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Appian invests R$350m to explore graphite

If the operation proves viable, the fund’s investments in the country could reach R$1.5bn

05/29/2024

Paulo Castellari — Foto: Gabriel Reis/Valor

Paulo Castellari — Foto: Gabriel Reis/Valor

Appian Capital, a British investment fund focused on mining projects, is investing an additional R$350 million in Brazil to enable graphite exploration. Considered a critical mineral, graphite is essential for battery production, with 70% of the global supply currently sourced from China. If the initial operation confirms its viability, the fund’s investments in the country could reach R$1.5 billion over the next five to eight years.

With these resources, Appian will establish a demonstration unit—a pilot mineral beneficiation operation—with a production capacity of 5,500 tonnes of graphite per year at the Boa Sorte mine in Itagimirim, Bahia. Additionally, it will develop two technical studies in areas controlled by Graphcoa, a joint venture managed by the fund, which has nine mining projects spanning southern Bahia and northern Minas Gerais.

According to Paulo Castellari, CEO of Appian Capital Brazil, two of the fund’s nine global mining projects are located in Brazil. “Brazil has been an area of significant interest since 2019,” he said. At that time, Appian invested in Atlantic Nickel, which produces nickel in Bahia, and Mineração Vale Verde, a copper operation in Alagoas.

The fund is focused on materials that can aid in the energy transition, such as copper, nickel, and lithium, which are used in the positive pole (cathode) of batteries. However, they also see potential in graphite, as there is currently no economically viable substitute for this mineral used in the negative pole (anode) of batteries. “What lies ahead for graphite is fascinating,” he said.

Mr. Castellari anticipates being able to decide on the next phases of the project in Brazil, aiming for 25,500 tonnes annually, by the first half of next year after conducting tests and certifications with potential clients.

In the future, the installed capacity in the Brazilian operation could increase to 40,000 tonnes, potentially reaching 65,000 tonnes by exploring two of Graphcoa’s nine areas. “It could be the largest graphite project in the country,” said Mr. Castellari.

Currently, Brazil’s graphite production represents less than 2% of the global volume, even though the country holds deposits equivalent to a quarter of the world’s reserves. The global supply of graphite is around 1 million tonnes per year and is expected to reach 3.7 million tonnes by 2030. China’s share, which currently accounts for more than half of the production, is projected to decrease to 30%, Mr. Castellari notes.

On the demand side, a deficit is anticipated. Today, 2 million tonnes are consumed annually, with 1.4 million tonnes used for batteries. By 2030, consumption is expected to rise to 4.6 million tonnes, exceeding the projected supply.

With potential clients both domestically and internationally, the strategy is to assess the feasibility of verticalizing operations, possibly extending to battery production in the future. “The investment is not only in the use of batteries for vehicle electrification but also in general,” he said.

*Por Stella Fontes — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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BNDES, Petrobras earmark R$44m for mangroves

Matchfunding was launched at COP26 last year and is expected to raise R$686m

11/17/2022

Bruno Aranha — Foto: Leo Pinheiro/Valor

Bruno Aranha — Foto: Leo Pinheiro/Valor

Brazilian development bank BNDES and Petrobras announce on Thursday, at COP27, in Egypt, the first call for proposals of the Floresta Viva (Forest Alive) program, a collective financing program for the restoration of Brazilian forests and biomes. The initial selection, of R$44.4 million, will invest in up to nine projects in the area of mangrove and sandbanks restoration on the coast of the country.

The match funding led by the BNDES was launched at COP26 last year and is expected to raise R$686.27 million through the adhesion of 15 companies and the bank’s own contribution of R$250 million. Each company participated with a slice and only Petrobras, the main partner, committed to injecting R$50 million over five years. Besides the oil company, mining company Vale and transnational companies such as Heineken and Nestlé, whose adhesion was announced at COP27, are also participating, said Bruno Aranha, the bank’s head of environment credit.

