Bunge: Food, Fuel and World Markets Final Exam Questions Directions: Based on the Bunge Case, please

answer the following questions as fully and completely as possible. Please treat this assignment like an in-class exam. Thus, you should work independently and your answers must be in your own words. However, you may draw from additional research or other sources to enhance your responses. If you quote verbatim or paraphrase the work of others, you must cite it and provide references. As with other assignments, in this course, the CUSB graduate conduct and integrity code is in effect for this assignment. A complete response should be about 8-10 pages, total (double spaced with regular formatting one-inch margin on all sides and 12-point font). Naturally, it is quality rather than quantity of writing that carries greater weight in assessing your work. Be sure to integrate relevant theories, concepts or frameworks covered in this or other courses in order to strengthen the logic of your reasoning/argument. Draw on available case information to support your points. Remember, this assignment is worth 20% of your course grade. Please submit your responses via Moodles Turnitin Assignment no later than 12:00 noon, Thursday, April 12. 1. Describe Bunges business model and explain how it enables the company to gain competitiveness in the world marketplace. 20% points Competitive advantage of bunge Able to provide assistance to farmers Financing Crop management Integration and Decentralization Flexibility to respond quickly to changes in market demands Leeway to structure local business to maximize profits Insights and customer relationships born of local knowledge Leader in Brazil

Bunges operating model is based on integrated but decentralized operations and a strong culture built on shared values and a common purpose. Our approach enables us to interpret a global market with global vision; to meet opportunity where and when it arises with agility and responsiveness; and provide superior products and service to farmers, customers and consumers around the world. Maintaining integrated but decentralized operations means striking a balance between the efficiency of a global corporation and the speed of a local business, between the value of a world perspective and the insights and customer relationships born of local knowledge and experience. That is why we emphasize our purpose enhancing lives by improving the global agribusiness and food production chain and our values. Our purpose ensures we are aligned and moving in a common direction. Our values ensure the communication and trust necessary for a network of businesses to operate with latitude and individual initiative and leadership, while each contributing to the same goal. Our approach is built upon a set of core values. Taken together, these values define an organization that believes in:

making decisions at the local level, where understanding of the marketplace is greatest and efficiency easiest to achieve; improving service by building lasting relationships with customers in their own language and customs; motivating entrepreneurial employees toward common goals rather than directing them from the top down; and and engendering a sense of commitment and openness.

Bunge is guided by a set of core values: Integrity, Teamwork, Citizenship, Entrepreneurship and Openness and Trust -helping farmers grow more crops -efficiently transporting agricultural commodities -safely processing food ingredients -creating high quality food productsworldwide -stretching from the farm field to the retail shelf

Sustainability
Bunges purpose is to enhance lives by improving the global food and agribusiness production chain. We are committed to sustainable development and will adhere to the following principles:

We will strive to be good citizens by contributing to the economic and social development of the communities where we work; We will work to achieve a high level of environmental performance by adopting sciencebased, culturally sensitive and pragmatic best practices and by promoting these practices within our supply chain; We will partner with companies and organizations to promote and apply sustainable practices; and We will communicate openly about our activities and maintain a constructive dialogue with stakeholders.

We will apply these principles across our operations, pursuing both global and regional goals.

must all work toward the same end. e know that good decisions are often best made at Integration is indispensable to what we do.

the local level, where we can see and seize new

opportunities. That is why our operations are decentralized. Our goal is to allow freedom of actionand greater responsiveness to the farmers and customers we serve. Blending decentralization and integration can create tension. When we strike the right balance, however, that tension is productive. It sparks debate, fosters new ideas and combats complacency and stagnation. And importantly, it allows us to evolve. Still, in a company with operations that span a complex world and encompass hundreds of facilities, thousands of employees, millions of complementary activities and billions of potential customers, our actions must be aligned to operate smoothly, effectively and profitably. The local links in our production chain must be coordinated globally. The elevator operator in Brazil or the United States, the trader in Switzerland and the plant manager in China And more fundamentally, we operate this way because it is right. Our approach presents enormous opportunities for us as individuals and a competitive advantage for us as a team. It is the charge of our leaders to optimize itto weigh global and local considerations and to make the choices that meet the demands of the market and create the greatest value for all. We operate this way because it makes sense.

