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December 1, 2014

Interior Staging Facilities result in less Congestion at Brazilian Ports

In past years, Brazilian ports have been legendary for the long lines of trucks waiting to enter the ports with their cargos of soybeans and corn. Those long lines are now a thing of the past thanks to new scheduling systems installed at both the Port of Paranagua in the state of Parana and the Port of Santos in the state of Sao Paulo. These new systems prohibit trucks from entering the port unless they has been authorized by the new computerized systems.

As part of this new system, staging areas have been built in the interior of Parana where trucks can unload their cargos and then the grain is transferred to trains which then carry it onto the ports. One such new facility is the intermodal grain terminal of Seara Agronegocios recently inaugurated in the city of Marialva in northern Parana.

The facility receives truckloads of soybeans and corn produced in Parana, Mato Grosso do Sul, Mato Grosso, and Goias which are unloaded and transferred to trains destined for the Port of Paranagua. There are no rail lines connecting this facility with the production fields located further in the interior of Brazil, so all the gain arrives by truck and it is turning out to be a win-win situation for everyone involved.

The truckers avoid the potential congestion and extended times waiting to be called to the port and the port can more efficiently receive soybeans by rail instead of thousands of trucks on a daily basis. This is the fourth such terminal built by Seara in the interior of Parana and the company now expects to move 10 million tons of grain per year to the port.

The company's business model is mainly to be an intermediary in the grain shipments to the Brazilian ports with 50 purchasing points in the interior including 1,700 trucks (200 owned by the company) and 1,230 rail cars. The company's static storage capacity is 300,000 tons and the company expects sales to total R$ 3.4 billion in 2014 or 21% more than in 2013. In addition to grain transportation activities, the company is involved in grain processing and food manufacturing.

With only a limited system of railroads and barging operations linking the producers in Mato Grosso, Mato Grosso do Sul, and Goias with the various ports in Brazil, the Seara business model is proving to be viable as an intermediary while producers wait for a more permanent solution to their high cost of transporting grain to export markets.