The project’s first call for proposals is aimed at non-profit civil associations, private foundations, and cooperatives. In this first phase, the proposals must contemplate the restoration of at least 200 hectares of area, a total of 1,800 hectares of mangroves and sandbanks located in the three macro-regions defined in the National Action Plan for the Conservation of Threatened Species and Socio-Economic Importance of the Mangrove Ecosystem (PAN Mangrove), prepared by the Chico Mendes Institute for Biodiversity Conservation (ICMBio). They are the so-called North Coast, as well as the area from the Northeast to Espírito Santo and the South and Southeast.

The amount of almost R$50 million will be divided equally between BNDES and Petrobras. According to the social responsibility management of the oil company, the contracts are expected to be signed in the first quarter of next year. Those interested have until January 31 to submit proposals. Institutions that have been legally constituted for at least two years and have proven experience in executing ecological restoration projects are eligible to participate.

“The projects can be certified for the emission of carbon credits and the intention is that they will be distributed among the partners in proportion to their donations. In this sense, the fund allows a great laboratory for national and international companies about the certification process of projects for carbon credit emission”, explains Mr. Aranha.

According to the general manager for social responsibility at Petrobras, Rafaela Guedes, it was in this context that the commitment between the oil company and the development bank was made. She highlights the importance of mangroves, a transitional ecosystem between the terrestrial and marine environments, with great potential for carbon storage. The vegetation — which is also a source of income for local communities — suffers from intense degradation due to the intense economic and real estate exploitation of the Brazilian coast.

To select the projects and monitor the application of resources, Petrobras and the BNDES selected the Brazilian Fund for Biodiversity (Funbio) as the professional manager of the project through a public call concluded in April. The contract is for seven years, a term that can be extended with new partners are added.

*By Paula Martini — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/

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Iguá seeks R$3bn investment with new partner

Sanitation company has already hired Bradesco BBI and Morgan Stanley to find investors

11/08/2022

Deals will help Iguá leave behind turnaround process and consolidate itself as one of the largest players in the sector — Foto: Divulgação

Deals will help Iguá leave behind turnaround process and consolidate itself as one of the largest players in the sector — Foto: Divulgação

Sanitation company Iguá has hired Bradesco BBI and Morgan Stanley to find a new partner. According to three market sources, the mandate for private placement is already in place, aiming for a primary transaction of R$2.5 billion to R$3 billion ($500 million), in a minority position that could reach a shared control.

Banks and the company have started conversations with at least four potential investors: the U.S.-based fund Ontario Teachers Pension Plan (OTPP), Canada’s CDPQ, and the Brazilian groups Votorantim and Equatorial, sources told Pipeline, Valor’s business website.

Iguá’s shareholders are the Canadians CPPIB and Aimco, and the management company IG4, investors with cash to finance the company. BNDESPar, the Brazilian Development Bank’s equity arm, is also a shareholder. The participation of the current partners in the capitalization is not ruled out, sources say. “They are looking for this capital from a new investor as a minimum amount, but they say they can follow up,” said a source that had access to information on the capitalization process

The company set the beginning of November as the deadline for non-binding offers, sources say.

The final amount will depend on the type of opportunity Iguá finds. The goal of the capitalization is to prepare the company to compete in new concessions and potential privatizations, such as Corsan, Copasa, and Sabesp — an expectation of the sector considering the elected governments in the respective states. But the company’s interest in buying competitor BRK Ambiental is no secret.

BRK is controlled by Brookfield and FI-FGTS, the investment arm of the Workers’ Severance Fund, and had been giving preference to an IPO. There have already been two attempts to launch the offer, but with no progress given the market conditions. Brookfield seems to have changed its mind about the outcome for the asset — the fund would have authorized Itaú BBA to sound out potential buyers, according to two sources, but one of them says there is no formal mandate yet.

Some of Iguá’s shareholders prefer not to have the complexity of the FI-FGTS on the board, which means that a deal will only happen in a full transaction. Another operator that may place a bid for BRK in case the shareholders decide to follow through with a formal process is Aegea, which has Equipav, GIC, and Itaúsa as shareholders, as well as potential interest from infrastructure funds. The current management of the federal bank is sympathetic to the idea, but next year, everything can change — which also explains Iguá’s timing.

