Good morning, everyone. Thank you for standing by. Welcome, everyone, to the earnings call relative to Q2 2023 for Três Tentos. Here with us today, we have Mr. Luiz Osório Dumoncel, CEO and IRO, Mr. João Marcelo Dumoncel, COO, Mr. Cristiano Costa, CFO, and Mr. Eduardo Motta, IR Manager. I'd like to inform you that this audio conference is being recorded and will be made available at the company's RI website, where the respective slide deck can also be found. For those who need simultaneous translation, we have one available, too. Just click on the globe icon, where you can read interpretation on the bottom right side of the screen. Those listening to the conference in English, you can silence or mute the original Portuguese audio by clicking on Mute Original Audio. During the event, all participants will be only listening to the company's presentation.
After that, we'll start the Q&A session. Questions can be posted via the audio channel by clicking on the Raise Your Hand icon available on the bottom part of your Zoom screen. To send a question by chat, just click on the Q&A icon, also available on the bottom part of your screen, and type in your question. Before moving on, we'd like to say that forward-looking statements made during this presentation concerning the company's business outlook, operating and financial targets and projections, and also to the company's potential growth, are based on beliefs and assumptions on the part of the company's management and are based on information currently available. Such forward-looking statements involve risks and uncertainties, therefore depend on circumstances that may or may not materialize.
Investors should have in mind that general economic conditions, agribusiness conditions, and other operating factors that could affect the performance of Três Tentos in the future, and thus lead to results that will differ considerably from those expressed in these forward-looking statements. I'd like now to pass the conference over to Mr. Luiz Osório Dumoncel for his opening remarks and presentation. Please, Mr. Dumoncel, you may proceed.
Hello, Lucas. Thank you. Good morning, everyone. We'd like to thank you very much for being here, at yet another earnings call for Três Tentos. We are quite confident in the company's performance, in the company's development of different lines of work.
We could see that the company has strengthening, has been strengthening its operations, a growth of 28%, which reassures us that we have been doing good work, even as we operate in an adverse scenario such as the one we have today, but still producing good results, growing, and this will contribute for the company to continue treading that pathway, both in Rio Grande do Sul and in Mato Grosso. We continue to consolidate our expansion plan, which was started at the IPO date in June 2021. In addition to that expansion, with a high level of quality, we are also identifying an increase in market share of the stores, which are becoming more mature. Also at the older stores, we have been consolidating a strong line of work with farmers, which sets us apart.
We offer something different, and we deliver something, in fact, different, distinguishing. We have also seen a very good performance in the grains segment, due to end-to-end approach with the farmer. Because of negotiations we have been conducting to start exporting grains to... for the ramp-up of our factory in Mato Grosso, it going full steam. We can already say that it started on July first. We have already shipped the first load of meal from Três Tentos, which has already arrived at its destination, and we are quite happy to announce that and to see the work being well done by a very qualified team of people. Today, we are over 2,000 people at the company, working and delivering positive results as per the expectations. We know how to work in this adverse scenario, and we move forward.
In this quarter, it's also important to share with you, we have finalized our acquisition process of the TentosCap, the TentosCap, today, the financial arm of the company, which is authorized by the Central Bank to operate, as per all the norms. Welcome, TentosCap team, to our larger team. With that, we will strengthen, our lines of financial work as well. Next slide, if you will, please. Here are our highlights from Q2 and the first half of the year. We usually, compare quarter on quarter in the same year, but that's difficult to do in agriculture because we have different cycles going on, different crops, different regions.... Throughout the year, that happens, all those differences. Of course, we always try to compare to the previous quarter, the quarter of the previous year, actually.
We know that we see tight margins for the net profit, which actually happens, especially in the industry front. That's where we saw the most intense margin tightening. It also happened in grains and inputs as well. That's a reflection of an increase in expenses, which is not something we expect to see going forward, but those expenses are also tied to the expansion plan I mentioned just now. We are aware that we are still going through this moment, and we're able to segregate investments and expenses, but those expenses still reflect in our bottom line. We have improved when compared to the previous quarter. The financial numbers are worth mentioning for this net income.
It reassures and reinforces the solidity of the company across different scenarios, different fields, and different moments. We have been able to deliver positive results despite adversities along with growth. I turn it over to João Marcelo now for him to explore the numbers and our business lines in more detail. Please, over to you.
