Farallon moves forward with talks to sell cement maker to CSN

Companhia Siderúrgica Nacional – Wikipédia, a enciclopédia livre

CSN group is about to close the purchase of Cimentos Elizabeth, which belongs to the Farallon fund. The deal, valued at R$1.1 billion to be paid in cash, has already been agreed upon by both parties – it is now pending details, mainly legal, and contractual issues, sources say. CSN group operates in the steel, iron mining, cement, railroad and energy industries and is led by businessman Benjamin Steinbruch.

The deal is expected to be announced by the end of this week, according to sources close to the deal. The cement plant belongs to Daniel Goldberg’s Farallon fund, which received the asset as payment of debts from the Crispin family, owner of Cerâmica Elizabeth, in August last year.

Starting operations in 2015, the company has a factory located in Alhandra, Paraíba, with a production capacity of 1.2 million tonnes per year. It holds about 30% of the cement market in the state.

Companhia Siderúrgica Nacional, which controls CSN Cimentos, confirmed on June 9 that it was in talks with Farallon, after Valor reported that the fund and the companies were in advanced exclusive negotiations. Farallon and CSN declined to comment.

The acquisition of Elizabeth is an important step in CSN’s growth project in the cement business and another consolidation movement in the sector, which currently has 23 producing groups and idle production capacity around 30%.

The asset will allow CSN’s cement business to move from the sixth to the fifth position in the ranking of producers in the country in terms of installed capacity. Currently, Mr. Steinbruch’s company is able to produce 4.7 million tonnes per year in two plants – in Volta Redonda (Rio de Janeiro) and Arcos (Minas Gerais).

In May, CSN requested to list its cement division on the stock exchange, stimulated by the successful IPO process of CSN Mineração, which raised R$5.2 billion earlier this year. The primary offering of CSN Cimentos intends to raise at least R$2 billion.

The proceeds, according to presentations to investors made by CSN’s management, will be earmarked for its growth process, either by organic projects (new factories and expansions of current ones) or by asset acquisitions. Currently, CSN has plans for new factories in Paraná and Sergipe. And an expansion project for the factory in Arcos, of 1.2 million tonnes a year.

CSN is also seen as one of the main groups interested in LafargeHolcim’s assets in Brazil, put on sale in April.

The ambition of CSN — which is the sixth largest cement company in the country by installed capacity — is to be among the leaders in the cement sector. Votorantim Cimentos is the main company, with about 30% of the national market. Next comes InterCement, which also filed for a public offering of shares in B3, with 15%. LafargeHolcim Group is third in the ranking, followed by Buzzi/Brennand and Cimento Mizu.

This is a good moment for the cement industry in the country. After facing a deep crisis from 2015 to 2018, with a cumulative downturn of 27% in sales, consumption recovered from 2019, with an increase of 3.4%. Last year, stimulated by renovations and the real estate market, it grew by 11%. For this year, analysts project growth between 5% and 7% driven by mass vaccination against Covid-19 and the economic recovery.

CSN considers an average growth projection of 6.5% per year of cement consumption in the country between this year and 2025.

If talks with CSN fall apart, Farallon is likely to open a formal sales process for the asset. There are three other groups interested in the business, sources say.

Source: Valor international


Usina Batatais reaches deal with Cargill to buy Cevasa

Usina Batatais deve moer 4,150 mi de t de cana na safra 2020/21 | Brasilagro

Usina Batatais, a sugar-and-ethanol company owned by businessman Bernardo Biagi, has agreed to buy power station Central Energética Vale do Sapucaí (Cevasa), currently controlled by Cargill. The conclusion of the deal depends on the approval of the Administrative Council for Economic Defense (Cade).

Cargill confirmed the deal and told Valor that the completion is subject to Cade. In a statement distributed on Monday, Batatais said that the agreement was reached last Friday and should be completed in 30 to 45 days. According to the document, the plan is of “continuity of the operations of the two industrial plants.”

Batatais had the law firm LO Baptista and Itaú BBA as advisors for the transaction, while Cargill had advice from consultancy Mazars. FG/A also took part in the financial consultancy of the operation.

Cevasa is located in Patrocínio Paulista, São Paulo, 15 kilometers from the Batatais plant, located in the namesake municipality.