The private placement is one of three mandates Iguá is putting in place, according to market sources. The company would also have already hired BTG Pactual, Bradesco BBI, and Itaú BBA to issue R$5 billion in infrastructure debentures, a debt that will pay off part of the bridge that the concessionaire took to take a piece of the Cedae operation, in Rio de Janeiro, and lengthen its liabilities.

On the selling side, Itaú BBA has sought interested parties in 11 small concessions from Iguá, which wants to focus on larger operations. The assets for sale are concessions in cities with less than 500,000 inhabitants, in Santa Catarina, Mato Grosso, and São Paulo, and the bank has offered potentially interested buyers the closed package — estimated between R$500 million and R$600 million, sources told Pipeline.

On the three fronts, the company can raise between R$8 billion and R$9 billion in total for its market consolidation strategy. Iguá declined to comment.

The deals will help Iguá leave behind the legacy of a company in turnaround to consolidate itself as one of the largest in the sector. When IG4 bought CAB Ambiental from Galvão Group, the concessionaire posted an EBITDA of R$175 million.

The asset manager attracted Canadian funds to the company, including an investment last year in the competition for Cedae. An industry analyst estimates that, with the operation in Rio, the annualized EBITDA is around R$1 billion today.

*By Maria Luíza Filgueiras — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Gerdau targets electric vehicles market

Group invests R$700m to produce purer steel, reduce costs and emit less CO2

10/10/2022

To modernize its technology, obtain productivity gains, and be in line with the new demands for steel with the quality required by the electric mobility industry, Gerdau is setting in motion a R$700 million investment in its Specialty Steel unit in Pindamonhangaba (state of São Paulo).

The specialty steel, unlike the long carbon steel used in construction, has as its main destination the automotive market – in Brazil, the largest share goes to heavy vehicles (trucks and buses). But it also supplies light vehicles. This market represents 80% of sales, via auto parts, auto parts manufacturers, and assemblers. The remainder 20% goes to industrial applications and wind power.

With the investment, the company installed new steel production equipment, whose essential raw material is specialty steel scrap coming both from end-of-life material and from generating sources (leftovers from customers’ industrial lines and others).

“The company is preparing and bringing forward, the new scenario in the automotive industry, with hybrid and electric vehicles. We cannot let a steel shortage happen,” says Rubens Pereira, vice president of Gerdau’s Specialty Steel division in Brazil. Furthermore, automakers are beginning to seek local or regional sources for parts supply, in order to avoid problems such as the lack of chips.

The investment includes the construction of a new building and the installation of state-of-the-art equipment, with a high level of automation, for the production of billets and blocks. “We are now making a much purer steel [clean steel] which, in addition to lower costs and higher productivity, has lower carbon emissions,” says Mr. Pereira.

“At Gerdau, we are following the evolution of demand and the technological transformation of the automotive segment. In recent years, the company has undergone a profound cultural and digital transformation, which has made it even more people-focused, digital, innovative, diverse, and inclusive,” says Gustavo Werneck, Gerdau’s CEO.

With these investments – in Pindamonhangaba, Mogi das Cruzes (state of São Paulo), and Charqueadas (Rio Grande do Sul) – the group is modernizing its specialty steel facilities in Brazil, in a R$1 billion package. Other investments will come in the next two to three years, concluding the program in 2025. Pindamonhangaba’s technological upgrade is aligned with the future perspectives of increasing the mix of electric and hybrid vehicles in Brazil, highlights Mr. Pereira.

Mr. Pereira, an electronic engineer with a degree from ITA (Aeronautics Institute of Technology) and an MBA from MIT (Massachusetts Institute of Technology), came to Gerdau two years ago. He built part of his career in consulting firms (Booz Allen and BCG). After that, he spent 14 years at Cargill and two at BRF.

