Agribusiness is now an important ally against COVID-19 in Brazil

November 23, 2021

By Bruna Sandrini and Shirley Emerick

Goianésia is a small agricultural town in the countryside of the state of Goiás, with 71 thousand residents. The basis of its economy was once the plantation of rice and coffee, and then it diversified into milk production. Nowadays, it is an ethanol and sugar hub in Brazil. During the Covid-19 pandemic, Goianésia played a prominent role in providing the country with two key items to protect the population from the new coronavirus: rubbing alcohol and hand sanitizer.

The production of the sanitizing products came from Jalles Machado, a, agribusiness company founded in 1983 and responsible for more than 3.700 direct jobs in the region. In 2020, amidst the outbreak of the pandemic in Brazil, Jalles Machado received a $27.5 million loan from IFC to increase their production of sanitizers and thus meet the strong demand for rubbing alcohol in the regions of Goiás and São Paulo. The loan was part of IFC's $8 billion fast-track program to mitigate the impacts of the COVID-19 pandemic.

“We quickly doubled our production, investing in machines, ensuring new jobs, and optimizing processes to operate 24 hours a day, seven days a week. We contacted IFC to help us with the financing, as we see them as a reliable partner that offers good terms and competitive costs, as well as support with experience and knowledge”, says Otávio Lage de Siqueira Filho, CEO of Jalles Machado.

Otávio Lage Production Unit.
Otávio Lage Production Unit. Photo by: Jalles Machado

The sanitizing unit sold more than 3.4 million boxes of rubbing alcohol and hand sanitizers to hospitals, public agencies, and businesses in 2020, recording a 78% growth in sales from 2019. Despite demand pressure and limited supply in the market, the company decided to maintain the initial consumer price of the inputs, making a crucial contribution during a period of economic and health crisis in the country. “Agribusiness is an important sector of the Brazilian economy, and IFC's investment in Jalles Machado was key to give the company a relevant role during the pandemic,” says Luiz Daniel de Campos, Principal Investment Officer, Agribusiness Department, IFC Brazil.

Jalles Machado also supported the local community with donations. The Organização das Voluntárias de Goiás (OVG) - Goiás Volunteer Organization, in English - was one of the entities chosen by the company. To reinforce social assistance and reach the 246 municipalities in the state, including quilombola communities, OVG launched a campaign to combat the propagation of the pandemic. OVG’s donation baskets for vulnerable families in Goiás included rubbing alcohol and hand sanitizers from Jalles Machado, which were also important to protect the 4.900 volunteers and 500 employees who did not stop working during the crisis. “Jalles Machado was already involved with our volunteer work and, when it became evident that our activity was even more necessary, the company collaborated with the donation of sanitizing products, especially at a time when it was difficult to find them on the market”, explains Jeane de Cássia Abdala, OVG's Director of Social Actions.

Jalles Machado's hand sanitizer was sold to hospitals, public agencies and businesses, and donated to local communities.
Jalles Machado's hand sanitizer was sold to hospitals, public agencies and businesses, and donated to local communities. Photo by: OVG

For the residents of Goianésia, Jalles Machado's impact started long before the pandemic. 176 km away from the capital Goiânia, the city is now proud of being a prominent sugar and ethanol hub in the center of the state. However, until the 1980s, the few jobs available in livestock were not enough to accommodate all the workers from Goianésia. “The industries were installed in the capital and the countryside was left with no option for development. Our desire was to create good jobs right here”, says Otávio Lage Filho.

In 1975, the federal government created the Proálcool (National Alcohol Program) to stimulate sugarcane-based production and reduce dependence on oil. Jalles Machado then opened its doors as a small alcohol distillery and, in the 1990s, begun to produce sugar, taking advantage of the national demand and the international market prices. Currently, the company produces ethanol, sugar, electricity (using sugarcane bagasse), sanitizing products and high added value products such as organic products and dry yeast. The company has two production units (including a distribution center) and 60.000 hectares of sugarcane plantations. In the 2020/2021 harvest, Jalles Machado registered a record 5.3 million tons of processed sugarcane.

In 2017, the company signed its first project with IFC, in a $55 million long-term financing ($30 million from IFC's own account and $25 million mobilized with Rabobank and ABN Amro). Encouraged by the appreciation of sugar in the Brazilian market, Jalles Machado invested in modern equipment, new technologies, expansion of its irrigation system and sugarcane plantations, in addition to completing the construction of their sugar processing plant. The partnership was fundamental to implement some improvements in areas such as occupational safety and corporate management, in addition to preparing for an IPO, which took place in March 2021 at the Brazilian Stock Market, raising BRL 741.5 million.

One of the main points that Jalles Machado focused on was developing gender equality by creating jobs for women in the operation of machines and tractors and in the harvesting and planting at night. The numbers show that there is still a long way to go, but the female presence in the 2020/2021 harvest reached 20.1 percent among employees - one of the highest rates in the sector -, with 26.7 percent of them in management positions.

The female participation rate at Jalles Machado reached 20.1% in the 2020/21 harvest. Photo by: Jalles Machado

Anny Paiva, 34, is part of this new generation of female leaders at Jalles Machado. Hired in 2017, she was responsible for structuring the company's logistics sector, taking over freight management, portfolio and cost indicators monitoring and customer satisfaction. In 2020, Anny was invited to take over the management of the Distribution and Storage Center (CDA, for its initial in Portuguese) of the Jalles Machado Unit and Otávio Lage Unit. Anny is now leading a team of 296 employees.

Acting in a mostly male-dominated sector, such as logistics, does not bring her any fears. Not even in an agribusiness company: “Here at Jalles Machado there is a lot of freedom of expression and employee appreciation. It's common to see that the leadership team respects our opinions and has a high level of trust,” she adds.

Anny is doing her part to create more opportunities for women on the team, seeking technology and development for her employees. At the CDA in the Otávio Lage Unit, the female participation rate reached 36 percent among assistants, operators, coordinators, and managers. This way, the company can attract labor supply from the city, mainly from women. "In addition to supporting the growth of the agribusiness and renewable energy sectors, IFC's investment in Jalles Machado is also intended to encourage improvements in the social sustainability standards of the country's sugar and ethanol industry," adds Luiz Daniel, from IFC.

Published in November 2021