In the past season (2020/21), Batatais processed 4.4 million tonnes of sugar cane and allocated 55% of the juice for sugar production. Cevasa milled 2.6 million tonnes and allocated 60% of the juice to the production of the commodity, in addition to having traded 113,000 megawatt-hours of energy generated from the burning of sugarcane bagasse.

The operation represents for Batatais the first expansion bid since the split, in 2020, of the Lins plant, which stayed with Lourenço Biagi, brother of Bernardo Biagi. For Cargill, it is another step out of Brazil’s sugar-and-ethanol industry, whose most relevant step was also this month, with the completion of the sale of its stake in trading company Alvean to Copersucar.

Source: Valor international


Casa dos Ventos and Energisa Comercializadora close deal

Casa dos Ventos fecha contrato de R$ 150 mi com Vulcabras de energia eólica  | Empresas | Valor Econômico

Casa dos Ventos has signed a long-term contract (PPA) with Energisa Comercializadora for the sale of energy from the Rio do Vento wind farm complex, in the northeastern state of Rio Grande do Norte, which is entering commercial operation. The agreement foresees the supply of 20 average megawatts (MW) from 2023 to 2038. The companies have not disclosed the value of the deal.

The wind power complex with a capacity of 504 MW was operating until then in a test phase and received the first operating licenses a fews weeks ago. According to Casa dos Ventos director for new businesses, Lucas Araripe, the Brazilian Electricity Regulatory Agency (Aneel) is expected to issue the commercial operation order for the unit this week.

Energisa Comercializadora CEO Pedro Vidal says that the purchase is aligned with the group’s strategy to expand the share of renewable energy in its portfolio, amid the transition to a low-carbon economy and the expectation of expansion of the free market, as it will open for small consumers in the next few years.

“We want to have clean, renewable energy to deliver to our customers, within the context of decarbonization [of the economy],” he says.

Mr. Vidal says that long-term agreements with generators, as is the case with the contract with Casa dos Ventos, help the trading company to escape short-term volatility in the market.

He points out that the demand from free market customers for new contracts has grown in recent weeks, due to the water crisis that affects hydroelectric generation and impacts energy prices. “This way we are able to have competitive prices and serve the customers in a way that they also stay out of this volatility. It’s a way of protecting customers, so that they have a predictable energy cost,” he says.

Energisa Comercializadora already has ongoing conversations with Casa dos Ventos for new contracts.

With the conclusion of the commercialization round of the first phase of Rio do Vento, the wind generation company will now focus on agreements for the sale of energy from the second phase of the complex and the Babilônia project, in Bahia state.

Both will start construction in the second half of this year and are expected to start operating in 2023.

The director of Casa dos Ventos says that the group wants to transform its wind power plants into hybrid units, together with solar generation. This way, the group’s portfolio is expected to reach, in the next two years, 1.6 GW of wind power capacity and 400 MW of solar photovoltaic generation.

In addition, the development of a solar-only project is also in the plans. The company is evaluating to diversify not only its generation portfolio, but also its geographic presence, which until now has been concentrated in the Northeast of the country.

“We are studying a solar project perhaps in the Midwest region. The idea is, for the solar source, to diversify our operation from the market point of view. If the company wants to preserve a little of the submarket risk, the idea is to also have generation in the Southeast,” says Mr. Araripe.

Casa dos Ventos is also evaluating the development of a new wind project in the Northeast, with no defined size yet. The group is also registered to participate of the Aneel’s auctions for the regulated market scheduled for later this year. Mr. Araripe highlights, however, that the group’s focus will continue in the free market. “We participate in the auctions to see the prices, but even if we win, it will be with a minimum portion of our capacity. Our big focus is these contracts with large and medium consumers” he says.

Source: Valor international


Toro buys fintechs Mobills and Monetus

Toro Investimentos é boa? Conheça empresa com corretagem zero!

Toro, Santander Brasil’s investment platform, announced the purchase of fintechs Mobills and Monetus to complement its portfolio of services and expand its operations in the country. With the acquisition, 10 million users will be added to the company’s ecosystem of services.

Mobills has a variety of financial applications that have been downloaded more than 30 million times. The main one is the app of the same name, which, with 10 million downloads, is considered the largest and best rated financial planning application in the country.

“The integration of data from several institutions – which is being developed by Mobills – is aligned to the open banking project, which will aggregate and automate the client’s entire financial life, regardless of the financial institution used,” says Toro.