The Pindamonhangaba unit, which was founded by Aços Villares several decades ago, now has a crude steel capacity of 700,000 tonnes per year, employing 2,300 people. This investment, says the executive, reinforces Gerdau’s presence in its markets, with an optimistic vision for the country’s automotive sector. “In the medium and long term, the sector will recover its production levels recovered.”

The Specialty Steel division accounts for about 15% of Gerdau’s total revenues. In the first semester, sales of 843,000 tonnes generated revenues of R$6.87 billion, adding the operations in Brazil and the United States together. The business, in Brazil, represents almost 50% of the division. The U.S. operations, which also have three steel factories, account for a little over 50%.

According to Mr. Pereira, from 15% to 20% of the production in the three Brazilian factories is exported, mainly to Argentina (half of the shipments), where important automotive clients are located. The other part goes to the U.S., Mexico, and Europe.

*By Ivo Ribeiro — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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WEG to invest R$660m in capacity expansion in Brazil

Project will increase company’s production capacity of industrial engines by up to 25% in Jaraguá do Sul

09/28/2022

WEG’s factory in Brazil — Foto: Chan/Divulgação/WEG

WEG’s factory in Brazil — Foto: Chan/Divulgação/WEG

Brazilian motor maker WEG will invest R$660 million (around $120 million) over the next three years to expand its production capacity of industrial motors and electric traction in Brazil. The reason, according to the company, is to serve the Brazilian market and the units abroad with components.

In addition to the expansion of the component factories and export logistics building, the Santa Catarina-based company will also build a new plant aimed at the production of industrial motors and, especially, motors to serve the electric mobility segment.

The project will be carried out at the company’s industrial site in Jaraguá do Sul and will increase its production capacity of industrial engines by up to 25%. Alberto Kuba, WEG’s managing director of industrial motors, told Valor that the investment expands the manufacturing capacity to meet the demands of assembly lines and commercial subsidiaries abroad, and provides strong capacity in Brazil to meet the growing demand for electric mobility.

“The worldwide scenario, with the pandemic, and more recently the war in Russia, brought some market instabilities in which WEG was able to capture a good number of new clients. The European market, for example, which is largely supplied by the Asian markets, had problems with the logistical crisis, lack of materials, and in Brazil, we were able to deal with this very well,” he said.

The company is now the largest manufacturer of electric motors in the world and produces about 2 million motors per year in Jaraguá do Sul. But the company reached the limit of its capacity in Jaraguá after expanding its market share. As a result, the company decided to expand production capacity to 2.5 million engines per year by 2025.

The plan is to prepare WEG Motors here in Brazil to meet the demand to be seen in the coming years for electric traction. The capital expenditure on components and industrial motors aims to serve both the local and the international markets.

“The project has two reasons. The first one is supplying units abroad with components, such as the new factory in India, the factory in Turkey, and Mexico, which buys part of the components from Brazil. In addition, WEG has been working in the electric mobility segment and we will increasingly focus on the bus, truck, and commercial vehicle business. We are seeing a growing demand and we understand that electrification will make this market grow even more,” he said.

Mr. Kuba said that the electric motor business has received important investments over the last 10 years. The company has already invested $125 million in China, $215 million in Mexico, and $20 million in India. Plus, a $23 million investment is in progress in Portugal.

Initially, the investment will be made with the company’s own capital because of rising interest rates and the cost of capital in Brazil, which is still very high, but the company considers the possibility of seeking financing if market conditions improve.

The project will generate around 800 jobs, and the new factory for industrial and traction motors is expected to be ready by the first quarter of 2024. The building will have nearly 18,000 square meters of built-up area and will be designed to allow for a gradual and continuous increase in production capacity and to meet the company’s expansion needs over the next few years.