2. How has the extension of Bunges supply chain to Europe first and to China more recently been handled? What role do these efforts play in positioning Bunge for the future? 25% points

3. . Bunges role helping the Feed a Growing World is obviously a compelling and an important one & to achieve its mission further expansion was imperative. Expansion in China & France were a stepping stone to have presence in two huge economies,i.e Asia & Europe respectively, & to give a sense of how to about building our business in these regions It can be discerned from the case that expansion to Europe & then China was a part of their growth strategy & Bunge tried to strengthen its leadership core businesses, by optimizing, expanding and extending the businesses and its presence in these countries. Pertaining to the need & environment in the respective economies, it expanded into adjacent businesses where Bunge could leverage its core competencies to be successful.. 4. As it entered new geographies, Bunge continued to stretch out its physical footprint in diversified economies, and despite of the environmental challenges faced in the expansion, Bunge extended its value chains to ensure that it was capturing maximum value across that chain particularly as opportunities migrate within those links. 5. Executing against those three strategic pillars and imperatives, Bunge was ready to face the initial risks that could come along with acquiring Cereol or facing the grunt of government regulations & radical trade environment in China. Bunge, had envisioned that these challenges will lead the way to Bunge being the worlds largest oilsesed processor & at the same time acquiring one of the largest economies China to cater to. As we can see in the case, before the expansion, essentially all the assets are located in three countries, the U.S., Argentina and Brazil, but the expansion gave them an opportunity to build assets in dominating European & Chinese economy. Acquiring Cereol would help Bunge gain positions in Canada, Western Europe & Eastern EuropeAsia. The logic for Asian focus and interest was obvious; the demand for Bunges agricultural commodities and the end products is expected to grow at a fast rate as these economies are progressing, especially for China, there is expected to be growth of soybean meal demand which is obviously critical to Bunges crush activities. Soybean and soy complex demand, will grow all over the world modestly but the vast percentage of the total growth will be increasingly accounted for by China & thats why it is important for Bunge to be there. 6. Bunge obviously riveted its strategy as they entered Asia compared to Europe, as it was first and foremost on China and India as most compelling places to start, but this has to have been more than that and we have been focused on a variety of critical markets which Ill talk to you about. 7. one, by having presence on the ground we better secured that commodity flow and secured our origins and made them more effective and efficient by having that reliable flow.

8. Secondly, by being on the ground we gain differentiated insight and information that we can act upon about what was happening with the real rhythms of supply and demand for the commodities for the end products in China, in India, as those economies and those demands continued to spike. And thirdly, we want to make money. We didnt want to be on the ground just to be on the ground, we had to make prudent investments. 9. As a third stage, which is still in process, is as we plant those flags, as we root those foundational businesses that we continue to expand their reach across our various segment opportunities and start to develop the competency and presence of our organizations in places like China and India and Indonesia and Vietnam, such that we can be a reliable partner as part of the dialogue about the food security futures of these critical economies, because those are obviously at the top of politicians and governments lists of issues that they needed to be focused on. 10. So, what did we do specifically, as I say, the beginning was 1999 when the Bunge Global Markets was formed and we hired our first employees in South East Asia and China and India. By 2003 we were the leading supplier of our core commodity soybean meal, soybean oil, world soybeans to china until the Chinese industry essentially defaulted across the border in 2004, which inspired and accelerated our investment directly in China. 11. Grains as a core focus as feed, wheat and corn primarily really started in 2003 for Asia and around Bunge and were now the leading or the second leading supplier of grains to Asia. In that same year, we acquired the Unilever food oil brands to start to develop our position and posture within India more dynamically than we had been. 12. In 2005, we acquired our first facility in Shandong, which we still own 61% of. The minority is held by the original entrepreneurs. Six months later, we acquired a crush plant in Nanjing. In 2008, we had rebuilt and relaunched a plant in Tianjin with CP as a minority partner. Also in 2008, we acquired a 50% interest in the food depot in Vietnam which is outside of Ho Chi Min, and at the time was the only commercially available deep water port for dry bulk in Vietnam which gave us advantaged efficiency and cost for the importation of our ongoing flows. 13. In 2010, we started up a crushing plant, which we managed in the lower Yangtze Region. We completed the crush plant in Vietnam, which came with the land that was contiguous to the port that we acquired. We completed building our first China we will complete building our first China feed mill in the Nanjing area. We are expanding, doubling the capacity of that lower Yangtze plant and we are constructing an oil refinery in Gujarat in the west coast of India to complement our food strategies there. 14. As I mentioned, we announced last week that we are also proceeding to participate as a minority in a palm plantation company in Indonesia with TPS Foods, which is an existing foods, and palm operator in Indonesia. 15. So, a lot of steps and steps that are accelerating to start expanding our footprint as we establish the foundation of the evolution of this business step by step, and a critical prerequisite in getting any of it or all of it done past in the future was about building a comprehensive strategic game plan that we could communicate within the organization such that as opportunities arose we had time to act quickly and fit it into that strategic context. 16. In Chinas case that strategic footprint was initially about crush capacities both essentially because of the opportunities as well as in the aftermath of our bean customers

