JALL3

Jalles Machado S.A. is a Brazilian sugar-energy company with publicly traded common shares listed on B3 under the ticker JALL3. Its origins date back to the 1980s in Goianésia (GO), when the Cooperativa dos Produtores de Cana de Goianésia Ltda. (Cooperálcool) was created in 1980, followed in the same year by the incorporation of the distillery Goianésia Álcool S.A. At the turn of the 1990s, Goianésia Álcool began to concentrate industrial and agricultural management, integrating the entire sugarcane and derivatives production chain. In 1993, with the inauguration of the crystal sugar plant, the company adopted the name Jalles Machado S.A. Açúcar e Álcool, in honor of Otávio Lage, and launched the Itajá sugar brand. From the mid-1990s and throughout the 2000s, the company began exporting sugar, obtained quality certifications, inaugurated a cogeneration plant for electricity from sugarcane bagasse, and started producing organic sugar, consolidating an integrated profile across agricultural, industrial and power generation activities.

Throughout its history, Jalles Machado has expanded its industrial park and agricultural base, building a vertically integrated business model. The company controls all the sugarcane used in its units, with 100% of the cane sourced from its own fields operated under agricultural partnership contracts with a typical six‑year cycle, in which it assumes soil preparation, planting, crop care, harvesting, transshipment and transport. Agricultural operations are fully mechanized, with automated planters and irrigation systems in critical areas, aiming at productivity and mitigation of supply risk. This structure supports the production of sugar, ethanol and by‑products, and also provides flexibility in the production mix between sugar and ethanol according to market conditions for commodities and higher value‑added products.

The main operating activities are concentrated in two segments: Sugar, Ethanol and derivatives from the sugarcane agro‑industrial process (the AED segment in Goiás and Minas Gerais) and Electric Power. The AED segment accounts for about 95% of net operating revenue, with the production of white sugar, VHP sugar, organic sugar, anhydrous ethanol, hydrous and organic ethanol, cleaning products, yeast derivatives, soybeans (in a crop rotation logic), CBIOs and other related sales such as sugarcane bagasse and La Terre branded products. Jalles Machado operates with significant exposure to products internally classified as non‑commodities, which include, among others, organic sugar, organic ethanol, cleaning products and yeast derivatives, which have represented a relevant share of gross revenue in recent fiscal years. The stated strategy is to increase the share of higher value‑added items, reducing dependence on white sugar and ethanol as pure commodities.

On the product front, the company stands out in the production of organic sugar under its own brand certified by Instituto Biodinâmico (IBD) and other international labels, with sales focused mainly on the foreign market. Itajá organic sugar is exported to a diversified base of countries, including Germany, Australia, Canada, China, the United States, France, the Netherlands, Switzerland and other markets in Europe, North America, Asia and Oceania, positioning the company as one of the global leaders in this niche. In white and VHP sugar, production is sold both in the domestic market – in 1 kg, 2 kg and 5 kg packages, bags and in bulk – and abroad, with VHP sugar reaching destinations such as the United States, Switzerland and the United Kingdom, especially after the sugar unit in Santa Vitória came online. The company has also developed a line of branded organic consumer products, including capsule coffee, light organic sugar, powdered chocolate drink and cookies.

In ethanol production, Jalles Machado manufactures anhydrous ethanol, used in gasoline blends, hydrous ethanol, consumed directly in flex‑fuel vehicles, and organic ethanol, destined for the pharmaceutical, beverage, cosmetics, oxo-chemical and food industries. The industrial process follows the typical stages of the sugar‑energy sector, with fermentation of sugarcane juice, centrifugation, distillation and, in the case of anhydrous ethanol, additional dehydration. The ethanol produced is stored in large‑capacity tanks and sold according to demand from fuel distributors. From its ethanol production, the company also generates CBIOs under the RenovaBio program, after certification by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), monetizing decarbonization credits traded on B3 based on invoices for biofuels sold.

The portfolio also includes cleaning products and yeast derivatives, which add value to the production chain. Cleaning products, produced mainly from the company’s own anhydrous ethanol, include liquid alcohol, alcohol gel, household cleaning products, professional‑use items and disinfectants, sold under brands such as Itajá and Allgel. Manufacturing involves tanks, mixers, filling and labeling, and is subject to oversight by the National Health Surveillance Agency (ANVISA) and local health surveillance authorities. Yeast derivatives are obtained from the surplus of the alcoholic fermentation process, converted into dry yeast and autolyzed products with high protein content and B‑complex vitamins, used as inputs in feed for poultry, swine, cattle, fish, shrimp, horses and companion animals, serving both the domestic market and exports of specific types such as hydrolyzed and autolyzed yeasts.

Jalles Machado’s industrial infrastructure consists of three units: the main Jalles Machado unit (UJM), in operation since the early 1980s in Goianésia (GO); the Otávio Lage unit (UOL), also in Goianésia, inaugurated in 2011; and the Santa Vitória unit (USV), located in Santa Vitória (MG), acquired in 2022 after having been originally developed by Dow Chemical in partnership with Mitsui. Together, the three plants have a crushing capacity of around 9.0 million tons of cane per harvest, with average harvesting radii of around 20 to 24 km, which helps reduce cutting, transshipment and transport costs. The units have significant storage capacity for sugar and ethanol, allowing them to store products for sale during the off‑season, when historically higher prices are observed.

In electric power, the company operates a cogeneration model using sugarcane bagasse as fuel in high‑pressure boilers. The power generated supplies the plants’ own consumption, and the surplus is sold through contracts in the Regulated Contracting Environment and the free market, as well as via equity interests in cogeneration companies. The UJM, UOL and USV units have combined installed capacity of approximately 174.5 MW, enough, in theory, to supply a medium‑sized city. Part of this capacity is allocated to special purpose entities such as Albioma Esplanada Energia S.A. and Albioma Codora Energia S.A., in which Jalles Machado holds minority interests, in addition to Jalles Bioenergia S.A., which is wholly controlled. The company also sells carbon credits resulting from the replacement of fossil fuels with biomass and develops biogas/biomethane projects in partnership with investors in the renewable energy sector.

From a regulatory standpoint, Jalles Machado’s activities require a broad set of licenses and authorizations from municipal, state and federal agencies. The production of sugar and ethanol, as well as electricity cogeneration, is subject to authorizations from city governments, state environmental departments, water resources agencies such as ANA and DAEE, IBAMA, SEMAD in Goiás, and sector regulators such as ANEEL and ANP. The manufacture and sale of cleaning products depend on registrations and inspections by ANVISA and local health surveillance bodies, while the Ministry of Agriculture, Livestock and Food Supply (MAPA) oversees aspects related to agricultural and industrial production. The company reports that it holds the licenses and permits required for its agro‑industrial operations, which are considered valid or in the process of renewal, with a focus on environmental compliance, rational use of natural resources and practices associated with sustainable development.

In terms of corporate governance and capital markets, Jalles Machado carried out an initial public offering of shares in 2021, joining B3’s Novo Mercado segment, which includes companies with high governance standards. The company uses debt and securitization instruments, such as debentures and Agribusiness Receivables Certificates (CRAs), to finance expansion, renewal of sugarcane fields, and storage and biofuel production projects. Between 2015 and 2025, it tapped the capital markets on several occasions, including debenture issues directed specifically at investments in the maintenance, renewal and improvement of sugarcane fields for future ethanol production. The corporate and capital structure is complemented by strategic partnerships in cogeneration and biomethane, reinforcing its profile as an integrated company in the sugar‑energy chain, with exposure both to the domestic market and to international trade in organic sugar, ethanol and biomass‑based energy.