Copersucar made a joint venture in the area of freight
Valor Econômico
Copersucar, the largest company selling sugar and ethanol in the country, which in this season 2011/12 should earn R$ 14 billion (US$ 8.2 billion), announced yesterday the creation of a freight shipping company in partnership with the group Jamal Al-Ghurair (JAG) - which, among other businesses, owns the Al Khaleej Sugar (AKS), the largest sugar refinery in the world, located in Dubai. The new company, named Copa Shipping Company Limited will, at first, charter vessels for cargo of Copersucar and AKS, but in a second phase will also serve others. Copersucar and JAG have, each one, 50% of the company.
Without large investments, because it is a service provider, Copa Shipping begins to operate in this first half, with headquarters in Dubai and an office in São Paulo. The volume handled in the 2011/12 harvest will be around 5 million tons of sugar, and will address the volumes of raw sugar sent to Dubai by Copersucar and the refined product exported by AKS. There is potential, according to Paulo Roberto de Souza, president of Copersucar, for these volumes to rise to between 7 million and 8 million tons in the medium term. Besides sugar, the new company will also charter vessels for ethanol. This year, 600 million liters to be exported by Copersucar will already start debut the new service.
The partnership is part of the strategy of Copersucar of advancing throughout the logistic chain for sugar and ethanol. Souza explains that to take control over the chartering of vessels was necessary to improve the management of the logistic flow of the company, "If the shipment delays at the tip, the entire chain backwards is impaired. The railroad, for example, which is a modal in expansion at Copersucar can not stop due this kind of problem". Reaching this level of vertical logistics was only possible, according to him, because currently 80% of the volume of sugar exported by the company - this year will be 6 million tons - are long-term contracts.
With stability of volumes and destinations, the company will now need to convert the contracts with clients, so that 70% of them had the delivery of the product at final destination under the responsibility of Copersucar (CIF - Cost, Insurance and Freight), a percentage that is currently 30%. To do so, details Souza, part of the economy with freight obtained with Copa Shipping will be passed on to customers in return for that regime change in delivery of goods - from CIF to FOB (Free on Board). With a capacity to refine 2 million tons of sugar per year, AKS is the largest single customer of Copersucar that, for contractual reasons, does not reveal the volume sold to its now partner. "We serve most of that demand", says Souza.