Leaders in the sector in Brazil, who announced investments of R$3.8bn in 2023, will prioritize industrial projects in new disbursements totaling R$7.4bn

04/29/2024

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Fernando Degobbi — Foto: Divulgação

Despite a profitability decline in 2023, due to commodity price fluctuations, agribusiness cooperatives remain keen to invest—particularly in industrial projects aimed at adding value to their products. Among the largest cooperatives in the sector, Coamo, Lar, Aurora, Comigo, Cocamar, C.Vale, Frísia, and Coopavel have announced this year that they will invest R$7.4 billion in the industrial segment, according to data from Valor Data. In some cases, these investments will continue until 2026. Last year, these cooperatives announced investments of R$3.8 billion.

The increase in investments, even amid a depreciation of key products for the cooperatives, such as soybeans, will be possible thanks to their strong results in previous years. “The cooperatives are being called upon to use their reserves or seek financing to support the planting of the harvest or the expansion of the business, in light of the profitability loss of the members,” said Fabio Silveira, managing partner at MacroSector.

According to the economist, in 2024, the margins of the cooperatives will remain pressured by the low price of grains, the crop failure in Brazil, and the decrease in Chinese imports of meat. In 2023, the operating margin of the 15 largest cooperatives in the country dropped by 1.4 percentage points to 4.8%, and the net margin by 1 percentage point to 3.4%.

Coamo will disburse R$3.5 billion between 2024 and 2026, the largest investment announced this year. Last year, the country’s largest agricultural cooperative invested R$569.7 million in a feed mill, warehouses, and offices. Of the volume forecasted for the current triennium, the cooperative will allocate R$1.67 billion to a corn ethanol plant capable of processing 600,000 tonnes of grain a year. It will also build four warehouses, add 500,000 tonnes to its storage capacity, and modernize processing units.

Goiás-based Comigo will invest R$1.3 billion by 2026 in an industrial plant in Palmeiras de Goiás with the capacity to process 5,000 tonnes of soybeans daily. The plan includes a terminal on the North-South Railway, with a capacity for loading 80 wagons per month, and forest planting for wood production to fuel the industry’s boilers. “We are waiting for the permits to start the construction. The expectation is that it will be operational by 2027,” said Antonio Chavaglia, Comigo’s chair.

Cocamar, which invested R$315 million in 2023, announced this year that it will make investments of up to R$1 billion. Half of this amount will be used to expand by 50%, to 1.5 million tonnes per year, the soybean crushing capacity at the factory in Maringá, Paraná. The rest will be used to increase storage capacity.

After R$2.7 billion invested over the past three years, Aurora announced investments of R$783.4 million in 2024. The resources were for expanding and upgrading factories and for purchasing industrial plants. This month, Aurora inaugurated a meat processing unit in Chapecó, Santa Catarina, that consumed R$587 million in own resources and financing from the Brazilian Development Bank (BNDES/Finep).

C.Vale will expand its feed production capacity to meet the demand of its members, mainly for feeding chickens, according to the cooperative’s president, Alfredo Lang. In 2023, C.Vale completed an investment of R$1 billion in a soybean crushing unit in Palotina, Paraná, with a capacity to process 60,000 sacks of soybeans a day.

Together with Amaggi and Tecnobeef, Coopercitrus is investing an undisclosed amount to create a company that produces organomineral fertilizers in Altair, São Paulo, with a capacity of 200,000 tonnes annually. “This year, we are focused on consolidating our business and vertical integration in organomineral fertilizers, in line with our sustainability goal,” said Fernando Degobbi, CEO of Coopercitrus.

Castrolanda and five other cooperatives—Agrária, Bom Jesus, Capal, Coopagrícola, and Frísia—invested R$1.5 billion between 2021 and 2024 in the construction of Maltaria Campos Gerais, which can produce 240,000 tonnes of malt per year and is expected to be inaugurated next month.

The cooperative will also start the operation of Queijaria da Unium, a cheese factory joint venture with Frísia and Capal. The project included an investment of R$460 million in the unit, which will be able to produce 96 tonnes per day. “We consider this a year of preparation for sustainable growth,” said Willem Berend Bouwman, Castrolanda’s chair. The disbursements from Castrolanda were not included in the total of the projects because they involved resources from cooperatives that were not part of the group analyzed by Valor Data.

With these investments, the cooperatives aim to sell products with higher added value, thereby improving their profitability. In 2023, according to Valor Data, the net income of 15 of the largest national agricultural cooperatives fell by 23.6%, to R$6.08 billion.

*Por Cibelle Bouças — Belo Horizonte

Source: Valor International

https://valorinternational.globo.com/