Cofco Expands Export Capacity in Brazil with Terminal in Santos

Chinese agribusiness giant Cofco International, one of the world’s largest trading firms, is preparing to launch the first phase of its new export terminal at the Port of Santos, Brazil, this March. The STS-11 terminal, developed with a total investment of $285 million, addresses a major challenge the company has faced since entering the Brazilian market in 2014: the lack of its own outlet for exporting locally produced products.

Sérgio Ferreira, operations director at Cofco Brazil, explained that relying on third-party terminals had driven the company’s costs 10% to 15% higher than its competitors. “When the bidding process was announced in 2021, we recognized it as a remarkable opportunity. In addition to exporting grains, the license permits shipments of any agricultural commodity,” Ferreira told Valor Econômico.

Cofco aims to independently operate the terminal by 2025, handling 8 million tonnes of grains, sugar, and soybean meal. Once fully operational and open to third-party clients, throughput is projected to reach 14.5 million tonnes by 2026. Currently, Cofco exports approximately 4.5 million tonnes through the Port of Santos.

Renting space to other companies represents a strategic shift in Cofco’s business model in Brazil. Previously, the company relied on “take-or-pay” contracts, where exporters commit to paying for terminal use regardless of the volume shipped. “Even if the harvest underperforms, we’re obligated to pay the contracted amount. Plus, terminal owners always prioritize their own shipments,” Ferreira explained.

Cofco plans to export 70% to 80% of the commodities it originates in Brazil through the new terminal, with the remainder routed through Northern Arc ports via Hidrovias do Brasil’s terminals, where existing take-or-pay contracts will remain in place.

Phase one of the STS-11 project involved demolishing outdated facilities formerly owned by Bracell, Rishis, Rodrimar, and Cereal Sul on the right bank of the Port of Santos. Phase two will see the removal of additional structures and integration with the equipment installed in the initial phase.

Cofco acquired the terminal area in March 2022 for R$10 million, securing a 25-year concession with options for successive extensions, potentially totaling up to 70 years.

Key investments include upgrades to two docking berths, quay reinforcement, dredging, and the acquisition of two state-of-the-art shiploaders, each capable of handling 3,000 tonnes per hour. “We’ll be the only terminal equipped with two shiploaders, enabling us to fill two Panamax ships per day, weather permitting,” Ferreira highlighted.

The terminal’s unloading yard will feature four railway lines and three hoppers, each with a capacity of 1,500 tonnes per hour. The facility is designed to accommodate three trains of up to 120 wagons and handle substantial truck volumes.

Currently, 70% of Cofco’s products reach Santos by truck, with the remainder arriving by train. This dynamic will reverse under the new configuration. Grains will be transported via Rumo’s rail line from Rondonópolis (MT) to Santos, while sugar will utilize Rumo’s intermodal terminal in Votuporanga (SP). Trucks will continue to carry products from Minas Gerais, parts of São Paulo, and Goiás.

“Once operational, the terminal will load over 200 ships annually, unload more than 110,000 trucks, and process 85,000 wagons,” Ferreira stated. He also emphasized sustainability measures, noting that all transporters will be fully enclosed to minimize losses and environmental impact. Additionally, the terminal’s truck and wagon flow will be fully automated.

STS-11 will become Cofco’s largest port terminal outside of China. Until now, the company’s largest terminal was in Argentina’s Greater Rosario region, with an annual capacity of 6 million tonnes. Another terminal in Argentina handles 5 million tonnes annually, as does Cofco’s facility in Romania. By contrast, the company’s Chinese terminals are exclusively focused on imports.

As the international trading arm of the state-owned Cofco Corporation, Cofco International operates in over 50 countries. In 2023, the company generated $50.1 billion in revenue and handled 121.7 million tonnes of commodities and food, solidifying its position as a global leader in agribusiness.

Source: Globo Rural

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