Good morning, everyone. It's important to highlight, especially in my operating field where I work, the main highlight for the quarter, for the half of the year, actually, which is the increase in volumes that the company managed to achieve. Despite headwinds, both in terms of the crop in the south of Brazil, which we saw a significant failure, not as large as last year, but still a failure, and also a pricing issue, both affecting inputs and commodities, which have also affected revenues.
Revenues across the agribusiness, actually. The highlight I'd like to make is around the important gain we've seen in market share. As we expanded our company organically, new stores, and the growth of our industrial units, that has allowed us to increase volumes, which, in a way, offset some losses, actually leading to gains. We were able to grow revenue despite those tailwinds, or those headwinds rather, with an increase of net gross profits across all segments, with the exception of the input section, which saw a slight decrease. That, of course, was driven by this, by the price realignment we promoted. In the case of Rio Grande do Sul, because of the lower need of products, because of the longer drought that we experienced, especially in the first quarter. We remain optimistic.
This is an ecosystem we have put in place, which has shown significant resilience and providing balance. Of course, the expansion, which was mentioned, that's a contract we had committed to as of the IPO, and that process is consolidating and providing benefits. In Mato Grosso, for example, Mato Grosso already accounts for 20%, 20% of the input revenue. That's a significant uptrend in volume and market share in Mato Grosso. All of that very much in line with what we had anticipated, even perhaps a little bit exceeding a little what we had projected. That's a very positive factor. You will remember that in 2022, we closed at 13% in market share in the participation of Mato Grosso. Today, we can say 20%, from 13%-20%.
Mato Grosso is increasingly occupying a larger space in our ecosystem. Cristiano could perhaps go into a bit more detail in case, in, in terms of numbers. So over to you.
Good morning, everyone. I'll be talking about our adjusted EBITDA variation, comparing the first half of 2022 with the first half of 2023. We saw a growth in our operating revenue, already mentioned by our CEO, which was accompanied by an increase in our CPV, which was more pressured than usual. That was responsible for the largest portion of our margin drop. Still, we saw an increase in our sales expenses- and two main drivers here that can be seen, that increase, of that increase, which were mainly the expansion of new stores, as mentioned by João Marcelo, our COO.
We are increasing our footprint in Mato Grosso within our projected expansion plan as per the IPO, and that requires new expenses, of course. Also a second effect, as you've seen, throughout the year, we have geared our operations towards grains, and with that, we have a series of other expenses, including storage, freight, and those expenses make up part of that business mix, and which represented some pressure on our margins. Still, challenging quarter, but the company still w- was able to deliver positive results in terms of margins, and we were able to exceed, to surpass that difficult moment. Now, moving over, talking about our net debt variation and comparing the end of 2021 or 2022, December '22, up until June '23, at the close of the first half of this year.
Our net debt increased by BRL 320 million, driven mainly by the completion of investments predicted by the IPO plan. BRL 130 million for the factory at Vera in Mato Grosso, and also BRL 74 million relative to new and mature stores throughout the first half of the year. If we add to that BRL 57 million in dividends, which were paid out throughout the first half, we offset the difference. Our cash is able to finance about 100% of our working capital needs. It's important to highlight that throughout the period, we had the ability to maintain our net cash position and our net debt position.
If you take into account that our EBITDA has increased in the period, if we compare the moment before the IPO, the second Q of 2020, for example, we are basically at the same level of net debt after all the investments that were made during the period, and reaching a moment where we have a level of leverage, which is half of what we had in 2020. That places us in a very healthy position in terms of leverage. The company feels very comfortable with this level of debt and level of cash position that makes up that net debt. Today we have a structure in place which is quite healthy, vis-a-vis the challenges we have ahead in that, that net debt is also linked to long-term factors than before, longer term.
The main effect in terms of increase of net debt was CapEx. I will turn the floor back over to João Marcelo, our CEO, for him to be able to detail those investments. Please, over to you, João Marcelo, please.
Yes, as Cristiano just mentioned, this investment cycle, which started at the IPO, has already reached its final stretch, its final phase. We can see in the presentation a picture of the Vera factory already operational. It started back in May. In June, we had already production in place and expanding. In July, we had production levels very close to full capacity, and in August, we are going full steam, producing within the expected capacity, significant volumes being already used. That's an important landmark in our story. That's the major CapEx component that we had in place for this cycle.