having all defaulted in 2004, and the template was to look at what we call the axis of virtue which are these critical logistics paths within China, the north or south road and rail. The east west road and rail as well as the Yangtze River where most of the products gravitated to end meal customers tended to focus and to build around the critical intersections of those logistics networks, and therefore was important for us to build port based operations that tied in closely to those logistics links, which we did in the case of Tianjin, the Shandong Plant in Rizhao and the two plants on the lower Yangtze. 17. We will complete this footprint some time in the future we hope with a plant in the south which will give us significant representation in all the key areas on all the key logistics access net spread of participation and presence gives us interesting information access to the different ribbons in the various parts of China as well as diversifies our risks. 18. If you ever wanted to see what a crush plant looks like in heaven, this is the one that we finished on the lower Yangtze last year in Taixing. 19. In Indias case, because India is not a significant meat consumer and is therefore a net exporter of soybean meal, our focus for accessing into India was built around oils and foods, and mentioned that 2003 acquisition of the Hindustan Lever, sorry, still in China here. As an extension of the China business we launched olive oils in China out of our Nanjing operation the idea being our cost advantage supply can build continuously in a very competitive market. The other related extension is the feed entry which we are starting this year. 20. In India, as I say, it was not about crush as a principal foundational focus, it was about oils and food, and the template was about understanding how demand equations were going to change and migrate over time within terms in all of the various regions of India, state by state since there is, to some extend, no such thing as India, very localized and nuanced demand and supply equations with multiple oils, and this is what's led our evolution as we tried to build out our bottled oil brands as well as a very successful bakery fats business in the south. 21. Our lead oil brand, packaged oil brand today is Dalda, which is what we had acquired from Unilever in 2003 along with that bakery fats business. We hope to add additional acquisitions in future in the Indian food space that will compliment these businesses and enhance our capacity to distribute in critical mass. 22. If that China blueprints of development was built and the issued around the foundation of crock, in India it was about initially around the food space. Our entrance into Vietnam was first through the port that investment that we made in 2008 acquiring this port access. As I said that gave a advantage efficiency in cost which allowed us to build out our commodity flow into Vietnam and brought with it continuous piece of land which is where you see the industrial development, there thats our crush plant that we have completed in the last year, the first of its kind in Vietnam. 23. Our intention like China and India and Vietnam is to build off that foundation that crush foundation extended downstream with the bottled oils, look at feed, look across our categories, sugar for an instance in milling, refining, distribution is an interesting model that we intend to look at. 24. We have the Indonesian investment we now have the foundation for building out our organization in Indonesia and with that looking at the particular opportunities that exist across the Indonesian agri business space as well.