Monetus is one of the pioneers in the creation of an automated investment app based on objectives. After considering the client’s needs and risk profile, the app automatically creates, executes and tracks a diversified and personalized investment strategy.

“Mobills and Monetus strengthen Toro’s open ecosystem with millions of people seeking to improve their finances, scalable financial planning and investment tools based on the clients’ goals and an entrepreneurial, decentralized network of experts,” says Gabriel Kallas, co-founder and CEO of Toro.

The executive adds that Mobills and Monetus, just like Toro, are companies that grow exponentially, at rates exceeding 100% per year. They use capital generated by their own activity and have already reached profitability.

The acquisition of 100% of Monetus’s and Mobills’s capital involves cash and an exchange of shares, turning shareholders of both companies into partners of Toro. The transaction still depends on the regulators’ approval.

“The synergies for Mobills with Toro and Monetus are clear, while maintaining independence and the freedom to always offer the best for the customer,” explains Carlos Terceiro, CEO and co-founder of Mobills. “Mobills will provide scale and technology to our personal financial planning service, and Toro will help reduce the main frictions of our goal-based investment app,” adds Daniel Calonge, CEO and co-founder of Monetus.

Source: Valor international


Logistics makes Cibra move plant in Mato Grosso

Cibra Fertilizantes says it plans to invest R$150 million to build a new fertilizer plant in Sinop, Mato Grosso. The Bahia-based company is controlled by the American group Omimex and has the British mining company Anglo American as a minority shareholder.

The unit, which will replace the company’s plant located in Sorriso, in the same state, should start operating in the first half of 2023, with a production capacity of 200,000 tonnes per year. When it reaches its full capacity, in 2026, the annual volume may top 500,000 tonnes.

The site chosen for the plant is strategic. It is at the junction of the MT-220 and BR-163 highways, close to the projected Ferrogrão intermodal terminal. The unit will produce traditional NPK mixtures (nutrients derived from nitrogen, phosphorus and potassium) and simple elements.

The investment is part of the plan already announced by the company to invest R$400 million in Brazil between 2018 and 2020 with funds from partners and the International Finance Corporation (IFC), the investment arm of the World Bank.

“We want to increase the production and have a broader portfolio to serve all regions of Brazil,” Cibra CEO Santiago Franco told Valor.

According to him, the company has been growing above the market for a few years. In 2020, it reported revenues of R$2.5 billion, up 17% from 2019. Production reached 1.7 million tonnes, up 16% from the previous yuear, while sales of the fertilizer segment as a whole grew 12%.

This year forecast is for a 15% increase, with the sale of 2 million tonnes of fertilizers. For 2025, the goal is to reach 3 million tonnes.

This year, as part of its expansion plan, Cibra announced the purchase of Fertilizantes Heringer’s plant in Uberaba, Minas Gerais, and Mr. Franco says that another major deal will be closed.

In addition to basic fertilizers, Cibra intends to launch Poli4 in Brazil, extracted by Anglo American, in England, from a rock called polyhalite. The rock brings together four nutrients (calcium, magnesium, potassium, and sulfur). “This product is organic. It is the future of the fertilizer market, but it is still only being tested in Brazil,” says the executive.

Founded in 1994 by the Paranapanema group, Cibra was born as Cibrafértil. In 2012, it was bought by Omimex, via its fertilizer arm that operated in other Latin American countries, Abonos Colombianos (Abocol). With the sale of Abocol’s operations in almost all of Latin America to Norwegian Yara, Cibra became a company concentrated in Brazil.

Headquartered in Camaçari, Bahia, Cibra currently has 11 plants in the country: three in Bahia, two in Mato Grosso, two in Paraná, one in Goiás, one in Rio Grande do Sul, one in Santa Catarina and another one in Minas Gerais.

Brazilian agricultural exports break new record

Rally of US agricultural exports to China on shaky ground

Brazilian agribusiness exports remained firm and reached $13.9 billion in May, 33.7% up than in the same month last year, according to data from the Secretariat of Foreign Trade (Secex) compiled by the Ministry of Agriculture. According to the ministry, it was a new record for the month of May, directly influenced by high commodity prices in the international market.

Even so, and as it had already happened in April — another record month —, the sector’s share in the country’s total exports fell to 51.7%, compared to 59.5% in May 2020, according to the ministry. Imports of agricultural products also increased — 45.9%, to $1.2 billion. This way, the monthly surplus of the sector reached $12.7 billion, a 32.7% growth.

