Competitive Edge

Logistics

At Odebrecht Agroindustrial, logistics is currently a great ally in the search for competitiveness and development of corporate projects and solutions. Using rail and road modals to serve domestic clients and to transport products to ports for export, the company’s logistics system focuses on two major aspects: planning and operation.

Planning activities include the defining medium- and long-term projects, developing new models, terminals, and alternatives that may be feasible to current service providers. Additionally, planning activities also include optimizing logistics and production in the current crop year. In turn, operation activities account for moving the products through defined flows, from units’ inventory to end clients. This ensures fulfillment of the company’s commitments to greater speed, as well as reducing transport costs, whenever possible.

During the 2012-2013 crop year, significant advances were made in logistics activities, such as the creation and granting of the licenses required for operating the exclusive storage terminal and selling ethanol in the municipality of Paulínia, in the State of São Paulo, which is expected increase competitiveness due to the excellent location and immediate delivery. With the beginning of operations estimated for the 2013-2014 crop year, the new terminal, named “Tercom”, will have 9 thousand cubic meters’ static capacity. This structure is expected to enable trading of approximately 240 thousand cubic meters of ethanol in the next crop year.

Most part of the sugar traded by the company is transported through the port of Paranaguá, in the State of Paraná, which is served by railroads from the city of Maringá (State of Paraná). Odebrecht Agroindustrial maintains a transshipment terminal in this municipality for distribution of products from the units located in the States of São Paulo and Mato Grosso do Sul.

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Logum Project

Through Odebrecht TransPort, Odebrecht Agroindustrial holds a 20% interest in the Logum Project – a consortium that is responsible for constructing a multimodal logistic system for ethanol transport and storage. With large investments, the system will cross 45 municipalities, linking the major ethanol producing regions of the States of São Paulo, Minas Gerais, Goiás and Mato Grosso do Sul to the primary storage and distribution spot in Paulínia (State of São Paulo).

Part of this integrated system will include a long-distance pipeline of approximately 1.3 thousand kilometers linking the regions of Jataí (State of Goiás) and Paulínia (State of São Paulo). The project will be integrated to the water transport system through barges along the Tietê-Paraná basin. Overall, the system will comprise nine land and water terminals for ethanol collection. The combination of pipeline and water systems is intended to rationalize transportation of fuel and reduce costs.

Through a broad network of pipelines, this integrated system will stretch out from Paulínia to terminals in Barueri and Guarulhos, in Greater São Paulo, and Duque de Caxias, in the State of Rio de Janeiro, from which ethanol will be taken directly to fuel stations through short-distance road transportation. In order to ensure the arrival of the product to other Brazilian markets through cabotage, the flow system will reach the maritime terminals located on the coast of the States of São Paulo and Rio de Janeiro. This system will also provide greater speed to ethanol exports.

The first phase of the project, linking Paulínia to Ribeirão Preto (both in the State of São Paulo), is ready and expected to go on stream during the 2013-2014 crop. The next steps include beginning the works for the stretch between Ribeirão Preto and Uberaba (State of Minas Gerais), which has already been approved, and construction authorization for the stretches connecting Uberaba to Jataí (State of Goiás). The project is expected to be concluded by the end of 2015, offering an installed transport capacity of 21 million cubic meters of ethanol per year.

The company believes that the turnover of ethanol will mean a new phase after the beginning of operations at the Tercom terminal, in Paulínia, and of the Logum multi-pipeline. These two initiatives will enhance the company’s flexibility and celerity in São Paulo’s market, besides reducing operational costs. The pipeline network will also enable significant advantages in terms of safety and environmental conservation, particularly due to less use of roads by trucks and lower fuel oil burning, thus reducing reduce CO2 emissions during the trips.