25. In addition to these market-by-market evolutions we spend a lot of time looking for those investments in palm oil over the last few years. The interest in palm is a sensible one for us. As we see on the left, in terms of the consumption of vegetable oils in the world, palm and soya are two largest most compelling oils with palm being the fastest growing. Thats the function of this tendency to be traded at a discount in price as well as this physical location sourcing out of principally Malaysia and Indonesia through the fastest growing markets in Asia, China, India, Bangladesh and others. 26. The bars on the right are looking at the delta that change in volume, on the bar on the left of consumption. Again, the growth we see in vegetable oil consumption over this eightyear period, palm would be the disproportionate share of it. The one on the right thats about the traded volume of vegetable oils, and palm share of it would be that growth would be even more significant. So it makes sense for us we are the leading supplier of soybean oil to the world. To be also complementary in palm it makes sense because our customers that are often demanding multi-oil solutions. Secondly its a great economic opportunity because its the fastest growing. Third, it gives us all the logistics efficiencies bringing oil in tankers from South Americas to Asia, reloading with palm and exporting palm to other parts of the world or within Asia. 27. So, a lot of good and sensible reasons. Its gone along try to spring a good investor who is willing to share their businesses with us and we think we found one and we will go and grow with TPS over the next years assuming that transaction closes in the next month. 28. That compelling argument for growth, and again correlated with incomes is also true in sugar. We anticipate that both China and India over the next years will become structural importers of sugar in size and with that creating a whole tension on supply and demand of sugar necessitating growth of supply principally in Brazil, the greatest opportunities, but there will be select opportunities for origination within Asia as plantations get developed in places like Cambodia, Indonesia, Myanmar in years ahead. 29. The idea would be with this very strong focus on Asian consumption driving increasing demand for sugar is to build a commercial network attend to what we do with the soy complex and be very strong in all the origins of sugar which would include, not just Brazil but also Thailand and Australia, and very strong in the key destination markets with strong marketing teams and strong customer portfolios, but also selectively with assets in milling and refining where it makes sense. 30. So thats our future growth trajectories about building out those core businesses as well as adding those new product and value change to the business and new geographies as we look forward. If you just look retrospectively the trajectory of our business has been significant in Asia just in the last three-four years, we will do roughly 15 million tons of volume across those businesses this year. 31. The interesting point is about the 2008 dip. The demand obstruction that occurred in our industry, and this is not a share, this is total demand for these commodities, do not occur as a consequence to the financial crisis, occurred as a consequence of the price bite in commodities that preceded the financial collapse. And the financial recovery in Asia, as most of you know was relatively quick and relatively painless compared to what is going on in the various parts of the world. Its a good reminder of that again that sensitivity and the importance of servicing those customers well. 32. So, its been a brief history, its been a logical history. None of it would have been possible if we werent capable of developing people and organizations in concert with

those business aspirations. Back in 1999 we had no people. Back in 2003 to this year here, we roughly have 400 people spread across Asia. Next year, with these acquisitions we will be closer to 3000 people. And so, we have been spending awful lot of our time and effort building the organizational competence and processes of building capable and strong teams in parallel with the business, the development efforts that we have been making. 33. All that said, I guess the takeaway messages today would be that Asia will increasingly become the critical growth destination for agricultural commodities based on that presumption of ongoing per capita income growth and the ongoing sophistication formalization, commercialization of their key agricultural business practices. And an important origin in the case of palm, potentially in sugar, as time goes on. 34. China is the primary magnet there, the gorilla in the womb in terms of delta of supply and demand equations that you got to be constantly paying attention to, but is not just about China, there are significant growth trajectories and opportunities for our business in several of the Asian market places. 35. The challenge for us looking retrospectively has been to develop the robust strategies, the targeted execution, and the organizational substance simultaneously and real time. Knock on wood, so far we have been successful doing so, and as we say here, we have made significant progress building out our Asian business in compressed time. 36. Lots of opportunities left, wish we could have done more, we are still energized by the prospects and the possibilities. None of it in Asia has been easy, Indias, Chinas, Indonesias, Vietnams they are all very unique and complex environments. Getting an understanding and the feel, and confidence managing businesses and teams there has not been easy. But we had a lot of fun doing it, and we intend to have more. 37. We are still strapped in and we got lots of places to go and grow and expect to do so in the years ahead. So with that let me turn it over to our sitting panel and take any questions. 38. Question-and-Answer Session 39. Diane Geisler CLSA 40. I just want to remind everybody in the room that we are webcasting the event. So if you have a question can you wait for the microphone so that the webcast listeners can hear it, and I think I will go ahead and start. 41. Obviously, let's just focus on China. I realize your Asia business is growing in a variety of regions. But I think China is obviously critical component of that growth, and Mike Ferb (ph) has done a lot of work on issues in China whether you are talking about land use rights, how to improve yields, we had Dupont here earlier this week talking about seed technology, etc. In your experience, and I appreciate this probably goes back even before you join Bunge, you have seen a lot of changes in China, can you talk about the governments role, can you talk about some of these issues that really made China a net importer across a broad sloth of commodities, and sort of what's your future vision on where is China going to be in 5 years or 10 years in your estimation and how does that really play out for you in terms of not only volume growth, but also profit growth within the Bunge business strategy and Bunge P&L? 42. Christopher White 43. I guess I would say its difficult and dangerous to generalize about the role that the Chinese government or governments have played because I think the reality has been in

