2. DIVERSIFIED BUSINESSES
2.2.1 Alcoholes del Uruguay S.A. (ALUR S.A.)
It is a close corporation where the main shareholder is Administración Nacional de Combustibles, Alcoholes y Portland (ANCAP, National Administration of Fuels, Alcohols and Portland Cement) which holds 90.79% of the total issued shares and the remaining 9.21% belongs to PDVSA Uruguay S.A.
Currently, it is the main producer of biofuels, sugar and protein meal in Uruguay. It has five industrial enterprises: Complejo Agroindustrial Ing. Mones Quintela in Bella Unión (production of bioethanol, sugar, electric power and animal feed), Microdistillery in Artigas (production of hydrated alcohol), Planta Bioetanol Paysandú Fase II (production of bioethanol and animal feed), Planta de Biodiesel Paso de la Arena (production of biodiesel, glycerin and protein meal), as well as Planta de Biodiesel Capurro (production of biodiesel and glycerin) and offices and storages in Polo Industrial y Tecnológico Capurro.
It has accumulated experience in the management of agro-industrial chains in which it works and it is the only current supplier of biodiesel and bioethanol for ANCAP, thus guaranteeing that the mixture required by Law 18,195 can be achieved for gasoil and petrol, respectively.
Achieved goals:
- Once again, we were able to increase the production of biofuels with a total of 129 millions of liters by the end of the year, which is more than the 40% compared to 2014.
- The mix of biofuels with petroleum products allowed us to cut down 255,000 tons of carbon dioxide (CO2) emitted to the atmosphere, which is equivalent to the amount of greenhouse emissions released by almost 75,000 vehicles during one year.
- The Paysandú Bioethanol Plant started operating, with an investment of 150 million dollars on schedule and within budget, beginning production in March 2015.
- The Grain Milling Plant of Paso de la Arena started operating on the part of COUSA in agreement with ALUR. These two investments permitted the increase in the installation capacity of biofuels and animal feed
- We could increase the sales of protein meal without affecting the operation of industrial plants and without generating losses.
- We were able to decrease the sale price of biofuels to ANCAP by a 25%. The operational net income calculated in Uruguayan pesos increased 42% with respect to 2014 (16% calculated in dollars at the closing exchange rate), achieving an EBITDA (discount of the result in addition to amortization, lost VAT and amortization of biological assets) of 34 million dollars and broadly exceeding the goal, with a net result that exceeded 2 million dollars.
- Regarding gross income calculated in dollars, a 72% corresponds to biofuels, 16% to the animal feed market, 8% to the sugar market and the remaining 4% to other products like glycerin, cements, electric power, supplies to producers, etc.
- We gad a good safety performance, with no serious accidents and Frequency Index below 32 (IF 28).
2016 Main Goals and Projects
To reduce the costs of biofuels that are acquired by ANCAP maintaining the level of activity, achieving for 2016 an budget lower than that of 2015. In this regard, we will continue with the implementation of actions for costs reduction in all the areas of the company
We will implement, in agreement with the shareholders, a plan that allows the financial restructuring of the short-term liabilities, and the improvement of the financial ratios damaged by the debt incurred by the construction of the Paysandú Bioethanol Plant.
We will have to resolve the issue of the cost overrun from non-deductible VAT for bioethanol, which generates a tax burden higher than that of fossil fuels for the ANCAP group.
We will aim at diversifying the production and sale of different products including biofuels for captive fleets and exports, and sub-products for export. We must aim at recovering the lost sales in the sugar market.
We will aim at enabling and/or carrying out a series of initiatives and projects, like self-generating wind power in Paysandú and the CO2 Plant in Paysandú, in agreement with third parties.
Economic and financial goals will be established, so that they enable the sustainability of operations and they are aligned to the strategy defined by the shareholders.
