Alcohol is the main renewable product for sustaining the world energy matrix. The use of world oil reserves at a faster rate than its accumulation sets a short time limit for its availability as a source of energy, in the proportions in which it has been used.
Brazil is at the epicenter of an energy revolution that involves the entire planet. In 2005, the Brazilian ethanol market generated revenues of 6 billion dollars. In 2010, it should reach 15 billion. All this without taking into account the global demand, in which countries like the United States, Japan and now China participate, which intends to mix 10% of ethanol in all the gasoline used in the country. The use of alcohol between flex fuel, blending fuel with gasoline and export should exceed 25 billion liters in four years.
The Brazilian competitive advantage is the result of the high productivity of the crop. A perfect combination of climate, territorial extension and water reserves allow each hectare of sugarcane planted in Brazil to produce 6,800 liters of alcohol. Compared to the USA, which produces ethanol from corn, the yield is less than half that of Brazil: 3,200 liters.
In addition to the natural advantages, Brazil already has experience in the production of alcohol as an energy resource since the 70's. At that time, the production of alcohol was encouraged by the government, with the objective of mixing it with gasoline, to reduce imports of Petroleum. The National Alcohol Program, or Proálcool, was born.
The movement arose from the initiative of some businessmen, who developed a work and presented it to the government. Photosynthesis as an energy source, this was the project developed in 1973 by the companies Usina da Barra, Nova América, Santa Elisa and Zanini SA, led by their shareholders Maurílio Biagi, Orlando Ometto, Renato Barbosa and Cícero Junqueira Franco, sponsored by Associgás. This project was presented to the government in the same year, and later forwarded to General Araken de Oliveira, in April 1974.
The great luck for the implementation of Proálcool was the presence of General Ernesto Geisel in the Presidency of the Republic. He completely mastered the subject, as he had experience with Petrobras. Therefore, supported by the president of Petrobras at the time, Shigeaki Ueki, he created Proálcool, which began with the mixture of anhydrous alcohol with gasoline in 1975. Other leaders, such as Minister Ângelo Calmon de Sá, participated in the first Proálcool projects implemented by our family: Santa Elisa, Usina da Pedra and Vale do Rosário.
In 1978, the alcohol car appears. Eight years later, 76% of the national fleet of vehicles produced was fueled by alcohol, and alcohol production reached a peak of 12.3 billion liters. However, in the same year, the international scenario of the oil market changed. Crude oil prices plummeted and consequently subsidies for the use of alternative energy became scarce. The price paid to ethanol producers was low and production stabilized, unlike the demand for fuel, which reached 95% of cars sold in the country.
Even with the fall of Proálcool, ethanol, along with biodiesel, has reappeared in the energy scenario as an excellent alternative for the future. In the case of alcohol, only the demand for Flex cars will stimulate an increase in production.
Today, our family participates in an alcohol trading company with activities in Brazil and abroad, Crystalsev. We set up terminals in Santos for both sugar and alcohol for export, and we installed an alcohol dehydrator in El Salvador, with the intention of exporting to the US. We are also participating in the assembly of a sugar refinery in Syria, which will serve the countries in that region.
We made an action plan until 2020 that aims to expand alcohol to meet domestic and export demand. There are six new projects, and each one aims to crush around five million tons of cane per harvest, in São Paulo, Minas Gerais, Goiás and Mato Grosso do Sul. In 84 years of work, the companies were fully professionalized. In 2007, we expect to make the IPO of Santa Elisa (public offering), which is today the main company of the family.
Luiz Lacerda Biagi is a business leader in several segments such as capital goods, the food industry, among others. However, it is in the sugar-alcohol industry that Luiz built a history that began since the implementation of the Próálcool Program, in 1974.