Ceagro: Production and Exports of Soybean and Corn in Brazil

Interview with Antônio Carlos Gonçalves Júnior, President of Ceagro

Could you give us an overview of the agribusiness sector in Brazil?

The grain sector (soy and corn), unlike other niches, has been consistently growing these last few years. It has a very stable growth profile, which translate into a 7-8 % growth rate each year. We have been present in the market for 26 years and our orientation as a company has been the production and export of soy and corn.

Could you tell us a little bit about the company’s history?

I founded the company in 1987 and it became a trading company in 1991. Our activity is concentrated mainly in Mato Grosso and Mato Grosso do Sul.

From 1997 on, the company was reaching new levels, and today Ceagro acts in every state that produces grain: Mato Grosso, Mato Grosso do Sul, Paraná, Rio Grande do Sul, Sao Paulo, Goiás, Bahia, Maranhão and Tocantins. We are now covering the Central-West, the South and the grain producing regions.

Ceagro always focuses on the production, but through pre-financing. Ceagro pre-finances the rural producer and that is the essence of our progress. The company also provides technical consultancy and counselling for production improvement.

What are Ceagro’s biggest projects?

We have a project, in which we are building our own outflowing structure with road terminals and a pre-outflowing harbor in the North region (in the Santarém municipality). If you take into consideration the logistics in Brazil, Ceagro has outflowing key-locations. The harbor is under construction to outflow the production of the Mato Grosso’s Middle-Northern from 2016 on.

How would you define the company’s philosophy and what are your competitive advantages?

The company has always worked in close proximity with the producer, seeking solutions and competitive advantages in the market.

The company has always been seeking innovation. The pre-financing process already is an innovative process – the company does not make the producer a person that owes money; we have an exchange relationship and the producer owes us his products. Ceagro brought into the 21st century a process that worked already in the 16th century (feudal system).

Another competitive advantage is our presence in the logistics, which is very close to the producer. This way, the producer can improve his crop processes.

On the other hand, we have national and international clients and the philosophy is the same. We ask ourselves: what do our clients need? what does our Asian client, for example, need? We work on that basis in order to meet our clients’ needs in a differentiated way.

Which are Ceagro’s major national and international clients?

The five main protein (meat) producers in Brazil are Ceagro’s clients. For the energy sector (here we use protein to soy and energy to corn) clients that use corn to produce ration, we guarantee supply with price fixing up to 30 days prior to delivery.

Nowadays we are supplying international traders and direct clients in Europe and Asia.

Exports nowadays represent 60% of our operations.

What is the company’s growth strategy?

Within the internationalization process of the company, we are opening a subsidiary in Shanghai, another one in Rotterdam, and a third one in Oman (to be closer to our clients in the Arab world).

Nationally we are investing in infrastructure to improve the conditions and the capacity to outflow soy, corn and other grains.

We are also building new storage units. Our goal is to reach 1 million tons of storage capacity (our current capacity is of 420 thousand tons). With the construction of the 6 new warehouses and the new terminals, we are going to increase the capacity until we reach the 1 million tons goal.

What challenges do you have to face on a daily basis?

The sector’s challenges are not related to production, but they relate to infrastructure and logistics. We have been working very hard and effectively to face these challenges.

In terms of growth, we hope we are able to do, in the future, what we do today.

What is your vision for the sector in 2 years?

I believe the future of the sector is very well defined. Brazil is the biggest soy exporter in the world, but it’s not the biggest producer. In 5 or 7 years from now, I think we will be the biggest producer too.

What are your expectations for the company two years from now?

The company’s plan is to maintain the current core business.

What would be your message to a foreign investor that wishes to come to Brazil and work in your area?

If the foreign investor wants to come into Brazil and work on the sector with a financial perspective, he can come, because the sector is very solid and its growth is well structured.

If the investor has a strategic vision and wants to buy lands, he can also come, because infrastructures are improving. There are, of course, some laws preventing foreigners to own certain types of land, but there are also incentives for investment.

My message would be: you can invest, because you are investing in a country with an exceptional climate and an excellent productivity.

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