Our Business

 

Over the course of 2010, Abengoa Bioenergy further cemented its standing as one of the leading producers of biofuels in Europe (397 Mgal - 1,500 ML- of annual production capacity), the United States (380 Mgal - 1,440 ML-) and Brazil (53 Mgal - 200 ML-), affording the company a total installed capacity of 830 Mgal - 3,140 ML.

Bioethanol prices decreased over the first half of the year due to lower demand for gasoline and slumping crude oil prices. Yet prices rallied sharply over the second half of the year on the back of strong demand for bioethanol, coupled with reduced imports from third party countries, with the increase amounting to as much as 25 % at year-end in comparison to the market prices seen at the start of the period.

Moreover, gasoline, crude oil and sugar, the commodities associated with bioethanol, all experienced rapid growth, with projections for next year far outstripping those for 2010.

In Brazil, the ethanol market is largely driven by local supply and demand, with a small volume earmarked for exports and no imports whatsoever. As a result, demand is chiefly influenced by the demand of ethanol-powered vehicles for hydrated ethanol. The ethanol consumption of this fleet and of vehicles that use gasoline mixed with anhydrous ethanol exceeds domestic production, which is directly driving up prices to new highs. Forecasts for this market are also promising and lend further credence to the idea that sales of flex-fuel cars will continue to climb at existing rates over the coming years. To meet this demand, Brazil is facing the major challenge of having to commission 25 production plants in the short to medium term.

The corporate mission of Abengoa Bioenergy is to engage in the following activities with a view to reaping the greatest returns for its stakeholders, industry and society at large:

• To contribute to the sustainable development of the vehicle fuels market and the bio-based chemicals products market by utilizing renewable energy (biofuels) and environmentally friendly technologies that reduce carbon emissions.
• To develop innovative technological solutions through continuous investment in research and development, resulting in more efficient production processes and distinctive and high-value feed coproducts.
• To create value for our shareholders.
• To contribute to the professional and personal development of our employees by providing continuous training, and by establishing and monitoring individualized goals and development plans.

From this platform, Abengoa Bioenergy works on a daily basis to accomplish the following objectives:

• To be recognized as a world-wide leader in the production and commercialization of bioethanol from bio-renewable resources.
• To be recognized as a world leader in research and development, known for technological innovation in the conversion of biomass to bioethanol.
• To provide a superior work environment in order to attract the best possible employees and to maintain excellence in operations.
• To attract the interest and respect of the financial community by means of sustained growth and technological innovation.

In order to reach these lofty targets while honoring the principles of integrity and ethics, Abengoa Bioenergy is guided by the following core values:

• Honesty in relationships with clients, shareholders, associates and co-workers.
• Respect for all people under all circumstances. Focus on teamwork by utilizing corporate tools that favor the sharing of information.
• Promote flexibility and mental attitude necessary to adapt to continuous change.
• Protection, defense and improvement of the environment.

The company’s activities can be grouped into six main areas:

• Procurement of raw materials.
• Bioethanol origination.
• Production.
• Commercialization of bioethanol, DGS (distiller’s grains and solubles) and sugar.
• Electricity cogeneration. New technologies.

Abengoa Bioenergy, with operations in five countries on three different continents, currently owns thirteen plants for producing bioethanol and other process-related coproducts, along with a biodiesel production plant, distributed as follows:

• Europe: Spain, France and the Netherlands.
• North America: United States.
• South America: Brazil.

 These plants cater to the demands of global bioethanol markets from practically any corner of the world. Most sales stem from current producer countries, in addition to Sweden and South Asia.

Abengoa Bioenergy seeks out growth by attempting to consolidate operations in all business areas, investing continuously in technology with a view to streamlining production and sales processes, and developing new biofuel and coproduct production technologies, thus enabling the company to employ sustainable raw materials and curb greenhouse gas (GHG) emissions.

The company operates with the utmost respect for best industrial practices. It has also been striving for many years to obtain sustainable raw materials and produce sustainable products, with sustainability constituting the main cornerstone of its business. This commitment to the environment is finally beginning to seep through to society, and governments from most countries are now addressing this overriding concern through legislative change.