Of course, along with the expansion of the stores, both in Rio Grande do Sul and in Mato Grosso, which were finalized here, right? 9 new stores, the expansion in Cruz Alta, and also, as I said, and the picture shows, the new factory in Vera, Mato Grosso. You can see the investment cycle in the chart, quarter after quarter, after the IPO, and the second quarter, 2023, already included, and now going to a slowdown mode, especially in terms of industry CapEx, and of course, maintaining the store expansion, which does not have the same level of CapEx consumption as industrial investments, naturally. In addition to that, next, please, if you will. It's important to highlight, Luiz Osório has already mentioned in his opening remarks, the fact that we acquired TentosCap.
In time, we will be talking in more detail about this segment, the financial front, which is becoming part of our ecosystem and which will bring credit access to farmers, helping them with working capital. That's important in terms of the way we complement farmers' businesses. Also, agricultural insurance, you know, products, TentosCap has a strong focus on that, and that's an important segment, that of insurance. We've been through two climatic challenges in Rio Grande do Sul, which were supported, offset by insurance. We have already been able to add value to farmers' businesses in both, not only in terms of credit, but also in terms of offering financial health through insurance offerings. Also working with payments, financial advisory, in other words, linking to our major or our core values, financial and technical advisory to farmers.
End-to-end support to provide longevity in the relationship we have with farmers. That forms the basis, the foundations of our, of what we do. We're talking about 20,000 farmers we work with, in addition to other segments that we will add to the platform as we move forward. Without a doubt, TentosCap will bring about significant value to the company and also to our clients, our farmers. That's an important distinguishing factor in the offerings that we have in our portfolio. Next, we can talk about the outlook for 2023. Perhaps Luiz Osório can complement my remarks. Feel free to do so. This is the final slide of our presentation.
We can go then to the Q&A session, but basically, it's nice to highlight that the interest in this concern and also being ahead of the pack, following the movements, we are increasingly seeing our app being used by clients. We are ever closer to our clients and customers. We've seen how strong we are out in the field, how much we know about what happens out in the field, how much we know about agriculture, all those pillars getting in line, and this fourth pillar, represented by TentosCap, adding even more value. We do understand farmers' needs, we do understand what they want, and we always strive to offer more than what expect, offer products and services of the highest quality. That has proven to be very efficient for us. We are able to understand headwinds.
We have already seen, as you mentioned, Cristiano and João Marcelo, drought periods, consecutive drought periods. We know that El Niño is coming up, and we are ready to face those headwinds with the farmers. Throughout this period, we are able to manage those factors which are actually not under our control, such as logistics, climate, foreign exchange rates. Our knowledge, our abilities, provide us with a strong level of reassurance, and that can be transferred to our growers in our relationship. Três Tentos has been working for 28 years in this business, so we've seen different climates, different situations, about a third of a century out in the field, and we can always see that the market perceives that.
When I say that, I mean that first and foremost, foremost, our company identifies the problems, and then clients, suppliers, customers, we always try to offer long-term value. We're not here, we're not here just for one crop or two. We are here for the long run, and we've been in the market long enough to be able to say that and to sign by it. We've, we've heard analysts say that, people who know the market, the grains market in the world, the need, the demand and supply curve, the inventory curve, Brazil produces 300 million tons of grains. In 10 years, we'll be producing 600 million tons of grains. We are working to get there. We see food becoming more available for the whole society, using renewable energy, changing the energy sources as well.
Três Tentos will be ready to face those new times, but always operating in a safe environment, growing organically, providing healthy numbers, as we've shown. We know the way to grow, but we always do it with discipline, with safety. We are proud to have grown our business in the past 10 years, a growth of 30% a year, our CAGR, that does not move us forward. We are preparing this infrastructure for people, especially, and today for the expansion of stores, grain units, and the three industries, the three fronts working well. Cruz Alta in September, going up to 2,000 tons a day. There are 2,600 tons a day in terms of processing.
That, of course, generating oil, fuel, biodiesel, meal to serve different markets, doing a very well thought of arbitrage so that we can offer the best to our clients, and also offer a competitive advantages. To wrap up, I'd like to reinforce this concept that this long-term view is very well established here, not only on my behalf, but the whole team believes in the long-term view, and will continue to be, to do so. Thank you.
