Wednesday, July 30, 2008

In August, Petrobras will complete the tests and kick-off production at two other plants, one in Montes Claros (Minas Gerais) and another in Quixadá (Ceará), which have the same production capacity as the Candeias plant. Together, investments in the three plants add up to R$295 million, which will generate work and income for 55,000 family farmers who were hired to supply the raw materials. The inauguration of this plant, in Candeias, is a milestone in Petrobras` history and boosts the Company`s participation in the biodiesel productive chain, which is already consolidated in the fuel distribution area.

Candeias biofuel plant

Petrobras` plant in Candeias has characteristics that set it aside from the other biodiesel-producing units thus far installed in Brazil. The main features are a fully automated instrumentation and control system, the flexibility in raw materials that can be used in the productive process, and a crude vegetable oil processing system.

The automation system is formed by 3,700 points that control and monitor 1,200 process variables and 250 plant motors. These control and automation mechanisms ensure the quality of the fuel the unit produces.

The volumes of biodiesel that will be processed and marketed will be monitored in real time, from the time they are put on the truck that transports the raw materials, going through the fuel manufacturing stages, and, finally to the departure of the vehicle loaded with the final product.

This detailed follow-up procedure will allow the development of a database to contain the entire operation history. The process may be audited at any time, with a very elevated level of reliability, and the information can be sent simultaneously to Petrobras` headquarters, in Rio de Janeiro. The unit also has redundant systems, i.e., plant maintenance will be carried out without operation shutdowns, a fact that will ensure a high level of performance insofar as its capacity and the quality of the biodiesel are concerned.

To encourage family farmers to participate as input suppliers, Petrobras installed a crude vegetable oil processing system at its plant. The Company can purchase crude oil straight from family farmers and pre-treat it at the unit, and turn it into refined oil.

Another feature that differentiates this plant is its great operating autonomy due to the large tanking capacity, not only for raw materials, but for finished and intermediary products as well. The raw material storage park has eight tanks, for a total storage capacity of 14,000 m3, equivalent to 90 days of continuous operations, 24 hours per day.

Encouraging family farming

Petrobras` biodiesel plant can operate with vegetable inputs (castor, sunflower, and cotton seeds and soybean, etc.), animal input (bovine, swine, or chicken fat) or residual oil and fat used to fry food.

For the unit to operate, 58% of the total value of the inputs will be purchased from family farmers, enough to obtain the Social Fuel Seal. Granted by the Ministry of Agrarian Development (MAD) to biodiesel plants, the Seal ensures fiscal benefits for producing units which, in this region, purchase at least 50% of the total value of their raw materials from family farmers.

Thus far, 28,922 farmers located in 264 towns in Bahia and Sergipe are planting oleaginous plants to supply the plant. Farmers in both states plant sunflowers, but in Bahia, they are also planting castor seeds.

Of the total farmers who have been benefited, 25,639 are in Bahia, spread throughout 215 towns, while the others (3,283) are in 49 towns in Sergipe. All of them have ties with family farmer cooperatives or associations.

Of these crops, it is estimated the farmers will be able to harvest and supply Petrobras with 48,800 tons of grains this year, 30,600 tons of which of castor seeds and 18,200 of sunflower seeds. It is also estimated that family farmers will also produce 1,000 tons of dende oil.

Additionally, Petrobras is purchasing residual oil and fat derived from food-frying processes, as well as poultry and fish viscus from urban collecting cooperatives and non-governmental organizations. In total, 10.300 liters of these inputs were purchased for this unit. The company purchases soybean oil, cotton oil, and cattle fat from major agribusiness suppliers. Some 6,000 tons of soybean, cotton, and dende oil, in addition to 2,000 tons of cattle fat have been purchased.

Technical assistance and seed supply

To ensure more productivity, Petrobras provided 205.2 tons of castor and sunflower seeds certified by the Brazilian Agricultural Research Corporation (Embrapa) to farmers in Bahia and Sergipe. Of this total, 110.7 tons were of castor seeds (only to Bahia) and 94.5 tons of sunflower seeds (Bahia and Sergipe).

Petrobras has also hired technical assistance and rural extension companies to guide the farmers during the planting and harvesting procedures. In Bahia, the work is done by the Empresa Baiana de Desenvolvimento Agrícola (EBDA), while in Sergipe, by the Empresa de Desenvolvimento Agropecuário do Sergipe (Emdagro).

The city of Candeias was ed to receive Petrobras` biodiesel unit because of its weather conditions, soil, logistics infrastructure, agricultural potential, for having labor available, and for the market that is favorable for this type of activity. In addition to being near the areas that supply raw materials, the plant is but a few kilometers away from fuel distribution bases and has extensive road, rail, and maritime transportation availability.

A total of 1,301 direct jobs were created during the construction of the Candeias plant. Of these, 1,229 workers were from Bahia, 863 of whom from Candeias itself. The investment made in plant construction was R$101 million.

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