Market and Operations

THE COFFEE MARKET

THE COFFEE MARKET

A competitive and captivating market

Coffee was once responsible for approximately 75% of all Brazilian export. Nowadays, due to the large diversification and to the opening to the external market, this percentage is never higher than 2.5%. Some might analyze this piece of information and say that this product has lost its internal economic importance; that, however, would be a big mistake. Coffee cultivation is responsible for the income of over 5 million Brazilians, binding them to the land and helping reduce rural exodus. Thus, this product is not only responsible for providing income and profit, but it also plays a large social role in the development of the country.

Among the many variables that make up and influence the coffee market, the most significant one is the variation in product price. Crop volume, climatic and geographic factors, the fluctuation of exchange rates and fierce competition directly influence the final price of the bag. Consider that at the start of its operation, UNICAFÉ used to sell its product for US$117.00 per bag. Since then, the bag has reached peak prices of almost three times that amount in more than one occasion. It is, therefore, not surprising that the coffee market is considered one of the most volatile markets.

As such, having an operational structure that is able to follow all the peculiarities of this closely fought after market is essential. Not only does UNICAFÉ have this structure but it also has something that sets it apart from its competitors: passion for the business, dedication and professionalism. This very passion has enabled us to overcome all obstacles and to achieve, in the last 5 years, the expressive benchmark of 2 million bags/year exported to over 40 countries worldwide.

Technology servicing quality

Year after year, UNICAFÉ has invested in technology for the production sector of its exports. This is, in fact, fundamental for the success of the operation, from planting, grading and processing the beans to the moment when the product is packaged for shipping. We are equipped with and routinely use state-of-the-art technologies and techniques in this company.

NEW BUSINESSES

UNICAFÉ has branched out with new commercial operation besides coffee export in the past 20 years.

NEW BUSINESSES

The acquisition of two great estates in the states of Espírito Santo and Minas Gerais has empowered us to reach new goals and new horizons.

The Galiléia Estate, in Espírito Santo, houses approximately 1.8 million coffee plants. In the areas where coffee growing is not recommended, there are over 700 thousand eucalyptus trees which are part of a large national preserve.

In the state of Minas Gerais, the company has gone even further to diversify. We are part of the beef cattle raising business and have even gone as far as to take part in exhibitions and we have received awards for the purebred livestock presented.


DERRIBADINHA ESTATE

The Derribadinha Estate is located in the town of Carlos Chagas, in the northeast portion of the state of Minas Gerais. It is right next to the city of Nanuque, and it is made up of over 8.6 hectares of area and more than 6.700 hectares of pasture.

Carlos Chagas was, for many years, considered the Beef Capital in Minas Gerais. This stimulated the growth of livestock activity in the area which was largely due to the area´s optimal weather and to its fertile lands.

This estate is a benchmark in the commercialization of beef cattle, boasting stud females from Reproductive Pure Origin Nellore and from the Montana Tropical Compound.

We house, at our estate, a yearly average of 3,500 Pure Origin Nellore and Montana Tropical Compound stud females.

The Nellore breed is considered Pure Origin; it is the predominant breed in Brazil and today it makes up approximately 80% of the livestock herd in the country. It is currently used as a base breed for the breeding of beef cattle in Brazil. The Nellore breed has RGN/RGD (Genealogic/Definitive Registry) which is issued by the ABCZ (Brazilian Zebu Breeders Association).

The Montana Tropical Compound has CEIP (Special Certificate of Identification and Production), which is issued by the Ministry of Agriculture, Livestock and Supply. The CEIP seal ensures the origin, productivity and genetic potential of the animal; that is, it guarantees that every bull is among the 26.5% best bulls of that season.

This genetic assessment has a certificate which is issued by USP Pirassununga in São Paulo.

The Montana Tropical Compound is currently the owner of the largest genetic bank in the world, where the genes of the most outstanding bulls among more than 37 different breeds, obtained from 943 different bulls in 4 different countries can be found.

UNICAFÉ belongs to the Brazilian Association of Humped Indian Cattle Breeders, to the Capixaba Association of Nellore Breeders of Espírito Santo, which has over 22,000 associates, and to the ACCN – Capixaba Association of Nellore Breeders of Espírito Santo.

The ACCN (Capixaba Association of Nellore Breeders) promotes the EXPOINEL-ES (International Nellore Expo in Espírito Santo), which in turn organizes and supports the Livestock Symposiums and the CCPB (Capixaba Congress of Bovine Livestock in Espírito Santo).


GALILÉIA ESTATE

The Galiléia Estate is in the Alto Mutum Preto District in the Baixo Guandu municipality, in the state of Espírito Santo.

This estate has over 392 hectares of eucalyptus plantations, approximately 193 hectares of Arabica coffee and 134 hectares of Robusta coffee with 79 hectares of irrigated Robusta coffee.

Baixo Gandu is considered the 27th municipality in the state and it was the first in the country to have fluoridated water (1953). This area also plays a large role in mineral extraction (granite) both for the internal and the international market, which receives the bulk of its products.

The Galiléia estate is topographically irregular and while that may not favor the raising of livestock, it allows for the region´s agriculture to flourish.

The Galiléia estate operates with the collaboration of over 60 resident workers and approximately 132 temporary workers during the coffee harvest season.

As a way to better serve our employees and to improve the estate´s conditions, several improvements have been made in this estate. We have prioritized health care and offer ambulatory health care on site, as well as health insurance for our employees and employee housing with running water, electricity and sewage system. There is also an elementary school (1st to 4th grade) on site, a soccer field to encourage sport practices and we have partnerships for discounts on medication and training, among others.

The commercialization of eucalyptus is a product diversification strategy that seeks to make better use of the land while still respecting available resources, as the estate has over 81 hectares of Permanent Preservation Areas.

Furthermore, the commercialization of eucalyptus meets the internal market´s demands, supplying raw material to the Cellulose Pulp Mills and Factories in the vicinity, as well as to Sawmills.

The Galileia estate also yields Arabica and Robusta coffee, with about 326 hectares of planted area, as well as 79 hectares of irrigated Robusta coffee.

This way, the entire coffee production is characterized by the quality of the coffee beans, which allows it to meet the demands of the local internal market.