Port of Itaqui in Brazil -

The Port of Itaqui, in Maranhão, will announce by the end of the year a R$500 million package of infrastructure investments for the next three years. The funds will come from the company’s cash, which, driven by grain exports from the region known as Matopiba (bordering the states of Maranhão, Tocantins, Piauí and Bahia) – and through the transport of liquid bulk, is experiencing a boom in private-sector investments.

After completing the acquisition of logistics company CLI from the group that owns Coteminas, in a $240 million deal including debt and equity, private-equity fund IG4 has already started studies for the third phase of the grain terminal operated by company.

The investment is expected to reach R$600 million, and the new infrastructure should start operating in up to five years, expanding by 6 million tonnes the current capacity of 15 million tonnes. “It could be an investment in storage, or a new berth, or both,” said Marcos Pepe Bertoni, chief operating officer at CLI.

The port is expected to end this year with a 20% growth in the volume of transported cargo, surpassing last year’s record of 31 million tonnes, said Ted Lago, head of Port of Itaqui. The dry bulk segment, represented by grains from the Matopiba region, represents 63% of the volume. The region is a large producer of soy, corn and cotton.

The remaining shipments in Itaqui are basically fuel and fertilizers. “Even with the pandemic last year, there was a record. And in the year to September, we transported the same as in the full year 2020,” said Mr. Lago.

Between 2015 to 2021, the company that manages the port, the state-owned Emap, has invested R$400 million in infrastructure. The injection followed more than R$1.6 billion in private-sector contribution in terminals in the period.

The port’s new investment package, for the period from 2022 to 2024, should include a new berth (where ships dock), the structural recovery of the pier and modernization of the ferryboat terminals. With the investments, Itaqui is expected to reach the capacity to transport 40 million tonnes a year by 2025.

Excluding the R$600 million that could be injected by IG4 in the expansion of the grain terminal, the private sector is expected to invest further R$800 million. That includes four liquid terminals already auctioned, three of them operated by Santos Brasil.

In addition, with the expiration of the concession for a liquid bulk terminal run by Petrobras, a new auction should be held in the second half of next year. The new company that will take over the concession, which may again be transferred to Petrobras, is expected to invest around R$300 million.

According to estimates by National Supply Company (Conab), the cultivated area will reach 8.4 million hectares in the 2021/2022 season, 2.6% more in 2020/2021. Production should reach 28.2 million tonnes, up 3.8%.

The growth of agribusiness in the region projected for the coming years adds to the expected improvement in the supply conditions of the terminals. According to Mr. Lago, private-sector companies are envisioning the works of the railroad Ferrovia de Integração Centro-Oeste, better known as FICO, which is still in its initial phase. The project will connect the cities of Mara Rosa, Goiás, to Água Boa, Mato Grosso. Mr. Lago says that this branch will allow the transport of another 6 million to 8 million tonnes of cargo to Itaqui.

In the North region, the port of Itaqui is the only one directly connected to a railroad, to the Norte-Sul.

Source: Valor international

Before taking office, the Jair Bolsonaro administration set a goal of increasing annual investments in infrastructure to R$250 billion by 2022. A survey by Inter.B Consultoria, however, shows that public and private investments in the area totaled R$115.2 billion last year, lower than the R$118 billion in 2019 and R$117.6 billion in 2018. In 2017 it was R$114.7 billion. This covers investments in the transport, electricity, telecommunications and sanitation sectors.

Source: Valor international

The government expects airline tickets to become cheaper starting in September as new rules allowing foreign companies to operate here to increase competition, Infrastructure Minister Tarcísio Gomes de Freitas says. He talked about a “supply shock” with the arrival of such companies as Air Europa, a unit of Spanish group Globalia, the first foreign airline authorized to operate in Brazil following regulatory changes, and claims there are “three or four” low-cost carriers interested in the country. He adds that domestic players are already ramping up fleets to face the competition.

Source: Valor Econômico


Private-equity firm Casaforte is raising R$100 million from investors in an infrastructure equity fund and borrowing R$170 million from development lender Bank of the Northeast (BNB) to build solar-power farms in the Northeast region and Minas Gerais state. The Pernambuco-based firm plans to build 12 solar farms generating 5 megawatts each for rental by large power consumers. It already signed up a telecommunications company for a 15-year contract. “We are in the closing stages of other contracts with retail chains, supermarkets and drugstores,” founding partner and manager Fernando Burque said. The four-to-five-year infrastructure fund, called Solar 1, has already raised R$70 million. The plan is to start selling the solar farms to other investors already with the assured revenue stream of rentals.