Shipments of soybeans and derivatives (soy maze and oil) definitely recovered from the slow pace of the first quarter, caused by the delay in the harvest in the 2020/21 crop, and recorded a high of 53,5% in May, to $8,3 billion. “The International soybean scenario reflects low stocks in U.S. and high Chinese acquisitions. This panorama resulted in prices above $16 per bushel on the Chicago Stock Exchange in May, the highest face value since September 2012,” stated the ministry.

In total, exports of soybeans in grain reached a record 16.4 million tonnes last month (China absorbed 11.2 million), 16.3% more than in May 2020, and generated $7.3 billion (+56.3%).

Brazilian shipments of meat (beef, chicken and pork), in turn, reached $1.7 billion, 5% more than a year earlier. Shipments of beef fell 6.9% to $724.3 million due to falling sales to China — 16.3%, to $343.2 million; chicken meat shipments increased 20.1% to $642.8 million, and pork meat shipments were 11.2% higher ($251.4 million). Even with the slowdown in beef purchases, China remained the main destination for Brazil’s meat exports.

Among the other groups of products most exported by the Brazilian agriculture sector, forest products registered an increase of 22.8%, to $1.3 billion, sugar and ethanol advanced 16.3%, to $899.3 million, and coffee fell 8.5%, to $474.2 million. In total, China was the destination of 45.8% of Brazilian agribusiness shipment revenues in May, $6.4 billion.

With the strong increases in April and May, in the first five months of the year Brazilian agricultural exports reached $50.2 billion, 21.9% higher than in the same period last year. Imports grew 15.1% in comparison, to $6.2 billion, and thus surplus was 23% higher ($44 billion).

From January to May, shipments of soybean and derivatives increased 29.9%, to $23.8 billion, the shipments of meat grew 5.7%, to $7.3 billion; exports of forest products rose 10.6%, to $5.2 billion, shipments of sugar and ethanol recorded a high of 33.5%, to $3.6 billion, and those of coffee were 14.4% higher ($2.5 billion). In the period, China was the destination of 39.6% of the total exports of Brazilian agricultural products ($19.9 billion).

Source: Valor international


Brazil greenlights imports of U.S. corn

Exportação de milho ganha ritmo no Brasil e toma espaço da soja nos portos  - Cotrisoja

The federal government will greenlight imports of corn from the United States starting in July after renewed pressure by poultry and hog raisers due to the all-time high production costs this year.

The decision is seen as strategic by the animal protein industry, which gains bargaining power to try and flatten prices of corn, the main input of animal feed, or at least create a ceiling in prices in the domestic market, but few deals should materialize.

The National Technical Commission for Biosafety (CTNBio) approved last Thursday the release for human and animal consumption of the last transgenic variety grown in the U.S., DP-ØØ4114-3, which still did not have the approval to enter the Brazilian territory. There were only two on the list of genetically modified organisms without approval. The other, DAS-59122-7, was released in May. Both are from the company Corteva Agriscience.

CTNBio also updated a resolution that allowed the commercialization of grains naturally crossed in the fields or mixed in shipments in industrial companies or ships. The rule applies to corn produced in Brazil or abroad.

“What the farmer harvests is different from what CTNBio approved, because there was a natural crossing between neighboring crops,” CTNBio’s President Paulo Barroso, an agricultural engineer and geneticist, told Valor.

It would cost “billions” of reais to evaluate each crossing, he said, and that would be an unnecessary action, since only original transformation events can be cultivated.

Mr. Barroso stressed that the change was not made exclusively to meet the importation interest, which is valid for other plants and animals, and that Brazil needed to give legal security to what was already practiced in the country. The norm will be valid as of July and should be published soon in the Daily Gazette.

According to the director of biotechnology at CropLife, Othon Abrahão, the transgenic varieties released for consumption in Brazil by CTNBio were already approved for planting and consumption in the United States and ten other countries since 2013. They had not been analyzed here before because they do not meet the characteristics and needs of Brazilian producers for cultivation, and there was not the “import movement” of corn as there is now.

“They are safe products for consumption, without any risk,” he told Valor. “With these approvals, Brazil will be able to import all the events grown in the U.S.”

Source: Valor international


Labor productivity rises in first quarter

Aprenda Como Medir a Produtividade da Sua Equipe

After rising strongly in 2020 — especially in the second quarter — driven by the atypical impacts of the Covid-19 crisis, labor productivity in Brazil seems to be returning to the low growth trend seen before the pandemic.

