Strategy

The price appreciation of our rural properties is the main element of our strategy. We believe the value of a rural property is related to cash flow per unit of area. Therefore, we strive to maximize the return on our investments by (i) identifying, acquiring, developing and exploring rural properties that we believe offer high potential for price appreciation; (ii) optimizing the returns and yields of our rural properties by implementing agricultural technologies and techniques that are considered benchmarks in the industry; and (iii) actively managing our rural property portfolio, based on the following principles: (a) combining the returns generated from our properties and from our operations; (b) diversifying the risks associated with weather and crops; (c) efficiently allocating capital between investments and acquisitions; and (d) realizing capital gains through the selective divestment of the rural properties already developed.

To achieve these objectives, we have adopted the following strategy:

Acquisition, development and exploitation of agricultural properties with high potential of appreciation and Diversification and active management of our portfolio

We seek to acquire underutilized agricultural properties with productive potential, to initiate agricultural production and to improve productivity and infrastructure, principally by (i) transforming unproductive properties into pastures, forests or areas for cultivation of value-added crops such as grains and sugarcane; (ii) transforming pastures into areas for cultivation of value-added crops such as grains and sugarcane and (iii) installing certain needed infrastructure such as distribution centers and warehouses.

Enhance productivity of our agricultural properties

We seek to enhance the productivity and underlying value of our agricultural properties by applying modern technologies and instituting sustainable farming practices including the utilization of genetically modified and high-yield seeds, direct sowing techniques, modern machinery, crop rotation, irrigation and the use of fertilizers and pesticides, in accordance with good agricultural practices recommended by the Food and Agriculture Organization of the United Nations.

Diversification and active management of our portfolio

We seek to reduce our exposure to climatic and price risks affecting our agricultural commodity products by developing and maintaining a portfolio of agricultural properties in different geographic regions and by cultivating a range of different agricultural products. We also seek to manage the development of our agricultural properties in different stages to mitigate volatility in our operating costs and in our cash flows from operations and sales of properties. Finally, we utilize a market trend analysis to make investment and management decisions which allocate our capital efficiently between new acquisitions and investments in our existing properties (for example, high commodity prices favor increased production) and the sale of real property and to determine when it is prudent to enter into hedging arrangements to mitigate market risk.