We'll now start the Q&A session. Questions can be made via the audio channel by clicking on the icon Raise Your Hand, which can be found in the bottom part of your screen. At that moment, a prompt to unmute your mic will come on the screen.
To send your written message, just click on the Q&A icon, also available on the bottom part of your Zoom screen, and type in your question. Our first question comes from Mateus Raffaelli, Equity Analyst from Itaú BBA. You may proceed.
Good morning, everyone. Thank you for taking my questions. I'd like to go back to a, to the previous call, some inventory issues that we had in the first quarter. From the first quarter to the end of the second quarter, what has changed in terms of inventory management that led to an impact on the input margins? How much of that will be seen in the coming quarters? Can we see a margin recovery happening in the coming quarters, closer to historical levels, above 20%? Also, if we could have an update on the business ramp-up in Mato Grosso.
That has been a positive surprise, no doubt, above expectations. What can you tell us about the market share gain, what do you expect in terms of stores growth, and so on? And also, if you could tell us about the initial operations of the plant in Vera, and if the expectations announced last quarter for soybean crushing can be maintained. Thank you.
Thank you, Mateus. Thank you for your question. João Marcelo will address those numbers for you. João, please, over to you.
Hi, Mateus. Yes, the cost of imports vis-a-vis the inventory levels in the first and the second quarter, that has affected profitability. As I've said, the company was quite comfortable in fertilizers and seeds.
We were not with higher price inventory levels. For pesticides, we, we had a slightly larger inventory, and that extended a bit more in the second quarter, this transition from the old to the new inventory, because of the market. The market is a little behind schedule. This market saw lower demand in the first quarter because of climate issues. In the second quarter, less so, but still a problem in terms of climate. That affected demand. We had a delay for the 2023, 2024 cycle. We have already stabilized that situation. We see things becoming more normal in the second half of the year. We have a very positive expectation for the next crop. Rio Grande do Sul and the south of the continent as a whole is an area which benefits significantly from El Niño years.
In those years where we have El Niño, yields also increase, and also the need for inputs also increases, of course, because of higher humidity. We have higher demand, in short. This will revert to positive numbers for the company. I'd say that the, the worst has been seen in the first quarters of the year. Looking forward now, we see a more normal, more stabilized market. As to your second question about Mato Grosso, the new stores, ramp-up has been a positive surprise, as you said.... We see very good numbers in, in having good teams. Of course, having good people is a major challenge. I have to mention that. People are key, but we, we are being very successful in putting together great teams. We have a number of consultants.
80% of our plans for field consultants have been completed. Those people are already out in the field working, and we will have a crop which will be very successful in terms of new businesses, in terms of sales. The market is starting to work for the next crop, 2024, 2025, and our team is ready out in the field, working hard to be present, and we intend to be even more active in those coming crops. As you know, the Mato Grosso market works ahead of time. This past year, actually, things were sort of out of the standard, but we are now resuming older trends in terms of looking ahead to next crops. As for the factory or the plant in Vera, Mato Grosso, as I said before, the ramp-up has been very successful.
We are quite happy with the plant's performance. As I said, we started working in mid-May. In June, June was a month where we had a fine-tuning period, and then in July, we were working already at full steam or close to that. Very close to full capacity. Sort of better than expected when you talk to the start-up of a huge plant, such as the one in Vera. In August, I can safely say that production is full, and I believe we'll close August at full capacity in terms of production. Close to a very stable situation in terms of volumes going forward. We are quite optimistic in that respect. The ramp-up has been very successful, to your point.
Thank you. Next question comes from Guilherme. Sorry, Henrique Brustolin from BTG Pactual. You may proceed, sir.
Good morning, everyone. Thank you.
I have two questions. One about the input retail sector. If you could quantify that market share gain you mentioned in 2022, 2023, how can we see the level of contribution when you consider the ramp-up of new stores and the share of gain, the gain and share for the more mature stores, and also the contribution from Mato Grosso and from Rio Grande separately? What have you seen in terms of competitive environment that might allowed you to grow above expectations, and how do you see that going forward to 2023, 2024? The second question, in the industry front, I'd like to hear from you, what could be the unit margin for the quarter if the inventory levels had followed the volume of crushing for that division?
