Agribusiness

RaulPadilla
CEO,BungeGlobalAgribusinessandBungeProductLines September23,2010

BungeInvestorDay

StrongGrowthTrajectory g j y
Agribusiness EBIT 1,2 US$ millions Agribusiness Volume 1 Millions of metric tons

949 856 820 114 335 118 120

100

2006

2007

2008

2009

2006

2007

2008

2009

1 Agribusiness EBIT and volumes include Sugar which became a separate segment in Q1 2010 2 Refer to the appendix at the back of the presentation for further information on Total segment EBIT
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DemandGrowthShouldRemainStrong g
Growth in World Demand for Grains and Oilseeds
900
2.7%

800 700 600 Millio tons on 500 400 300

CAGR
2.9%

2.8%

1.6%

200 100 0 All Uses

Source: LMC

Food 1990s 2000s

Feed 2010s 2020s

Fuel
2

AsIncomeGrows,DietsContainMoreVegetableOil andMoreProtein and More Protein

World Per Capita Edible Vegetable Oil Consumption (kg) World Per Capita Meat Consumption (kg)
U.S. = 119 U.S. = 36

34 25

Potential

19 17 14

Potential

India = 13

1998/99
Source: Bunge analysis

2004/05

2009/10

1985

2010
3

WhiteMeatIsReplacingRedMeat p g
World Per Capita Meat Consumption Per Class (kg)

34 25
9 5 11 15 8

11

1985

2010

Beef
Source: Bunge analysis

Poultry

Pork
4

China:MajorFactorBehindDemand j
World Soybean Imports by Destination (mmt)

52

25 19 16 3 1998/99
EU
Source: Bunge analysis

18

19

19

17

2004/05
Others China

2009/10

StructuralChangeAffectsFeedFormulation g
China Hog Rations of Structural Groups
350 300 KG pe Head er 250 150 100 50 0 Per rcent 200

Share of China's Pork Production from Structural Groups

100 90 80 70 60 50 40 30 20 10 0

Backyard
Hog production per year (heads):

Specialized Household
50-1,000

Commercial
> 1,000

< 50

1985
Backyard

1995

2005

2015
Commercial

Fodder

Soybean Meal

Corn

Specialized Household

China growth in soybean meal demand and corn also being driven by commercialization of meat industry Government concern about disease control has accelerated this shift
Source: Bunge analysis
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TheAmericasHaveCapturedtheGrowthand SuppliedtheWorld Supplied the World

134 World Soybean Production ( (mmt) ) 75
22 48

Export

Domestic 91 89
40

56
53 16 40 15

30

86

67
32 59 35 51 15 14

North America

South America

China

North America

South America

China

North America

South America

China

1998/99
Source: Bunge analysis

2004/05

2009/10
7

BlackSeaSupplyingGrowthinGrainDemand pp y g
Wheat Exports (mmt)

107 92
Others

80
8 12 15

13 13 10 16

32 4 19 14

Black Sea South America European Union Australia A t li North America

38

39

36

1998/99
Source: Bunge analysis

2004/05

2009/10
8

FeedFormulationsAffectedbyIngredient Supply&Cost Supply & Cost

Change In EU Formulation: High vs. Low Wheat Year
250

Feed formulas consist of ratios of carbohydrate, protein and fat A i l producers strive f Animal d t i for optimum balance between efficiency and cost
Soybean Meal Other Protein Meals

+3
200 150 100 50

(2)

MMT

In periods of tight supply and high cost, producers substitute ingredients to meet specification EU drought in 2007 impacted local wheat and rapeseed crops p p As a result, producers used more corn and soybean meal
Corn contains less protein than wheat, so higher utilization of h t hi h tili ti f corn leads to higher inclusion of soybean meal

+7

Coarse Grains Wheat

(11)

05-06

Change Ch

07-08

To be a year-round dependable supplier and to mitigate risk, it is important year round to be in a variety of crops and regions
Source: Bunge analysis
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WellPositionedandBalancedGlobalNetwork
Oilseed Processing Capacity
Asia
Soy

Bunges Global Reach

Europe
Soy Rapeseed Sunseed

7% 23% 33%

North America
Soy, Canola y,

38% %

South America
Soy, Cottonseed

Silos: S North America: 76 South America: 74 Europe: 14

Port terminals: North America: 4 South America: 18 Europe: 3 Asia: 1

Includes wholly owned, leased, joint venture and toll facilities. Ports include certain transshipment facilities on rivers. Map reflects countries of operation with assets and/or commercial offices.

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Global,Integrated,CoordinatedChainisEssential g
Agribusiness Chain
Food & Ingredients

Farmer
Soy y Corn Wheat Sorghum Barley Canola Rapeseed Sunseed Flaxseed

Grain Origination O i i ti
Storing Blending Drying Financing

Logistics
Rail R il Truck Barge Ocean vessel

Basic Processing P i
Soybean Rapeseed Canola Sunseed Specialty seeds

Sales & Distribution

Raw material Protein meal Vegetable oil Financial se ces services

Refining, Value Added & Packaging

Edible oils Margarine Mayonnaise Corn & wheat products

Risk Management

Value creation shifts along the chain

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MarketsBecomingIncreasinglyComplex; RiskManagementParametersMultiplying Risk Management Parameters Multiplying

Bunge Global Agribusiness

Macro outlook Supply / Demand Energy and convergence FX Ocean freight Government regulations Global capacity Emerging origins / destinations risk Fund capital flows Commodity price volatility Customer preferences

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Conclusions
Strong demand growth in coming decades from food food, feed and fuel; China will continue to be a major driver Key production areas will be Black Sea for grains and softseeds, South America for soy and Southeast Asia for palm The world will become even more dependent on global trade of agricultural products

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BungeAgribusinessStrategicFocus g g g
Strengthen core businesses
Optimize oilseed value chain and build share in growth markets - Areas of focus: Asia, Americas Expand share of global grain trade - Areas of focus: Black Sea, North America

Expand into adjacent businesses

Enter new products (palm, rice) Enter new geographies (Asia, MENA) Extend value chains (feedmilling)

Enhance operational effectiveness

Industrial Logistics Risk management Safety
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Thankyou.

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Backup:NonGAAPReconciliationNotes p
Total segment earnings before interest and tax Total T t l segment earnings before interest and tax (EBIT) is Bunges consolidated net income that t i b f i t t dt i B lid t d t i th t excludes interest income and expense and income tax attributable to each segment. Total segment EBIT is a non-GAAP financial measure and is not intended to replace net income attributable to Bunge, the most directly comparable GAAP financial measure Total segment EBIT Bunge measure. is an operating performance measure used by Bunges management to evaluate its segments operating activities. Bunges management believes EBIT is a useful measure of its segments operating profitability, since the measure reflects equity in earnings of affiliates and noncontrolling interest and excludes income tax Income tax is excluded as management believes income tax is tax. not material to the operating performance of its segments. In addition interest income and expense have become less meaningful to the segments operating activities. Total segment EBIT is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to net income attributable to Bunge or any other measure of consolidated operating results under U.S. GAAP.

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