The plan also includes the updating and modernization of the existing components and logistics plants, totaling an expansion of nearly 23,000 square meters of built-up area to support the projected demand.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/business
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Pulp, paper industry ignores crisis and invests over R$63bn

Suzano, Klabin, CMPC and Arauco are sector’s heavyweights in investments

09/21/2022

Aires Galhardo — Foto: Silvia Costanti/Valor

Aires Galhardo — Foto: Silvia Costanti/Valor

Brazil’s pulp and paper industry continues to ride out global economic turbulence and increase investments. In addition to the R$60.4 billion already announced for expansion projects and new mills until 2028, including wood panels, Valor has learned that there are at least more R$3 billion planned for the current growth cycle, consolidating the sector among the largest private-sector investors today.

Among a dozen projects announced or under execution are heavyweights of the global industry, such as Suzano, Klabin, CMPC and Arauco. The largest of them is Suzano’s Cerrado, with a total capital expenditure of R$19.3 billion — of which R$14.7 billion on the industrial front.

In Ribas do Rio Pardo, Mato Grosso do Sul, the company is building the largest single pulp line in the world, with an output capacity of 2.55 million tonnes per year and economic and social development throughout the region.

“It is a transformational project, with wealth generation that goes beyond pulp production,” said Aires Galhardo, Suzano’s head of pulp operations, engineering, and energy. Located about 100 kilometers away from Campo Grande, the municipality has 25,000 inhabitants. When operational, the plant will employ about 3,000 workers, including third-party employees.

One investment not yet reflected in the official estimate of the Brazilian Tree Industry (Ibá) is the installation of four tissue paper machines supplied by Asian company RGE (Royal Golden Eagle) in the country. Bracell, the group’s pulp production arm, confirms the plans but does not reveal the size of the investment.

“In Brazil, the company will have four Andritz tissue machines, with an output capacity of 240,000 tonnes per year. This operation is expected to start as of the second quarter of 2024,” he said, in a note to Valor. According to a source from the sector, a tissue line of 60,000 tonnes per year should demand investments of more than $100 million.

RGE is also building two tissue projects in China. In all of them, it will use pulp produced in its plants in Brazil and Asia as raw materials.

Ibema’s likely investment in a new pulp (BCTMP) mill in Turvo, Paraná, was not incorporated into the official projection as well, since the paperboard manufacturer is still conducting feasibility studies. “Those projects are expected to get off the drawing board,” says an industry source.

Availability of area, short cycle for wood cutting, and favorable soil and weather conditions are among the factors that sustain the country’s inclination toward the forest-based industry. Although Brazil is naturally benefited by those conditions and by a large territory favorable to the activity, the sector also has its own merits, said Marcelo Schmid, managing partner of Index.

“We were able to improve tree genetics and productivity, the performance of operations throughout the production chain, and the management of the activity, with cost reduction, state-of-the-art technology, and respect for the most demanding sustainability standards. These factors together make Brazilian pulp the most competitive in the market and explain the sector’s great attractiveness,” says the specialist.

With operations scheduled to start in the second half of 2024, Suzano’s new mill will be self-sufficient in energy, from a renewable source, and export about 180 average megawatts to the power grid, enough to supply a city of 2.3 million inhabitants for a month.

According to Mr. Galhardo, the construction works of the Cerrado project is already 25% completed. Every day, 50 new workers are hired at the site, and 10,000 will be involved at its peak.

For 2022, Suzano projects disbursements of R$7.3 billion for the project. So far, according to the executive, there is no expectation of a revision of the budget (capex), despite the rise in commodity prices and the advance of inflation. “We managed to close the negotiation in euros. Some commodities became more expensive and had an impact. But, at the same time, the euro depreciated,” he said.

To ensure that logistical hurdles do not affect the on-time delivery of the contracted equipment, the company has a permanent team in China and another on the way to Europe. “The biggest fear was with the logistics issue, but we are managing to ship the equipment,” he added.

According to the executive, projects of this magnitude need to go beyond the plant to be successful: besides the counterparts agreed with the authorities, it is necessary to ensure everything from accommodation and food to health care and education, both during the construction period and after the start of operation.

On this front, for example, Suzano will build a new hospital in the region, which will be transferred to a private-sector operator. In addition, the company is already in talks with private schools to set up a new education center.

