World Grain - October 2004 - 59

FEATURE: LOGISTIC CHANGES

expects to come from the center-west via BR-163. The port is
three days closer to Brazil's main soy markets in Europe and
Asia than the main grain ports in the south of the country.
But even talk of paving the road stirs strong resistance from
environmentalists and Cargill's terminal in Santarem was temporarily shut down in 2003 by IBAMA for failing to complete
an environmental impact study, which the port authority itself
said was not necessary. The terminal is open again but the
legal battle continues.
BR-163 has been particularly bad this year because of the
torrential rains that have pounded the region during the early
harvest when trucks need to use the road most. The southern
stretch of BR-163 is paved but has fallen into such poor state,
along with the rest of the federal highways system, that truckers
unions had threatened to stage a national strike on July 25-27.
"President Luiz Inacio Lula da Silva indicated that 6 billion
Reais (U.S.$2 billion) would be freed up immediately for the
repair of the federal highways system and I think this met the
demands of the truckers," Nelio Botelho, president of the Brazil Trucker Union, said after meeting with Lula on July 16.
TRAINS
The most important railways for agricultural transport in

Brazil are run by America Latina Logistica (ALL) in the
south, Companhia Vale do Rio Doce (CVRD), the world's
largest iron ore producer, in the center-south and northeast
and the Ferronorte project and its connections between the
center-west and the port of Santos.
ALL, the largest logistics operator in Latin America, has
been arguably the most successful of the three. The company
took over the concession from the government in 1996 and has
not been interested in laying one mile of track. Its network of
existing rail spiderwebs Brazil's grain-rich southern states of
Rio Grande do Sul and Parana with its port of Paranagua to
northern Argentina. The area it covers accounts for 62% of the
GDP of South America's Southern Cone and 70% of the grain
exported from South America. The company just went public
on the Sao Paulo Stock Exchange in July.
CVRD's railway and logistics division is largely responsible
for transporting iron ore, but it has begun to venture into the
strong demand in the grain transport market. CVRD is investing $300 million annually for the next four years to increase
its rail and port capacity in its northern export route. Farm
goods (soy, sugar, corn, etc.) already account for 12% of the
company's logistics revenues.
Ferronorte, the dream of the world's former soybean king,

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World Grain - October 2004

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