Nova Realidade Covid-19 após 1 ano

New reality KPMG The New Reality in Agriculture in Brazil has been guided by a massive investment in technologies, in order to guarantee competitiveness in production and marketing. Digital technologies have been transforming the traditional value chain into a value network, enabling new ways to produce and sell agricultural products - marketplaces and digital platforms for capturing and insights into data - as well as the development of new products and new business models. The demand for security and traceability technologies has been growing, in a context of consumer concerns about the way food is produced. Good governance and risk management practices still need to be disseminated, particularly in a business environment increasingly driven by ESG. The consolidation of links in the agricultural value chain also characterizes the new reality, with the creation of scale entities. The need to finance growth and the search for capital diversification have been translated into increasing access to the capital market - through structured debt and equity operations, with emphasis on the issuance of bonds linked to sustainability goals. The pandemic not only amplified the signs of rupture that had been forming in the fuel market for transport purposes worldwide, but also brought structural changes and challenges, as well as opportunities for the sugar and alcohol sector in Brazil. To face the challenges, a radical change will be needed in the way of production, towards the digital transformation of operations, and in the culture of organizations facing innovation in business models. The more advanced the organization is on this journey of digital transformation and innovation, the greater the resilience and the greater the potential for growth in the future (organic and inorganic). At first, this transformation focuses on operational efficiency, cost reduction, product diversification, while the next move will be in data monetization through own or shared ecosystems and, finally, in the management of collaborative digital platforms, leveraging new business models and opening a new horizon for growth. Among the opportunities, the sector's repositioning in the capital markets within the business environment guided by ESG stand © 2021 KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. Printed in Brazil. BD210890 Page 39

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