these very unusual historical circumstances and economic circumstances both in China and around the world, the assumption is China is monolithic in every word, and has perfect command over all the information at any point in time and can accomplish the result they want. 44. That hasnt been the case. They have struggled to find right answers to complex problems and you have often times had the right hand of what Beijing mainland versus what's happening at the regional or local, and its a provincial order at the local municipality level conflicting. A good case has been the recent stimulus program after 2008 where an awful lot of money was disbursed to local governments and municipalities to spend on projects. 45. That spawned a lot of good ideas and an awful lot of bad ideas, but they were not all coherent, and it had an implication for how China was perceived and how the fundamental demand equations for our businesses and others evolved in those environments. So, what I would say is at the highest levels of Chinese government they are concerned and focused and looking for strategic solutions and partners to help solve their food security problem. And their problem is they have to be import reliant, and historically being import reliant has made them vulnerable to trade policy changes in markets such as the U.S. over historical period. So they would love to see this happen and a first reaction to the large volume of soybean, for instance they are continuing to grow as their food needs expanded, was to try to stop it, manipulate it, understand it. 46. I think there is a growing sophistication and understanding that the world food chain is complicated, that Chinas best interest is to participate as a rational consumer and partner understanding the origin dynamics in all the key locations, the Americas and around the Asian region. They will try to reach out and have more control over some of those origin activities to the extend they can, but ultimately they are going to be holding to be a good participant in the global world trade environment and thats what they should be in what we are trying to encourage. 47. In our particular industry following the upheaval in 2004 when commodity prices spiked and then dropped and the industry defaulted and they managed to work cooperatively and to call that a quality issue of the soybeans arriving to justify the reneging on contracts. In that aftermath people recognize that there are ways and means to be more responsible. But we were at the time we amongst our competitors were branded as the problem, is the international grain suppliers that created this upheaval. While that was happening on the other hand we were having significant discussions with leadership in Beijing about how do we work together cooperatively to solve the long-term food security problem. 48. So, again, be careful about what you are seeing as static. I think the government will become more responsible and I think the next administration will be even more organized and focused on the critical priorities. 49. Diane Geisler CLSA 50. We heard earlier this year, we had an ag conference in June and we had somebody come in and talk about Brazil and that there had been some foreign investments, Chinese investment, into Brazil and never likely show a company setup, etc. just sort of mask it. But do you expect China to be a direct investor in growing regions so that they have that food security or is it enough that they know that they have the network and you provide because you dont own property in Brazil, so you are the originator in market or materials?

51. Christopher White 52. I think that is the logical next step. The first step was to try to stop this growing dependence on imports. The next step is the Chinese circulated rounds that how can we control all those volumes and price whether its soy or grains or sugar around the world and start to participate in the Americas and other places around the world by buying land and buying businesses. 53. I think what they discovered as part of that process was, its very difficult to get to a critical mass of security by buying up enough land in Brazil and investing in all the logistics necessary to help facilitate those flows. And it therefore maybe they are best off working as partners with the key players that existed in the agricultural space already. So, we expect to see the Chinese being more aggressive going out and making select investments, yes, the CIC invested in Noble, COFCO is buying sugar mills, trying to buy sugar mills in Australia. There are lots of discussions around the major agricultural spaces. They bought up large lots of land in Africa. So, yes, but at the end of the day they are not going to be able to produce enough under their controlled environments to satisfy their food security needs and they will have to be dependent on others as good partners to help to service those needs. 54. Diane Geisler CLSA 55. Do you have any questions in the room? More opportunity for me. I think this is the first time I heard Bunge say that you expect India to be a net sugar importer. You have said it before over the longer term and I guess we have seen you obviously tried to acquire some assets in Australia earlier this year, and there was competitive bidding situations. I guess with what you said about China and India, I'm sure they will be a player, what does this do for you in terms of your M&A strategies, your strategies about where you decide to greenfield operations, whether its like what you have done in Vietnam with the port and then you can sort of backfilled behind that. Can you talk about the competitive dynamics? Everybody wants the Asian growth, so. 56. Christopher White 57. Everybody wants Asian growth, and let's not forget also that the local regional players within Asia are evolving rapidly, and they are looking at the same things that we traditionally have and they are not wanting to sell their companies, they are wanting to participate in that future growth too. So I think a means of executing will be increasingly around partnership and joint ventures as the vehicle to get to your strategic footprint. I mean that involves a lot of cultural change too. I mean Norway (ph) for one, El Cardio (ph) for other, and some another who historically has loved to have exclusive control over everything we did to get to the best assets, the best locations, the best partners and that may no longer be possible, and you have to create these network relationships in a variety of ways. 58. In India specifically we looked a lot at sugar both because its an interesting economic model with not only the sugar flow in a very large market, India is the biggest consumer of sugar in the world, but also ethanol because they do have an inclusion mandate and cogen (ph) and they are terribly short of power. So all those things make it an interesting economic model for a piece in our future development in India. 59. To the point that I was trying to make about having presence and having a light to a seat at the table around these policy dialogues one of the interesting things about Indian sugar was you dont own the land, you own the mills which the government demarcates its