How could you interpret the positive results of derivatives to the tune of BRL 26 million, any operational component in the quarter that could be reconciled to your industry margins? Those two points. Thank you.
João Marcelo, you can start with inputs, and I'll complement later.
Okay, Henrique, yes, the market share gain, when we look at the qualitative side of that share gain, well, that was provided by the business environment in the state of Mato Grosso. The state saw a transition in terms of distribution systems, different models were consolidated. Some companies were consolidated in the state. Companies which had a very local identity were consolidated. That changed the environment, and that, of course, brought about more opportunities than we had already mapped out in our initial plan.
Fortunately, we have been able to capture those benefits, those opportunities provided by the market. Of course, once again, with a lot of discipline, we are still able to reap those benefits. If you look at the initial plan-... Mato Grosso has a market share gain ramp that shows a variation. We have been gaining 2 percentage points per cycle, 2% per cycle. I believe right now we are above that level. I'd say above 3% per cycle of market share gain.
We have already accomplished more than 5% of market share all in all, and with the crop year has not finished yet, but if I could make an estimate of the size of the market, I believe we are at about 20%-20% above our estimated market share in our IPO initial plan. Not different in Rio Grande do Sul. Of course, the gain there is driven by organic growth, new stores, which are already in the ramp-up phase, gaining market share. Our stabilized market share for a store, we believe it'll gain market share throughout its useful life, but in the 3rd year, from the 3rd-4th year, we believe that the store reaches its first stable plateau.
That happens in Rio Grande do Sul at about 12%-13% of market share. Some stores are already performing above that. We have also gained market share in the more mature stores because of better offerings, because of our ecosystem, including logistics, industry, and so on. I believe we are able to leverage market share because of that. This will be better structured in our Três Tentos' day. We'll have more time to detail that, and of course, offline as well, I could detail those numbers a bit more if you want. As for industry margins in Henrique, that market trend, well, 2022, we, we saw soy at BRL 180, and today we have seen soy at BRL 130-BRL 140. Those are prices in Rio Grande do Sul.
That drop in soybean prices and other products, that drop allowed us to make some adjustments, the necessary adjustments for us to absorb those purchases. At the same time, our financial results can support those sharper variations, which will happen from time to time. Of course, that is reassuring for us, that we're always going after safety and reassurance for our clients. We are already 100% adjusted for this new moment in terms of grain origination, inventory levels, grains trading, and we can see that in the volumes of soybeans. Três Tentos is increasingly stronger in exports. The company is ready for us to have better arbitrage levels with better results in the domestic market, in the foreign market, and in the industry side.
Exports, domestic market, and industry, the combination of that will give us an interesting support in moments when we have challenging margins. João Marcelo, would you like to say something about that?
I think you are right. You've covered everything. Just to reinforce, there are, there are gains in the financial front, which are also operating gains. From the hedging point of view, it's important to mention that. Also, as I said before, in terms of market share, the market share gains, especially in Mato Grosso, shows variation on a store-by-store basis. We have stores in Mato Grosso, where we have a market share close to 10%, which is also reassuring, of course, and consolidates our view of the potential of the market and of the potential of our value proposition.
Thank you.
Our next question comes from Joaquim Atie , from Citi, Citi. You may proceed.
Hello, good morning. Thank you. I, I have 3 questions. You talk about the logistics bottleneck. What can you tell us about that? Some of the crops have been delayed. How could that impact the company? Is that a potential risk? Number 2, for biodiesel licensing, can, can we expect the licensing for September? Number 3, the, the results of the quarter. We know that the second quarter is, is usually stronger. How do you see this period going forward? Do you see any improvement in the order pipeline? Thank you.
Good morning. Thank you. Once again, we can split the answers. I'd like to ask Eduardo and Cristiano to jump in if they feel like it. As for the first question about the logistics bottleneck, that's a nice problem to have, I'd say.
We see an increase in production, we see investments happening irrespective of the year's performance. We see farmers investing in their land, trying to reach higher levels of yields, and of course, this will lead to bottlenecks, and we are looking at it. We are working hard with suppliers, with clients, for them to receive products on time, in a timely manner. The same goes for grains, the same goes for the industry products. Três Tentos today in Vera, at the BR-163 highway between Sorriso and Sinop, two cities in the state, we are smack in the center of the state in terms of logistics, and we are able to go north, go south. We have well-structured partnerships for that. We can already export corn right now for our second crop. Rio Grande do Sul, we are focused on the Rio Grande port.