Workers’ gain in efficiency lost momentum in the first quarter, which should continue as the economy returns to normal, a study by Fundação Getulio Vargas’s Brazilian Institute of Economics (Ibre-FGV) shows.

Productivity rose 4% year over year between January and March after comparing the added value with hours actually worked. The increase reached 23.9% in the second quarter of 2020, in a scenario in which the working hours of Brazilians decreased sharply, affected by social distancing measures and government policies like the emergency aid aimed at informal workers and the suspension or reduction of the workday of formal workers.

Since then, the increase in labor productivity has been slowing: it grew by 15.3% in the third quarter of last year; by 10.1% in the fourth quarter, and now by 4%. The calculations with seasonal adjustment by researchers Fernando Veloso, Silvia Matos and Paulo Peruchetti showed a decline in the three months to March, of 1.2% compared to the last quarter of 2020.

In “normal” conditions, the most appropriate concept to analyze labor productivity is the measure by hours usually worked, which reflects what the average day would be like, excluding atypical situations such as holidays and days off. However, due to the exceptional character of the recession brought on by Covid-19, which made people work far fewer hours than the standard at first, FGV/Ibre assesses that productivity by hours actually worked would be the most reliable criterion now.

This data is part of official statistics body IBGE’s Continuous National Household Sample Survey (Pnad), which asks interviewees how many hours they actually work per week. In the second quarter of last year, there was a fall of 27.6% in this indicator compared to the same period of 2019. As the added value decreased, but in lower intensity (-10.3%), productivity jumped in the period, but the gain was never considered genuine by the authors of the survey.

In this first quarter, the 4% increase in labor productivity was the result of a 3.1% decrease in the hours actually worked, always in comparison to the same interval of the previous year, and a small increase in the added value, of 0.8%. According to Mr. Veloso, it is possible that the second wave of the pandemic, which still had a negative impact on the working day of Brazilians, has postponed to some extent the expected downward adjustment in productivity, but that is the expectation from now on.

“The high productivity in the pandemic has always been seen by us as a temporary phenomenon. The doubt is whether the adjustment would happen fully at the beginning of the year, but this depends a lot on the movement of the pandemic, which defines whether the face-to-face sectors will return or not,” points out the economist, who highlights the role of the “composition effect” in increasing work efficiency over the past year.

As the sector most affected by the pandemic is services, which includes activities with lower productive efficiency, the closure of several segments ended up raising aggregate productivity. This gain, however, tends to be reversed as the sector returns to operating at standards closer to pre-pandemic, Mr. Veloso said. The same reasoning applies to the departure from the labor force of people with lower education, who work in less productive occupations and will return to the market when vaccination is more advanced.

Silvia Matos, technical coordinator of Ibre’s Macro Bulletin, recalls that the more widespread use of technology and the popularization of non-face-to-face work in the midst of the pandemic would be other possible explanations for productivity growth, but even these gains tend not to be lasting.

“The educational and technological conditions of each country are important for these gains to be widespread and more permanent,” Ms. Matos said. She also points out the slower recovery of more informal segments of the economy as another temporarily positive influence on labor productivity, such as “other services”, transport and construction. “Informal segments with large participation in employment are still suffering.”

Mr. Veloso, Ms. Matos and Mr. Peruchetti also calculated the evolution of Total Factor Productivity, which measures the efficiency with which capital and labor factors turn into production. By this concept, also using the hours actually worked, the productivity of the Brazilian economy lost momentum, advancing 0.4% in the first quarter before the same period of 2020. In the second quarter of last year, the increase was 17.3%, a pace that slowed to 6.8% in the third quarter, and to 2.6% between October and December.

Source: Valor international


Exporters want R$19bn compensation from banks involved in cartel

Banco de Horas: Regras, vantagens e compensação

The Brazilian Foreign Trade Association (AEB), which represents some of the country’s largest exporters, wants compensation of almost R$20 billion from 19 banks accused of involvement in an international cartel scheme in the foreign exchange sector. It is one of the first class actions in Brazil to seek compensation for competitive damages and one of the biggest ever filed in the country.

The case of the foreign exchange cartel itself is not new. The international scandal was revealed in 2015. At the time, chats of traders showed coordinated actions to influence reference indexes of the foreign exchange markets. The transactions aligned purchases and sales of currencies between January 2008 and December 2012. In Brazil, it involved the Ptax.