where they can be, and you have to create the relationship with the thousands of local team farmers who are close enough to grow the cane and supply the cane to you, and that involves not just a commercial relationship but you are extending services to them better growing practices, use of drip irrigation, better usage of inputs, you have to create again another symbiotic relationship between you and that community which therefore makes you important to the politicians and policymakers more so than if you were just flogging the product across the port. 60. So, as part of the overall strategy, not only build good businesses, growing businesses with good profitability expectations those are also important steps as we build out who Bunge is as Bunge India, as Bunge China, as Bunge Indonesia, as Bunge Vietnam. 61. Diane Geisler CLSA 62. So if we look at your map today I think you said 4% of your long live assets are in Asia where do you see that in five years? To me it just seems based on recent conference calls and recent announcements, most of the capital spend has been fairly focused on emerging markets, not just Asia I mean obviously you have been doing a lot in sort of Eastern Europe, etc. So how do you see that percentage where youve been 10 years ago, where you are today and where you are in say 2021? 63. Christopher White 64. It will be larger, I cant tell you either how big that total capital pool will be, but it will be larger. I think retrospectively the build out of precision Brazilian sugar has been such a significant strategic step over the last five years and building up that global network for sugar will require our investing more around the world inclusive importantly of Asia as the largest destination. But I would like to think that we will fully develop out that palm footprint, and in so far is that does involve buying plantations or developing plantations thats a large capital commitment over time, which will increase our share. 65. If we build out that sugar footprint inclusive of potentially not only mills in the interesting places in Asia and refineries for distribution networks, there are going to be discreet plantation opportunities in sugar that we could develop our partners in places like Cambodia, Indonesia, Myanmar, and in Australia. So we are hopeful of building that and other crop, and building out that palm presence. Those two things alone would give us a much more significant share of capital requirement going forward. 66. Diane Geisler CLSA 67. Okay, so I think you spend what did you spend on Myanmar, was it about a $1 billion. 68. Christopher White 69. $1.5 billion. 70. Diane Geisler CLSA 71. $1.5 billion and a half, so are we thinking? 72. Christopher White 73. It wouldnt be that much because most of these are going to be more organic and more green or brownfield development, but they will be spread across a period of time as those assets become productive and interesting. 74. Diane Geisler CLSA 75. Okay, then I think we have two questions in the room. 76. Unidentified Analyst 77. As your portfolio has gotten more complex, how much has that complicated your job? Are you still able to focus as much on each piece of the business as you would like? And

