companies and resulted in more equilibrium when making investment decisions. Unre-strained euphoria eased, although we have innumerous rea-sons for upholding our optimism concerning the outlook for the industry, given the market potential for sugar, ethanol, energy co-generation and the chemical industry.

We could well state that “from the mill gate inwards” we have achieved outstanding productivity and efficiency levels, with a high degree of social, environmental and economic sustainability that continues to positively develop. There is absolutely no doubt about the world’s acceptance of the product as a true environmental asset, although for solely environmental reasons we still face obstacles to its consumption in the planet’s main consumer regions.

This highly promising scenario, however, does not allow us to lie back in the fulfillment of our strategic objectives. To increase production and open new markets, generating better opportunities for economic development, income and jobs, with business profitability compatible with incurred risks, is a chal-lenge to be pursued with much effort.

Production units have achieved excellent efficiency levels, but some aspects must be considered to improve the production chain and increase its competitiveness. Essentially, the issues of logistics and access to mar-kets must be viewed as priorities. Although the govern-ment may, and in fact has, attempted to play this important role concerning these issues, it is up to private initiative to undertake most concrete actions to reach its objectives in such issues.

Many promising initiatives can be observed in this respect. Associations of companies that perform in different segments of the production chain are apparently appropriate and may be expanded, such as a concrete partnership via shareholding participation of companies of the oil business in production units, allowing them better access to the distribution system, as well as the participation of foreign capital that in future may provide easier access to potential foreign markets.

By the same token, traditional foreign trade companies participating directly in production may also result in better conditions for selling domestically and abroad, due to their experience in logistics and currently used price protection instruments, as well as differentiated access to financing sources for foreign trade at more adequate interest rates for the industry.

The reduction in the cost of commercial transactions done by these partnerships will provide a huge competitive differential to the groups that will thus be organized. Strategic partnerships in the storage, transportation and port terminal logistics system are already well in progress and may be expanded with support in financing at compatible interest rates.

Transportation by road has proven inefficient and expensive, making it necessary to implement an adequate pipeline system and better utilization of transportation by river. Actually, none of this is new to the industry, because concrete initiatives in this regard can clearly be seen. How-ever, what is needed is to expand such initiatives by implementing good projects, for which there certainly will be adequate financing, given that they are viable because of their importance for altering the market structure still prevalent today.

Strategic partnerships may also be the solution for the issue of co-generation of electric energy from sugarcane bagasse, as well as for agricultural and industrial research, providing us plant varieties more adequate for special circumstances, new products such as “diesel” from sugarcane, green plastic and new industrial and agricultural technologies, including cellulosic ethanol.

Actually, the potential for novelties in the production of derivates from sugarcane, a product known for centuries, whose market and production chain is growing incessantly, is impressive and gets better all the time, creating new opportunities for business and sustainable development. Many such initiatives, as commented above, diminish the price volatility of ethanol and sugar, a problem that will concern investors as long as sales instruments under development, such as trading companies and contracts in the BM&F (Brazilian Mercantile and Futures Exchange), are not consolidated.

More flexibility in alternating the product mix between sugar and ethanol is also welcome, because the markets of the two products are equally important and must be adequately supplied to. Therefore, it is incomprehensive, albeit acceptable to start up operations, that a production unit focuses exclusively on the production of ethanol and misses out on possible opportunities in the sugar market.

Obviously there is still the issue of public policy initiatives, indispensable in the strategic energy market, which is characterized as an issue related to security and national sovereignty. Here too, one must consider the importance of private initiative and government, an essential partnership for meeting one’s objectives, which fortunately has been occurring in recent years. We have followed the right track. The future is abso-lutely promising.