JALL3 Jalles Machado

Jalles Machado S.A. is a Brazilian company in the sugar and energy sector, publicly traded with 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 that same year by the establishment of the Goianésia Álcool S.A. distillery. At the turn of the 1990s, Goianésia Álcool began to centralize industrial and agricultural management, integrating the entire production chain of sugarcane and its derivatives. 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 started exporting sugar, obtained quality certifications, inaugurated a cogeneration plant for electric power from sugarcane bagasse, and began producing organic sugar, consolidating an integrated profile across agricultural, industrial, and power generation activities.

Over its history, Jalles Machado has expanded its industrial facilities and agricultural base, building a vertically integrated business model. The company controls all sugarcane production used in its units, with 100% proprietary cane fields operated through agricultural partnership contracts with a typical six‑year cycle, under which it is responsible for soil preparation, planting, crop treatment, harvesting, transshipment, and transportation. The agricultural operation is fully mechanized, using automated planters and irrigation systems in critical areas to improve productivity and mitigate supply risks. This structure supports the production of sugar, ethanol, and derivatives, and also allows 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, hydrated and organic ethanol, cleaning products, yeast derivatives, soybeans (within a crop rotation strategy), CBIOs, and other related sales, such as sugarcane bagasse and La Terre brand products. Jalles Machado has significant exposure to products internally classified as non‑commodities, which include, among others, organic sugar, organic ethanol, cleaning products, and yeast derivatives, and these 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.

In terms of products, the company stands out in the production of organic sugar under its own brand, certified by the Instituto Biodinâmico (IBD) and other international seals, with sales mainly aimed at 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. For 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 in the foreign market, with VHP sugar reaching destinations such as the United States, Switzerland and the United Kingdom, especially after the sugar unit in Santa Vitória started operating. The company has also developed a line of branded organic end‑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, hydrated ethanol, consumed directly in flex‑fuel vehicles, and organic ethanol, destined for the pharmaceutical, beverage, cosmetics, alcohol‑chemicals and food industries. The industrial process follows the typical steps of the sugar and energy sector, including 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 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 the biofuels sold.

The portfolio also includes cleaning products and yeast derivatives, which add value to the production chain. The cleaning products, produced mainly from the company’s own anhydrous ethanol, include liquid alcohol, gel alcohol, household cleaning products, professional‑use items and disinfectants, sold under brands such as Itajá and Allgel. Manufacturing involves tanks, agitators, filling and labeling, and is subject to inspection by the National Health Surveillance Agency (ANVISA) and local health surveillance bodies. Yeast derivatives are obtained from surplus from the alcoholic fermentation process, converted into dry yeast and autolyzed products with a high protein content and B‑complex vitamins, used as an input 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 is made up 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, opened in 2011; and the Santa Vitória unit (USV), located in Santa Vitória (MG), acquired in 2022 after originally being developed by Dow Chemical in partnership with Mitsui. Together, the three plants have a crushing capacity of about 9.0 million tons of sugarcane per harvest, with average harvesting radiuses of around 20 to 24 km, which helps reduce cutting, transshipment, and transportation costs. The units have significant storage capacity for sugar and ethanol, enabling products to be stored for sale in 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 industrial plants’ own consumption, and the surplus is sold under contracts in the Regulated Contracting Environment and the free market, as well as through equity interests in cogeneration companies. The UJM, UOL, and USV units have total installed capacity of approximately 174.5 MW, theoretically enough to supply a mid‑sized city. Part of this portfolio 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 owned. The company also sells carbon credits resulting from the replacement of fossil fuels with biomass and develops projects related to biomethane in partnership with investors in the renewable energy sector.

From a regulatory perspective, Jalles Machado’s activities require a wide range of licenses and authorizations from municipal, state, and federal agencies. The production of sugar and ethanol, as well as cogeneration of electric power, is subject to authorizations from city halls, state environmental departments, water resource 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 agencies, while the Ministry of Agriculture, Livestock and 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 to be in force 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 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, renovation of sugarcane fields, and storage and biofuel production projects. Between 2015 and 2025, it accessed the capital markets on several occasions, including debenture issues specifically aimed at investments in the maintenance, renovation, and improvement of sugarcane fields for future ethanol production. The corporate and capital structure is complemented by strategic partnerships in cogeneration and biomethane, reinforcing the profile of a company integrated into the sugar and energy chain, with exposure both to the domestic market and to international trade in organic sugar, ethanol, and biomass energy.