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The Industry - Background
     1 - Sugarcane: The Economic Cycle

Five centuries ago, sugar was worth almost as much as gold throughout Europe, because its production was limited to quantities that couldn’t meet the demand. That made growing sugarcane a very profitable enterprise, which couldn’t be pursued in Europe primarily because of inadequate climate conditions.

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     2 - The original “Engenhos”

“Engenhos”, or sugar mills, were run much like sugar factories. Their infrastructure included the “Big House”, which served as residence for the Lord of the operation, his family and servants; the Chapel, for Christian religious celebrations: the “Senzala”, where slaves were kept; and the “Engenho” itself, composed of different structures dedicated to various phases of sugar production.

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     3 - Decline in the 19th Century

By the 1800s, Brazil, once the world’s biggest sugar producer, fell to fifth spot with only 8% of world production. With the end of the “Coffee Cycle” in the 20th Century, there was a resumption of sugarcane cultivation to produce sugar for the internal market. The states of São Paulo and Rio de Janeiro became main suppliers for Southern Brazil, bringing about a decline for the sector in the Northeast.

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     4 - A clean, renewable fuel

In 1975, the Brazilian government launched its National Alcohol Program, known as Proálcool, which diversified the output of the sugar industry. Significant investments were made, with support from the World Bank, to allow for the expansion of areas cultivated with sugarcane and the introduction of ethanol distilleries. Amid the worldwide petroleum crisis, the experience helped reduce Brazil’s vulnerability and increase energy security.

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     5 - Flex-Fuel: pure ethanol or mixed with gasoline

Falling demand for hydrated ethanol (E100) was compensated by an increase in the use of anhydrous ethanol mixed with gasoline, thanks to the expansion of Brazil’s light vehicle fleet. By then, in 25 years of large scale use of ethanol, Brazil had developed engine technologies and distribution logistics that were unprecedented in the world. The network of fueling stations in which pure ethanol could be purchased reached 28 thousand.

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     6 - Sugarcane today

As of late 2007, sugarcane fields occupied about 7.8 million hectares in Brazil, or about 2% of all arable lands available in the country. This makes Brazil the number one producer of sugarcane in the world, followed by India, Thailand and Australia. Main production region are South-Central Brazil, where close to 90% of overall production is concentrated, and the Northeast, which accounts for the remainder. There are two harvests per year, which allows Brazil to produce sugar and ethanol year round for both the internal market and for export.

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