*By Stella Fontes — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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São Paulo toll road auction expected to draw investors

New contract provides for investments of R$10.4bn in construction

09/14/2022

Tarcila Reis Jordão — Foto: Silvia Zamboni/Valor

Tarcila Reis Jordão — Foto: Silvia Zamboni/Valor

The government of São Paulo is expected to hold the Noroeste Paulista lot auction this Thursday. It is the new bidding of two toll road concessions that are coming to an end: Tebe (controlled by engineering companies) and Triângulo do Sol (owned by Bertin and the Italian group Atlantia).

The lot includes 600 kilometers of roads, which connect cities such as São José do Rio Preto, Araraquara, São Carlos and Barretos. In all, the new contract foresees R$10.4 billion in capital expenditure in construction, in addition to R$4 billion in operating costs over the course of the 30-year contract.

Among the main interventions, 123 kilometers of road dualling, 99 kilometers of third lanes, 42 pedestrian overpasses, and others are planned. “The new concession is a mature asset from the standpoint of demand, but it needs to expand its capacity,” said Tarcila Reis Jordão, São Paulo’s deputy secretary of partnerships.

In the market, the forecast is that there will be at least one person interested in the asset. The São Paulo government believes there will be competition. “The expectation is very positive. There is a prospect of two to four bidders, which is very relevant for a R$10 billion investment project, on the eve of an election and after all these input price variations. We are excited,” Ms. Jordão said.

Pátria is pointed out as a strong candidate, due to the synergy that would exist with the road network already operated by the company. Last week, CCR told Valor that it would “most likely” compete for the asset. Ecorodovias has also hinted to the market about its interest in the project, although its high level of leverage is seen as a possible obstacle.

Besides these groups, Arteris and Acciona have analyzed the asset, according to sources. Arteris could also see synergies, but has not participated in auctions for years and was put up for sale by its shareholders, which reduces any expectation about it.

Ecorodovias said it seeks “projects that have synergy with the concessions portfolio and are aligned with sustainable growth guidelines.” Arteris says it “evaluates opportunities for new projects that fit the requirements of risk-return required by its shareholders.” Pátria and Acciona declined to comment.

A factor that helps to make the concession attractive, according to analysts, is that tolls are already charged on the highways, in addition to a known traffic history, which reduces the risk of demand and guarantees revenue generation since the beginning of the contract.

“The fact that these are highways that were in the hands of two concessionaires is well regarded. Besides the question of demand, there is more security in relation to the conditions of the roads than if they were operated by public agencies,” said Letícia Queiroz de Andrade, a partner at the law firm Queiroz Maluf.

Caio Loureiro, a partner at the law firm TozziniFreire, the perception that this is a low-risk project could even attract the participation of a new entrant.

In the bidding, the winner will be the one who offers the highest fixed concession payment, whose minimum value was set at R$7.6 million. In addition to this initial payment, the contract provides for a variable disbursement of 8.5% of gross revenue.

The funds from the variable fee should be mostly destined for an account that will serve as a “safety cushion” to mitigate the risks of toll default. The project foresees free-flow toll collection. In this system, there are no toll plazas, and the fee is collected electronically (through gantries), according to the distance traveled. The transition from the physical plazas to the system will take seven years.

The new concession foresees a 10% reduction in the value of the tariff in relation to the prices currently charged. For vehicles that use toll tags, there will be another 5% reduction. Besides this, the project foresees additional discounts for frequent users.

According to analysts, this auction will not necessarily be the last major highway bid this year. Mr. Loureiro, with TozziniFreire, points out that there are still expectations regarding other relevant federal projects: the auction of the BR-040 highway, between Minas Gerais and Rio de Janeiro; one or two lots of the Paraná highways; and the BR-381 highway, in Minas Gerais.

For Ms. Queiroz, the greatest demand today is for medium-sized projects, not large auctions. “The market is heated, there is interest mainly in smaller projects, in the states,” she said. Today, however, these initiatives are affected by the elections, which cast doubt on the continuity of the concessions.