Source: Valor Econômico

The man in charge of Brazilian sugar giant Cosan Ltd. has little interest in talking about the sweetener. These days, he’s all about railways, writes Bloomberg in its latest report. Cosan is controlled by 69-year-old Rubens Ometto, one of the sixty most powerful men in Brazil.

The business that gave life to Cosan — the world’s biggest sugar-cane operation — has been stuck in the doldrums following years of depressed global prices and government policies that curbed the expansion of cane ethanol in Brazil. In stark contrast, the commodity powerhouse is ready to invest “tens of billions” in a plan that will reshape how the nation’s crops get transported, Chief Executive Officer Marcos Lutz said.

“Brazil infrastructure is now the hot story in commodities,” the 49-year-old executive said in an interview with Bloomberg at Cosan’s headquarters in São Paulo.

The South American nation — with its vast swaths of arable land along with abundant water resources and ample sunshine — is already the world’s biggest exporter of agricultural goods from beef to soybeans, and expansion is likely to continue, Lutz said.

That means even more pressure on infrastructure and logistics that have seen chronic problems under the weight of the farm boom. “We see a clear opportunity that derives from a long winter of under-investment,” he said.

Railroad that will Connect Port Terminals in the Northern and Southern Regions.

Cosan has been at the center of Brazil’s push for investments in train transportation. President Jair Bolsonaro’s government is seeking to double the country’s railway capacity through concessions that will demand about R$25 billion (US$6.3 billion) in capital expenditures over the next few years.

Last month, Cosan-owned Rumo SA won a first auction to complete and operate 955 miles (1,537 kilometers) of railroad that will connect port terminals in the northern and southern regions. The railway is planned to be the eventual spine in a network of lines sprawling across key crop-producing states.

Rumo is also in the final stages of a concession renewal process. The terms include more than doubling the annual capacity of the railway known as Malha Paulista, which connects Brazil’s largest port to the nation’s agricultural heartland. Rumo will spend as much as R$ 15 billion in CapEx through 2023, while “several” other investment opportunities are being considered, Lutz said.

“We’re talking about investments of a magnitude that have never been seen in Brazil’s railway sector,” he said.

The bet has won over investors. Rumo’s market value has jumped fourfold since April 2016 to about $7 billion, the most among global peers. The rail operator is now worth more than Cosan SA, the Sao Paulo-listed company that controls the group’s energy businesses, and its bonds trade above par. Both units are under Cosan Ltd., which is listed in New York.


Source: The Rio Times

Brazil stands to be one of the major beneficiaries of the China-proposed Belt and Road Initiative (BRI), which is in line with the government’s economic development plan, Brazilian expert Xia Huasheng has said.

The Belt and Road cooperation with China helps boost Brazil’s agricultural exports and attracts investment for infrastructure construction from Chinese multinationals, which brings resources, experience and technology, Xia, a professor of finance at the Sao Paulo School of Business Administration under the prestigious Getulio Vargas Foundation (FGV), told Xinhua in a recent interview.

“Within the framework of the Belt and Road Initiative, the majority of projects are related to infrastructure,” he said, noting strengthening infrastructure is essential to Brazil’s economic recovery.

“The new Brazilian government wants more investment in infrastructure projects,” he added.

Xia said the BRI is also in line with the pro-market policies of Brazilian President Jair Bolsonaro, who took office on Jan. 1.

“The participation of Chinese multinationals is essential” to bilateral cooperation, because they not only invest in the government’s infrastructure projects, “but they also take a series of measures to increasingly become local companies with greater interaction with Brazilian companies, and generate jobs and benefits for the country,” Xia said.

In his opinion, the Belt and Road can help open up markets and promote a greater “involvement” of the private sector in participating countries.

“Heavy investment by the government is very important to laying the foundation of this initiative, which is now more mature,” he said. “The moment has come for private companies and banks to take advantage of this opportunity to do business and generate benefits.”

He said he believes that the market forces of supply and demand within the context of globalization will prompt industrial, agribusiness, manufacturing and trade centers to be built along the Belt and Road, and gradually, greater interaction between such businesses will further expand the initiative.

Through the initiative, goods and services from different regions can be traded at lower logistical costs, he said, and more jobs are meanwhile created, technology promoted, and living standards improved, especially of the people previously marginalized by globalization.

Since its launch in 2013, the China-proposed BRI has involved more than 100 countries, making it a factor in promoting mutual benefit on a global scale and an important platform for international cooperation, said the academic.

In Brazil, researchers are closely following the developments of the BRI, he said.

China has remained Brazil’s largest trading partner since it took the place of the United States in 2009. In 2018, bilateral trade hit a record 100 billion U.S. dollars, official data showed.