DATA ENVELOPMENT ANALYSIS (DEA) APPLICATION FOR THE RELATIVE EVALUATION ON THE OPERATIONAL EFFICIENCY OF SUGAR CANE MILLS IN BRAZIL

The study aims to analyze the impact of the variables size and location over the operational efficiency of sugarcane mills producing sugar and ethanol in Brazil year 2008/2009. Data concerning total milling and total production of sugar and ethanol was collected regarding Brazilian sugar cane mills. An operational efficiency ranking was developed, applying Data Envelopment Analysis (DEA) technique, through which was possible to verify which were the most efficient among 355 sugarcane mills and, therefore, compare the variables size, location and operational efficiency among the Brazilian mills. The quantitative analysis suggests that among the efficient groups, there is a major concentration of larger mills, located in the state of Sao Paulo. Aiming an in-depth analysis, a multiple-case study was conducted in a group of sugarcane mills, and interviews with experts in the sugarcane industry were developed. Therefore, the conclusion is that operational efficiency of sugarcane mills depends on the variable location, as larger mills tend to invest more in technologies that provide major gain in operational efficiency. The operational efficiency depends also on the location of the sugarcane mill, as the state of Sao Paulo provides favorable edaphoclimatic conditions for the juice extraction of sugarcane with a higher level of sucrose content, hence possibly having influence over the operational efficiency.