maybe related, what youve laid out some nice growth drivers, what do you see as the risks to those that you care the most that you focus on the most? 78. Christopher White 79. I think a lot of the complexity has been because the growth is depended upon a lot of inorganic development, acquisitions, partners, ventures, greenfield developments, that its not clear in those multiple conversations you have with partners and governmental entities what's going to ultimately survive. So you have to sink a lot of dry holes. So that I think more than anything has created the complexity. 80. Actually executing in these places as we go from nothing to five plants in China or a plant in Vietnam where we had no organization and nobody built a plant like it in Vietnam, thats very complex, but it is to the core of who Bunge is. Because as you know our Chairman Alberto Weisser who believes in decentralized but integrated notion of how you operate, we were decentralized in the sense that it was on our shoulders to executing all these things. What made us integrate it was we had the capacity to borrow from our brothers and sisters (inaudible) and get over the humps where we didnt have the capability here. So, for instance, when we decided to buy our first plant in China in Shandong in 2005 in that board we had a eight person marketing team in Shanghai at the time, and the board probably asked how are you going to mange this thing, and this is a place where you have never been and you have never managed a crush plant in China. We said dont worry we will figure it out, and the figuring it out was about we took our marketing head because he always wanted to be to understand crush plant he was driven management took our controller from Singapore and made him the CFO at that location. We borrowed a risk manager from our Italian operation, we borrowed engineers from Brazil and Argentina. 81. So as a first cut develop the competence that we could get this thing up and operating well and build the organization from underneath. Six months later when we bought the second plant we totally changed the organizational model and put everybody in the network in Shanghai managing discreet plants that could operate at a scaled level. 82. So, we evolved and developed with the need and we are able to do so. Was that complex? Sure, its complex. But, it suits who we are and what we do. In the case of Vietnam we did the same thing. We had no people. We never build anything in Vietnam and nobody in Vietnam had built a crush plant before. So there was perceived enormous risk, but we built that plant ahead of schedule and under budget cost despite those complexities because of the same thing. We took 38 new engineers that we hired in Vietnam, we had them spend six months in China at the plants, like technologies, they learned and we brought in Brazilian general manager from the Ukraine, etc. and build out this organization which will evolve over time. Is that complex? Yeah, but its what we do. 83. The complexity is more about I think the amount of effort required to sink the one hole that actually hits (inaudible) thats complicated, but thats my problem not the organizations problem and its fun. 84. Diane Geisler CLSA 85. Maybe you could just talk a little bit about the operating environment in China. Currently we heard a lot this year about issues in hog raising, and it may just be on the margin that they are having an issue with disease. 86. Christopher White

87. Yeah. Just one other final comment, sorry Diane, about that complexity. We are doing things also that are consistent with our global priorities and capabilities. Doing crush in China is an extension and an extrapolation of the crushing businesses we have anywhere else in the world. In sugar we are doing it in parallel and close dialogue with all of our sugar operations in White Plains, in London and in Brazil. So we are not striking out on completely foreign turf. We are doing things that are consistent with the existing businesses and competences that we have somewhere else in the world. That derisks it, that decomplicates it to a degree. Actually executing well thats where is the hard stuff. 88. Diane Geisler CLSA 89. Just on the current operating environment, there has been some disease issues in the hog industry, and like I said it may just be on the margin. I mean obviously we all understand the long term growth there with the increase in the economic growth and what that will mean for protein demand, but can you just comment on the current operating environment, are you seeing any pressures on the meal demand or even within the crushing, because of the market? 90. Christopher White 91. The demand functions are okay, crush margins have been subdued, but they have been subdued as global crush margins have been a little sketchy with such large crops in all the major growing areas exacerbated by some of the steps that Chinese government has taken, and the surges of being buying that the Chinese have had. So you saw upward pressure on beans because of these surges and demand as well as the origins farmers not necessarily willing to part yet with all of their crops while product prices were somewhat restrained in the high food inflation environment where Chinese had price controls on vegetable oil. So, margins are crushed. But in terms of the underlying demand its been good and strong and we expect it to continue. 92. So, when you get rid of some of the excesses price controls have now gone away to a large part, because commodity prices have dropped. The financial restraint that is clear in China will probably take care of some of the excess buying that was undertaken by not usual players in the environment. We assume crush margins will normalize over the future and be attractive. 93. Diane Geisler CLSA 94. Okay, well, with that I think we have to cut it here. So we can put you through to your next meeting and get the next session started. I want to thank you for attending. Obviously pretty critical growth driver for Bunge over the coming years and thank you very much. 95. Christopher White 96. Pleasure, thank you. 97. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

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101. Explain the Food-versus-Fuel conundrum. How should Bunge address this conundrum in light of its business model and the emerging opportunities and challenges imposed by high oil prices and the biofuels market boom. 25% points

102. Consider the following options for exploiting strategic opportunities in the biofuels and energy markets: a. Do not enter biofuels; b. Invest cautiously worldwide; and c. Invest aggressively in Brazil Which of these options would you recommend for Bunge? Why? 30% points