The prevailing environment in which all companies currently operate is defined by constant flux and change, which is forcing companies to step up their competitive efforts in order to ensure further development. In order to set itself apart from the crowd, Abengoa Bioenergy is focusing on converting this competitive drive into one of the key parameters for guaranteeing innovation, flexibility and reactivity at all times, and this is reflected in the company’s strategic plan.

Competency-based management, Abengoa Bioenergy’s chosen management model, mirrors the company’s need to generate markedly competitive value and advantages through people, a competitive edge that is truly difficult to imitate. The company’s employees are therefore one of the most important assets underpinning its market dominance, thereby making talent attraction, creation and retention a key priority. All selection and recruitment processes, whether internal or external, are rooted in this model.

With this in mind, Abengoa Bioenergy views training as a systematic and continuous process through which to hone, enrich, strengthen and adapt the conceptual, attitudinal and procedural skills and competencies of its employees. Competency-based management sees training as a means of improving the technical and generic skills of people in the workplace by improving their knowledge, developing aptitudes and skills and enhancing capacities. In order to perform at optimum levels, companies must roll out constant training initiatives and refresher courses. With this in mind, Abengoa Bioenergy is investing heavily in staff training within the different required areas.

It is also worth noting that Abengoa Bioenergy engages in these management processes while continuously upholding human and labor rights and respecting freedom of association. The company fully recognizes the right to collective bargaining, and strives to eliminate all forms of forced and obligatory labor, abolish child labor and, lastly, eliminate all kinds of discrimination with the utmost respect for employment. Abengoa Bioenergy shapes its working practices to reflect the United Nations Universal Declaration of Human Rights, associated protocols and other international treaties and agreements on social rights, and likewise ensures that the conduct of its employees reflects these commitments.

Abengoa Bioenergy is fully aware of the importance of all stakeholders to its business and growth. For this reason, the company not only offers them continuous, transparent and accurate information on its business activities, but also attempts to encourage dialogue with all of them through different channels of communication tailored to their unique characteristics, while also developing new channels as a response to what must be a dynamic and enriching process for all parties involved.

The main stakeholders of Abengoa Bioenergy are its employees, customers, suppliers, shareholders and the community at large. All their expectations are mirrored in the course of business and in the company’s strategic plan, which addresses the trends and challenges of the sector and reflects the company’s path towards sustainable development and the fight against climate change. The plan defines the risks and opportunities associated with each of Abengoa Bioenergy’s products and services throughout all of its territories and markets, as well as the projected results. It explores the impact sustainability can have on the company, based on the information provided by market reports and internal reports.

Abengoa Bioenergy attaches great importance to communication with customers and their privacy. Its unflinching commitment to providing excellent service is one aspect the company considers of paramount importance. It has therefore set up direct channels of communication between its technical and sales departments and customers, the aim being to forge a closer relationship and address any comments or suggestions its customers may have.

The management systems in place have highlighted the need to implement mechanisms to gauge customer satisfaction and analyze their needs and expectations. The company therefore periodically conducts satisfaction surveys, which are managed by the plants’ quality assurance departments. This analysis ultimately leads to specific objectives and action plans to cover expectations and improve levels of satisfaction.

Abengoa Bioenergy adheres to Abengoa criteria and systems when it comes to customer privacy. Abengoa guarantees the validity, integrity and security of all the information it handles, particularly the personal data of its customers. In order to ensure suitable security measures relating to communications and information systems, there is a security policy statement that extends to all Abengoa companies and organizations. This statement provides information on the implementation of an Information Security Management System as a means of attaining the security objectives, with security encompassing confidentiality, integrity and availability.

The main objective for 2011 and successive years is to continue performing and improving on all areas of business, while pursuing best practices in terms of risk management and process efficiency and making sustainability an absolute priority.

A key objective will be to consolidate production and sales. The company’s global presence will also enable it to harness arbitrage opportunities that are sure to arise between different markets. In 2011, Abengoa Bioenergy will continue to focus on quality, measured in terms of sustainability, ahead of quantity. Every effort will be made to improve the sustainability of all production assets, and similarly to consolidate operations at the latest plants to have been commissioned and continue construction on a second generation bioethanol plant in the United States.