Information on the Target

Primato Agroindustrial Cooperative, founded in 1997, operates in several agricultural sectors including pigs, chickens, tilapia, beef cattle, dairy, corn, and soybeans, primarily in the Toledo region of Paraná (PR), and extending into Santa Catarina (SC) and Mato Grosso do Sul (MS). The cooperative has grown to encompass approximately 9,500 members, and its portfolio now includes manufacturing feed for these agricultural sectors, in addition to ventures in supermarkets, restaurants, pharmacies, grain reception, and fuel stations.

Industry Overview in Brazil

Brazil is one of the largest agricultural producers in the world, experiencing significant growth in sectors such as livestock, dairy, and crop production. The agricultural industry is crucial to Brazil's economy, contributing notably to export revenues. However, the sector faces environmental challenges, including greenhouse gas emissions and dependency on chemical fertilizers, which underscores the pressing need for sustainable practices.

The increasing commitment to sustainable energy and agribusiness solutions has led to a rise in interest in renewable energy sources, particularly biogas. Utilizing organic waste for energy production aligns with global efforts to reduce carbon footprints and promotes the circular economy, facilitating more environmentally friendly agricultural practices.

In recent years, Brazil has seen substantial investments in renewable energy technologies, driven by government incentives and a growing demand for cleaner energy. Companies are increasingly adopting biogas projects, highlighting a critical shift towards innovations that not only benefit agricultural productivity but also enhance environmental sustainability.

The biogas industry in Brazil presents extensive opportunities for agricultural cooperatives, providing alternatives for waste management and energy generation while also supporting economic development in rural areas. As these projects expand, they offer holistic solutions that can transform traditional farming practices.

The Rationale Behind the Deal

This strategic partnership between Tupy and MWM with Primato aims to establish a biogas plant in Ouro Verde do Oeste (PR) that will leverage swine waste to produce clean energy and renewable fuel. This agreement marks Tupy's entry into the Energy & Decarbonization sector and reflects a commitment to sustainable development while lowering operational costs for farmers.

The initiative starts with 13 farms, with potential to eventually include all cooperative members, providing them with a reliable, sustainable energy source. This endeavor not only promotes environmental responsibility but also enhances productivity and reduces rural dependence on imported energy resources.

Information About the Investor

Tupy is a Brazilian multinational renowned for developing and manufacturing complex cast iron components primarily utilized in transport, infrastructure, agribusiness, and energy generation sectors. The company is dedicated to enhancing quality of life through its engineering solutions, which facilitate access to essential services including healthcare, sanitation, and food production.

MWM, with 70 years of experience, specializes in manufacturing engines and generators across various markets, including the United States, Mexico, and South America. The company's expertise in energy generation, including diesel and natural gas generators, makes it a vital player in Brazil's push towards sustainable energy solutions.

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The partnership between Tupy, MWM, and Primato is a forward-thinking investment that aligns with the growing global demand for renewable energy and sustainable agricultural practices. This biogas project not only addresses the ecological challenges posed by traditional farming but also enhances the economic viability for local farmers by reducing operational costs through sustainable energy sources.

Furthermore, the company’s commitment to utilizing waste products from farming to generate energy is an innovative approach that supports the principles of the circular economy, making it an appealing model for sustainable agricultural development. The integration of biofertilizers into the agricultural process denotes a significant step towards reducing dependency on harmful chemicals.

The investment showcases a comprehensive strategy to tackle climate change while supporting local economies. As Tupy and MWM continue to evolve their technologies and expand their operations, this initiative might serve as a benchmark for future sustainable projects in Brazil and beyond. In conclusion, the partnership stands out as a commendable venture that could yield substantial returns, both economically and environmentally.

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