Rumo to expand presence in Brazil’s centre-north axis

Installing “train stops” along Brazil’s North-South Railway, a rail axis in the centre of the country that connects the Tocantins and Sao Paulo states, Rumo plans to expand the sale of transport tickets to the country’s largest agricultural producers from 2023 onwards.

These “stations” are, in fact, service provision terminals built with partners in critically important municipalities to attract customers within a certain radius of action.

“We studied local demand and how to meet it, like those planning to build supermarkets do,” the executive continues. “We work with partners, as in a franchise system, to better serve end customers in each region.”

After winning the railroad concession in 2019, the company set up three terminals, two in Goiás and one in Minas Gerais. Excluding the investments by partner companies, the contributions add up to around BRL 500 million.

Since the operations started at the North-Sul Railway, nicknamed Central Network by Rumo, cargo movement has doubled. Last year, 3.4 million tonnes of soybeans, soy meal, and corn were transported. In 2022, with new partnerships signed to transport sugar and fertilizers, the total volume reached 7.5 million tonnes by November.

Although he cannot detail the next steps, Palma says that new partnerships are foreseen and could get off the ground as early as 2023. For now, Rumo is pondering installing two new grain terminals in south Tocantins and northern Goiás.

However, completing the rail stretch between Rio Verde and Anápolis, which the Federal Government didn’t do, is necessary to make the Central Network work at its full potential. The company wants it finished by 2023.

Rumo’s plan to gain momentum in the Centre-North axis includes building another railway network called the “Northern network,” which will cross the country northward through Mato Grosso. This railway will connect Rondonopolis, where the company already owns a terminal, to Lucas do Rio Verde, reaching Cuiabá.

Palma emphasized that it would be the country’s first privately funded railroad. With its current Mato Grosso structure, the logistics operator moves 44% of the state’s soy, bran, and corn exports.

The business expansion plan will open up new opportunities for transporting crops from the Center-North to ports in the Southeast and South. Getting fertilizers to the heart of the country is also on the agenda.

The move should boost competition between logistics solutions in the region. It is worth remembering that the northern ports of Brazil are increasingly becoming more popular as outlets for agricultural products. Among the service providers present in the region are companies such as VLI.

In practice, the Rumo project on the North-South Railway began with the construction of the first such terminal with this mold in São Simão in 2021. There, the commercial partner is Caramuru, and the terminal operates soybeans.

Both companies funded the project. Rumo sells the rail service, and Caramuru and third parties use part of the operational capacity.

The other two terminals along the Centre-North were inaugurated in the middle of this year. One of them started to operate in partnership with Usina Coruripe, which made the total investment. The Usina Coruripe, a Rumo customer, had a sugar production unit in the municipality. The terminal can handle around 2 million tonnes of sugar per year.

Altogether, Rumo’s investment in infrastructure in the Central Network adds up to R$ 4 billion. So far, the operations have helped the company to account for the movement of 30% of soybeans and corn from Goiás and eastern Mato Grosso.

Source: Valor Econômico

To read the full original article, please visit: Rumo ampliará atuação na região Centro-Norte do país | Agronegócios | Valor Econômico (globo.com)

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