In Brazil, Swiss bank UBS signed a leniency agreement with the Administrative Council for Economic Defense (Cade) in July 2015, in which it detailed the scheme and implicated other banks. The case continues to this day. Last month, the Administrative Council for Economic Defense (Cade) approved a term of termination commitment with NatWest Markets (formerly the Royal Bank of Scotland) and thus reached nine agreements in the cartel lawsuit. Also last month, Petrobras filed suit for compensation against nine banks involved in the case. Valor has learned the company even considered participating in the class action of AEB, but then ended up deciding to do it alone.

In the United States, the case’s collective compensation already exceeds $2.3 billion, in addition to another $2.5 billion that banks have paid in the settlements with the Department of Justice (DoJ).

AEB, which represents mining giant Vale, pulp maker Suzano and Whirlpool, among others, claims R$19.154 billion based on a study by University of Campinas (Unicamp) researchers, coordinated by Pedro Rossi. The analysis estimates a counterfactual exchange rate and calculates how much exporters lost between January 2010 and December 2011, reaching R$107.4 billion. Exporting companies in the processing industry are the most affected, followed by companies in the extractive and agricultural industries. As AEB represents almost 20% of Brazilian exporters, it calculated this percentage on top of the estimated total loss.

AEB’s claim for compensation is partial — it only considers the period of 2010 and 2011, not the entire range from 2008 to 2012 — because to draw up a full report the entity needs detailed data from the Central Bank or from the banks, which it has not yet been able to obtain. Now, in the lawsuit it asks that the report of the full period be produced and, therefore, the judge will have to determine the release of the data necessary for the economist to be appointed as a judicial expert for the production of the full technical report. Thus, it is likely that the current value of almost R$20 billion will rise further.

Based on the banks’ market shares at the time, most of the compensation sought by AEB would fell on HSBC (R$4.691 billion), Itaú (R$4.305 billion), Santander (R$3.834 billion), Citi (R$2.923 billion) and BNP Paribas (R$1.163 billion).

AEB lawyer Bruno Maggi says the case can take 12 to 15 years, but does not rule out the possibility of banks opting for judicial or extrajudicial settlements. “Still, so far we have not been sought to negotiate any agreement,” he said. He claims that the banks’ agreements with the Cade are an important confession that confirms the existence of unlawful acts and thus believes that AEB has a great chance of victory in the case.

In the lawsuit, AEB claims that currency speculation, despite generating negative effects on the formation of the exchange rate, does not constitute a competitive unlawful act. “However, after the speculative cycle that appreciated the Brazilian currency [between 2010 and 2011] and hurt exporters, currency manipulation processes were discovered in Brazil and abroad. In this context, speculation becomes illegal when coordinated between banks that work as partners to the detriment of competitors in the foreign exchange market, in an effort to push the exchange rate in the direction that would gain their bets,” says the organization.

AEB also points out that, even if the exchange contracts of its associates have been concluded with other banks, other than the defendants in the case, still the damage will have been configured, since the cartel affected Ptax, which is used by all banks in the financial system.

In its separate lawsuit, Petrobras filed suit against Santander, HSBC, PNB Paribas, BTG, Citi, Fibra, Itaú BBA and Société Générale. The company says that its activity in the foreign exchange market is daily and that between 2008 and 2012 it bought $201 billion and sold $191 billion in dollars with the investigated banks. “It should be stressed, however, that this impact was not only on the dollar – as one might think – but also on other currencies directly influenced by the American currency,” the company points out.

The oil company made an analysis of the sensitivity of the manipulation in the exchange rate and points out that in the case of its transactions to sell dollars, if the cartel had reduced the exchange rate by R$ 0.01, the company’s loss would be R$1.911 billion. If the change had been RS 0.10, the loss would rise to R$19.112 billion. In the case of dollar purchases, the effects would be R$2.505 billion and R$25.051 billion in the two stipulated scenarios.

Still according to Mr. Rossi’s study, which is also mentioned in the Petrobras lawsuit, in some moments the manipulation may have brought distortions of up to R$0.49 per dollar. “That is, although the true impact of manipulation on foreign exchange operations is not yet known, it can be seen that the amount of damage caused to the plaintiff was undoubtedly significant,” states the company in the lawsuit.

