Strategy

Tonon Group overall objectives are to achieve sustainable and profitable growth, improve the efficiency of its operations and build on the Company’s competitive strengths in order to expand the market position and increase profitability and market share in the Brazilian and international ethanol and sugar markets.

The key elements of the Group business strategy include:

Expand the harvesting area and increase the crushing capacity of the Company’s units.

We intend to increase the harvest area of its mills and also increase the crushing capacity of the mills. The plan to achieve this expansion is by planting more sugarcane in existing leased and used agricultural properties, thereby increasing the sugarcane crushing capacity and improving the operational costs through scale synergies. Simultaneously, Tonon intends to utilize its increased harvesting area and crushing capacity to increase the supply of biomass.

Maximize the operational performance of our units.

Tonon Bioenergia intends to increase the sugarcane crushing capacity of its mills. Tonon Bioenergia believes its crop is, and will continue to be, younger than most of its peers. Further, we intend to increase the sugarcane productivity through intensive crop care, enhancing varieties of sugarcane we plant and the use of adequate herbicides.

Strengthen relationships with third-party suppliers.

The intention is to continue our long-term relationship with our suppliers by renewing these supply agreements so that the Company continues to be less dependent on finding new third-party suppliers. Further, Tonon Bioenergia believes its strong financial profile strengthens our relationships with existing suppliers and attracts potential new suppliers located near the Company’s units.

Optimize capital structure by diversifying the sources of financing.

The Company plans to optimize its capital structure by diversifying the sources of financing.

Focus on environmental and social awareness.

Tonon Bioenergia is committed to being an environmentally and socially conscious Company. It continually seeks new ways to improve our performance in sustainable ways. For example, the Company has a human resources and sustainability committee dedicated to our environmental sustainability. The officers responsible for human resources and sustainability report directly to our CEO. Furthermore, Tonon Bioenergia complies with all environmental requirements for the export of the Company’s products to Europe and the United States.

Continue to elevate Tonon Bioenergia’s standards of corporate governance and maintain excellence in management.

Tonon Bioenergia intends to continue improving its corporate governance standards. In addition, the Company intends to maintain its current high standards of operational, financial and personnel management by (i) maintaining a low cost structure and (ii) continuing to engage highly-regarded advisory service providers.