*By Taís Hirata — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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BN Engenharia diversifies businesses, joins heavy construction

First infrastructure project is expected to be in the electric sector

09/12/2022

João Antonio Mattei — Foto: Divulgação

João Antonio Mattei — Foto: Divulgação

BN Engenharia, Bueno Netto group’s construction company, is getting ready to enter the infrastructure sector. João Antonio Mattei, the company’s managing director, says the company is expected to work mainly in basic sanitation, logistics and energy. The first works are expected to be for the electric sector, the executive said.

The company plans to operate in private works and in PPPs (Public Private Partnerships). According to the company, there is no fear that the result of the presidential election will weaken the number of contracts in infrastructure made by the private sector. In 2021, 68.8% of the investments in the area were made by the private sector, according to consulting firm Inter.B.

BN is structuring the team to work in infrastructure projects, and has hired the engineer Lucas Guimarães, former Cesbe’s country manager in Peru, to head the new business development sector.

Currently, the company works with residential and corporate buildings, as well as hospitals and distribution centers, among other projects. Last year, BN grossed R$630 million, and Mr. Mattei expects revenue to reach R$700 million this year. According to him, the company already has a portfolio of projects to exceed this amount by 2023.

About half of the revenue comes from work for Benx, Bueno Netto group’s developer. BN and Benx have operated separately since 2011. Mr. Mattei points out, however, that the construction company does not do all the construction work for the developer: nearly 25% of the projects go to other construction companies, because they have a lower budget.

In the residential segment, BN prefers to operate in larger, high-end projects. The company is building Parque Global, a R$900 million project by Benx and Related Brasil in São Paulo’s south region. This amount can double if BN wins the bid to also build the hospital and the shopping mall planned in the development. “We are confident,” says Mr. Mattei.

Mr. Mattei says he had been planning to enter the infrastructure sector since 2019, when he realized there was space left by the large construction companies that were targeted by anti-corruption task force Car Wash.

“The infrastructure sector lacks healthy engineering companies,” he says. BN recently earned the B Corp Certification, awarded to ventures that put in place ESG practices. Three years ago, however, the group’s board did not accept the idea. This position changed at the end of 2020, when BN started planning to enter the heavy construction segment.

The company wanted to buy a construction company with experience in infrastructure, but the project did not go ahead. The search for acquisition left contacts that Mr. Mattei hopes to use in future works. “We can form consortiums,” he said.

*By Ana Luiza Tieghi — São Paulo

https://valorinternational.globo.com/
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Diamante to invest R$5bn in gas-fired thermal power plants

Company announced joint venture with Qatar’s Nebras Power to invest in two projects in Santa Catarina

09/09/2022

Pedro Litsek — Foto: Divulgação

Pedro Litsek — Foto: Divulgação

Diamante Geração de Energia unveiled a joint venture with Nebras Power, an international energy investment company and a subsidiary of Qatar Electricity & Water Company (QWEC), to invest R$5 billion in two natural gas thermoelectric projects in Santa Catarina. Last year, the company had already acquired the 857 MW complex Jorge Lacerda, in Santa Catarina, from Engie Brasil Energia for R$325 million.

The first project foresees the construction of the Norte Catarinense thermoelectric plant, a 600 MW project bought from Engie, with investments of up to R$3 billion. It is expected to be located in Garuva. The second is a 440 MW generation unit, which will be set up inside the Jorge Lacerda thermoelectric plant, with an investment of up to R$2 billion.

Engie CEO Pedro Litsek said that in the joint venture, each party owns 50% of the projects and will jointly explore investments in the gas thermoelectric plants. According to him, the equity in these projects will be divided equally between the companies, with 30% of the total investment being made with their own capital.

“The first [project] is more prepared to participate in auctions, which is the Norte Catarinense thermoelectric. We already have the permit, land, and everything that is needed. The second project is in the final stages of the environmental permit within the Jorge Lacerda complex, and we hope to have this permit by the end of the year,” Mr. Litsek said.