The 20 banks cited in the case were sought by Valor to comment. Bocom BBM, BTG, Barclays, Credit Suisse, Deutsche Bank, J.P. Morgan, UBS, Morgan Stanley, Société Générale and Bradesco declined to comment. Citi stated that it does not comment on ongoing issues in the judicial sphere, but reinforced “its conduct guided by full compliance with the legislation.” Santander stated that it has not yet been officially notified about the lawsuit, but says that “the case in question was already known, so much so that it was previously submitted to the competent authority, which is the Cade, to which the due information was presented.” Itaú stated that it has always acted in compliance with the legislation in force, “not having participated, under any circumstances, in illicit activities or activities that could cause losses to its clients. The bank will legally contest the accusation so that the truth prevails.”

BNP, Fibra, Inbursa, Standard Chartered, RBC and MFUG did not immediately reply to a request for comment. Royal Bank of Canada (RBC) and J.P. Morgan, despite being defendants in the case, do not appear in the table of indemnities because they did not have direct participation in the foreign exchange market in 2010 and 2011. Thus, the compensation they may be required to pay will be calculated in the final report prepared by the legal expert.

Source: Valor international


Major trading companies partner to create freight platform

SoftBank and Tencent-backed freight platform Manbang files for US IPO |  KrASIA

The world’s largest agricultural trading companies seek ways to cut costs and improve the efficiency of their operations amid investments to speed up production and consolidate a portfolio of higher added value. One front of this strategy is logistics. Thus, Louis Dreyfus Company and Amaggi decided to turn the road freight platform they created in 2019 into an independent company after U.S.-based Bunge made a similar move recently.

For this, the partners joined American giants Cargill and ADM and Mato Grosso-based Tip Bank, a payment processing company that operates in the industry for 15 years, to put together a full-fledged system of logistics and integrated management. The new, still unnamed company is equally divided by all partners and hits the market with two years of experience of Carguero, the original platform owned by LDC and Amaggi. The pilot project allowed to haul 17 million tonnes in 2020, in 500,000 trips, with a turnover of R$2 billion.

“LDC and Amaggi have invested R$50 million in technology over the last two years, but they needed robustness for the tool not to be restricted to matching truck drivers with shippers. The investment is expected to double in value in five years,” Luis Barbieri, an executive who left LDC two years ago to run Carguero, told Valor. According to him, ADM and Cargill have sought out LDC and Amaggi to join the project. Mr. Barbieri declined to talk about the fact that Bunge, the “B” in the group of large trading companies known as ABCD, was not involved in the project. “Each company has a different decision-making process.” Bunge created Vector, a similar platform, in partnership with Argentina’s Target.

The new platform’s great differential is the full management of agribusiness logistics instead of just showing cargoes, contractors and contracted parties. “Truck drivers can see shipments available for the next seven days, for example. They can apply several filters to search for cargo and, most importantly, we offer document scanning.”

Depending on the route and the cargo, drivers typically wait two or three hours to receive an invoice by email or must stop at a gas station, for instance, to issue the document.

The business model developed by Carguero does not differ much from other platforms such as Fretebras or CargoX, whose market shares are over 80% and 10%, respectively, by gross sales. The trucking company pays a service fee for hiring a truck driver or the shipper pays a fee for finding the trucking company. The truck driver is not charged anything.

“The trucking company has an operational cost to hire a driver of R$3 to R$9 per tonne. We believe that they will reduce this cost and their offer will increase if they use the platform,” Mr. Barbieri said.

By influence of the business partners, initially the new company will act preferentially in the transportation of grains and derivatives, sugar and fertilizers. Operations, for now, are restricted to Brazil.

The Carguero platform currently has 100,000 registered drivers who receive their pay through the Tip Bank prepaid card, whose Visa flag allows them to use it in a gigantic network of establishments in the country.

The Tip Bank, in turn, was founded by Amaggi executives in 2007, with the purpose of being an instrument for payments in the field. Currently, it has more than 1,000 accredited gas stations.

A study developed by the Logistics Extension Group of the “Luiz de Queiróz” College of Agriculture (Esalq/USP), released in January, shows that the road modal is responsible for between 67% and 69% of the grain transportation in the country, with an average trip for each load of 357 kilometers.

The new company needs approval from the Administrative Council for Economic Defense (Cade) and the Central Bank. This process is expected to take six to nine months.

Source: Valor international