Also in Mato Grosso, we have a very good relationship with our highway terminal in Rondonópolis, that allows us to lead or to take our products to the port of Santos, and then from then to the world. We have high knowledge and have that logistics intelligence, so that Três Tentos, that's a factor that can be considered a weakness in Brazil. We can transform that into an opportunity for the company, both for imports, grains, and industry. There is a problem, yes, and we are trying to act before the problem happens, so that our clients will have the necessary competitive advantage, so that we can be ready, well-planned, and of course, Três Tentos will be able to reap the benefits of all of that.
As for the ANP licensing of the biodiesel and the results for the second quarter, and then expectation for the second half, I'd like to turn it over to João Marcelo. He's in a better place to answer that for Leandro.
Hi, Joaquin. Actually, just as a compliment, in terms of logistics, the threat there is a huge opportunity for us. I think we have been increasing our static capacity, 1,600,000 of capacity. That's an important logistics factor, our grain storage capacity. We are trying to increasingly improve those alternatives. Rio Grande do Sul, I'd like to highlight the railway option. Our two factors have good access to the railroad. 100% of our soybean meal that we produce in Rio Grande do Sul is flown or flows through railway.
Logistics is a problem, is a challenge, but at Três Tentos, we see it as a major opportunity, and we have focused intensely on trying to gain efficiency in that segment, logistics. As for the ANP, the National Oil Agency, we expect to see the biodiesel production license for September. With the industry working at full capacity, the company is selling meal and oil. From the point of view of operations, the biodiesel issue is a factor, right? You need to add value. It is a good expectation at this point. We, agencies such as the ANP, the oil agency, they have a certain level of expectations, and we are working on the documentation, on the regularization of papers, and, you know, reaching the final phase of analysis and certification.
As for inputs, what we see for the second half of the year is a resumption of previous crop levels. As I said, the El Niño makes us optimistic in terms of an increase in demand for inputs. Rio Grande do Sul, as we see it, we'll see a very different agricultural year, different from the previous two years. We are certainly going towards a better production cycle. Higher demand from inputs, we expect to see a very, intense market. Mato Grosso, slightly different. They are on an upward trend in terms of inputs, and as I said before, the inventory issue has been addressed and tackled internally.
It took longer than expected because farmers took longer to buy, but this has already been addressed. The planting season has already started in Rio Grande do Sul in September, soybeans, then October in Rio Grande, Mato Grosso. Demand will increase in the next couple of months. As I said, farmers held back a bit on their purchases. But has come a time when they have no choice. We are quite optimistic in terms of inputs for the second half of the year and for the whole cycle, 2023, 2024.
Thank you.
Next question, Guilherme Pedroni from Bank of America. You may proceed.
Good morning. Thank you. To previous questions, points, you did mention, João, about the volume performance, which is quite impressive, growing by 50% in some products.
If we could quantify a breakdown between mature stores and new stores, if you could comment on that. Specifically for mature stores, how has that volume grown across more mature stores? As for the industry, when we look at this new moment, when we see biodiesel, higher level of mixtures, we see a lot of offer, a lot of supply in the industry, lots of people invested in the sector, that led, of course, to a very high installed capacity. How do you In terms of biodiesel pricing, even in a scenario of B12 adoption, how do you see the supply and demand balancing? Thank you.
Thank you for your questions. João Marcelo will address the question about mature and new stores. Please, over to you.
As you've mentioned in your question, that increase in volume is our major highlight for the first half, for the whole cycle, actually, which comes to show that we have gained real market share. It shows the strength of our value proposition to farmers. In fact, the market share gain, came at about... The, the volume gain actually came at about 70% for mature stores. Mature stores, of course, we have a concept of mature stores, as I mentioned before, 3 years onwards. Many stores gain performance in the 4th year, 5th year. If we extend the cycle, we have higher market share gain. With younger stores, below 3 years of operation, they are now accounting for 30% of that growth in volume, which is also good.