The investment is conditioned on a guarantee of new revenues, should the company win the capacity auctions scheduled for 2023. The construction of the thermoelectric plants is expected to start the following year, and the projects should start operating in 2028.

The second venture, within the Jorge Lacerda complex, which has seven coal-fired generating units, plans to take advantage of the land and infrastructure already installed on the site to install a gas turbine. As an example, Mr. Litsek highlights the transmission and water lines already available.

The executive considers that the project has an important social side. Bill 712/19, which extended for 15 years, starting in 2025, the contracting of coal-fired thermoelectric plants, benefited the Jorge Lacerda thermoelectric complex, by means of an energy contract.

The former owner, Engie Brasil Energia, was considering shutting down the complex if it did not find a buyer, but the coal industry found a way out to make operations viable. The law also provided for the reallocation of the labor force of about 20,000 workers involved in the coal chain to other activities.

“The two projects will allow us to mobilize the manpower we already have to be used in these new ventures,” Mr. Litsek said.

The challenge for Diamante to be competitive in the auction and, in the future, in maintaining the thermal plants, are the gas supply guarantees. The Garuva project is more strategic and can even initiate the operation of the LNG (liquefied natural gas) terminal that is being built in the Port of São Francisco do Sul.

“We are close to the connection point of the New Fortress Energy terminal on the Bolivia-Brazil pipeline, and we see the gas for the Norte Catarinense Thermoelectric coming from this terminal,” Mr. Litsek said.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Sengi invests R$440m in 2 solar panel factories

Company expects to triple its revenue to R$1.2bn by 2023 with new facilities

09/05/2022

Everton Fardin — Foto: Divulgação

Everton Fardin — Foto: Divulgação

The shortage of photovoltaic equipment on the Brazilian market is opening up opportunities for Sengi Solar. The company is investing R$440 million to build new factories in Paraná and Pernambuco with the capacity to make 1 gigawatt a year in equipment.

These are Sengi’s first factories in Brazil. The Cascavel unit, in Paraná, is ready and will start operating in September. The Ipojuca unit, in Pernambuco, is scheduled to start operating in July 2023. The company, a subsidiary of Tangipar, will have a capacity of more than 3,000 modules per day.

The investment was made with the company’s own capital, and revenues are expected to reach R$1.2 billion next year, up from R$400 million this year, Sergin’s managing director Everton Fardin told Valor.

“The market is red-hot and lacks options of local, state-of-the-art photovoltaic modules. Sengi intends to bridge this gap and grab a large portion of the market, tripling sales by 2023,” he said.

The company bets on offering the equipment to more than 80 distributors of photovoltaic equipment operating in Brazil. It stands out with short delivery times and local post-sales service, since more than 95% of the equipment in the market comes from centralized factories in China.

As ultra-efficient global supply chains face imbalances due to abrupt factory closures because of Covid-19 and logistical hurdles because of the war in Ukraine, the company’s strategy is focused on local production and regional value chains.

Brazil had been facing a decline in manufacturing in the photovoltaic semiconductor sector since 2019, even during a breakneck growth of the distributed generation and centralized generation markets, the executive said. The focus has gradually shifted to the distribution of products imported from China from local manufacturing.

“Therefore, Sengi Solar’s decision to build two new factories fights back strongly against this scenario and brings more autonomy to the supply chain of such a strategic product for the power industry and the planet’s decarbonization plans.”

The solar power industry is indeed the fastest growing in Brazil. In all, there are 16.4 GW of installed capacity of solar power in large plants and small self-generation projects, according to data by the Brazilian Electricity Regulatory Agency (ANEEL).

The investments are expected to generate 500 direct jobs in the two regions where the manufacturing units will be installed. The company invests in the domestic market according to the Brazilian Development Bank (BNDES) rules, which determine that at least 60% of the products are made in Brazil.

“The manufacturing units were dimensioned within the Industry 4.0 concept. We will produce much faster than the local industry,” he said. “Each process will take less than 25 seconds, including assembly, transformation, and inspection.”

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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