South America Calling

Brazil Opens Two New Rail-Port Grain Terminals in North

VLI, a Brazilian logistics operator, announced it had opened two new grain terminals in the northern state of Tocantins, continuing the improvement in logistics in Brazil's expansion regions.

The terminals serve the north-south railroad, also essentially controlled by VLI, on which beans and corn from Maranhao, Tocantins, Piaui, Bahia and eastern Mato Grosso will be transported to the northern port of Itaqui.

The R$264 million ($73 million) investment will increase grain capacity along the north-south route by up to 6 million metric tons (mmt), estimates VLI.

One of the facilitators of future growth in Brazilian grain production will be improved rail and barge transport to northern ports, which will replace expensive road freight from the isolated Cerrado region in the center of the continent.

VLI's main shareholder in miner Vale, who runs the final part of the rail link that also serves Carajas, one of the world's largest iron ore mines.

Grain traffic via the center-north corridor, as VLI calls the railway route, has risen from 2.6 mmt in 2012 to 4.2 mmt n 2015

With the expansion and the opening of new terminals at Itaqui, the volume could rise to 10 mmt.

VLI will invest R$1.7 billion (472 million) in the center-north corridor, including investment in terminal infrastructure, waggons and other modifications.

Soybean area has been growing quickly over the last decade across the eastern Cerrado, which the rail link serves. However, expansion will likely pause next year due to limited credit and a more cautious approach after three years of drought losses in various parts of the region.



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