Stores take about a year, 1 year, to put together a team, for the team to get to know the portfolios. They will have a level of delivery, starting in the second to the third year, as I said. Technically, for analytical purposes, we consider them mature, but they continue to mature, actually. I think that the growth is coming from new stores, of course, no doubt, but it's also focused on mature stores. That's not what we are gonna continue to do, but if we were not to open any new stores, theoretically, theoretically, we would still have important market share gains only because of the mature stores and that continue to develop. Stores with 3 years in the market or more. As for the industry-...
About biodiesel, we still consider the market to be in its final stages of consolidation. Maybe I talked about it in our last call. We see the strength of the interior of Brazil, where we are able to produce renewable fuel in Mato Grosso, in Mato Grosso, amidst our soybean crop. We are able to add value to soybean oil. We can adjust and adapt production, inventory levels, demand, can adjust that and focus on feed and on energy and on food. Brazil has a major strength, that soybean is being produced right there, that renewable fuel is being consumed there as well, and with a very important logistics opportunity. Distributing companies have already prepared their infrastructure, not only for B12, but also getting ready for this new increase in mixes.
There was some, if I can say it, emotion in the market when the law that was passed. Until B15, there are there's people talking about B20 already. Of course, the industry or any industry, of course, would do the same. The, the industry has already made investments already in anticipation for those increases in the mix. We, I have been talking with several other players in the market. We already see a higher level of maturity for those investments, and we see more mature plans. We have predictability. That's all we ask. We ask for predictability. If we have predictability, we'll continue to invest. For Três Tentos, that's, that's an important, rock for us to lean on. In Vera, we are working at full capacity today.
As our Industrial Officer likes to say, he says, "That's the most modern plant in Brazil," the one we have in Vera, Mato Grosso, in Vera. We are quite happy to see that. We look at the numbers, we know how to monitor all the indicators. We are quite confident with the operation. We can also make better decisions between oil for the domestic market, oil for the export market, or biodiesel. We always add value to oil, and we'll move forward. We are quite confident, as I said. As for pricing, when the market matures, we started all that in the auction phase. Literally, people sent letters to Petrobras in Rio de Janeiro, hard copy letters, which were signed. This is how everything started.
We moved on to online auctions, and today, we have our clients, the distributing companies, buying from us. That brings about more transparency and consequently, fewer risks to the market. The market does that on a weekly basis. Any abrupt move or difference, we can monitor that. Not only us, but distributors also, we can quickly adjust to market variations. We feel safer, confident, we know the size of the country, we know what we can produce, and we also know the demand, both in Brazil and abroad. Biodiesel is now becoming part of a more varied energy matrix in Brazil. To what you said, Biodiesel only goes up, right? We'll see faster speeds, lower speeds, but the way is up for Biodiesel, as we see it here at the bank. It'll have more space, more room.
Biodiesel has seen the worst it has, the pandemic, the mix issues, and the increases contemplated by the law. I believe we're gonna move on to a much more positive cycle now as we resume mixture levels, as demand resumes, and with pressure coming from oil prices as well. There will be room for biodiesel to gain more market share.
Thank you. A final question about competition. You mentioned Mato Grosso. What about Mato Grosso? How about Rio Grande do Sul?... We see players going to model to Rio Grande to expand their businesses. Do you feel the pressure?
You've seen good volumes, you've seen volume growth coming from mature stores, but if you could please comment on potential competition pressures. The market is competitive as it has always been. Nothing new in that front.
Rio Grande was a late entrant in that more competitive market, but it has been competitive. Several markets already established here, so we do not see any change in that landscape, right? It is a competitive market, period. Well-organized companies, well-organized players, always trying to find a place in the market. Maybe we could foresee some consolidation going forward. Some smaller vendors, smaller niche resellers, could perhaps get together and try to find a different model, business model, or maybe even closing down, you know, but smaller, smaller vendors. Thank you.
This concludes our Q&A session. I'd like to turn the conference back over to Mr. Luiz Osório for his final comments. You may proceed. Thank you. I'd like to apologize to you for our 10-minute delay. We had some technical glitches to get the conference started. We apologize for that.
Again, thank you very much for your attention, your time for this earnings call for Q2. yet another one, the company becoming more mature, getting ready for a new growth cycle. We are very focused on our expansion plans to be able to conclude this plan by the end of this year. We should be ready at the end of the year with everything ready to go and already providing results. We'll be on it, and our team is confident on the business, and we trust the business, and we trust that we continue to grow. Once again, thank you very much.