July 11, 2013

Copersucar Expanding Export Facilities and Reducing Costs

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Copersucar, which is the largest sugar and ethanol producer in the world, is expanding its facilities at the Port of Santos in southern Brazil to increase its export capacity in order to reduce costs and remain competitive with its sugar exports. The company represents 47 sugar/ethanol mills in southern Brazil and is responsible for 17% of the world's sugar exports. The mills it represents are concentrated in southern Brazil, which is the largest sugarcane producing region in the world.

As part of the overall expansion and modernization program, new facilities have been built to more quickly unload arriving sugar shipments. Previously, 20% of the sugar arriving at its port facilities did so by rail, but that is expected to jump to 70% with the completion of its new unloading facility. The new facility will have the capacity to unload six rail cars simultaneously, which will reduce the time that a train is at the facility from 30 hours to 16 hours. The overall unloading capacity has been increased from 18,000 tons per day to 36,000 tons per day.

A third shiploader will also be installed allowing for more rapid loading of larger vessels. The new equipment will have the capacity to load 3,000 tons per hour compared to 2,400 tons per hour for the two existing shiploaders combined. The rate of loading vessels will increase from 40,000 tons per day to 60,000 tons per day.

The company will also install retractable covers that can be deployed during periods of wet weather. Currently, loading operations must be suspended and the holds of the ships closed any time there is threat of wet weather. The new covers will allow loading operations to proceed uninterrupted during wet weather. The goal of the R$ 2 billion investment in port upgrades is to increase the company's export capacity to 10 million tons per year.

Brazil in general has been scrambling to improve its infrastructure (roads, railroads, barges, and port facilities) in order to keep pace with the rapidly expanding agricultural production and exports. During the 2012/13 growing season Brazil produced approximately 185 million tons of grain and that is expected to increase to 200 million tons of grain in 2013/14. In addition to grain exports, Brazil's exports of sugar, coffee, and meats continue to increase as well. China is the primary destination of much of Brazil's soybean and sugar exports and Chinese purchase of Brazilian commodities is expected to continue increasing.