Sep. 4, 2019
By Leonardo Gottems, Reporter for AgroPages
Wladimir Chaga, president of Brandt do Brasil, spoke exclusively to AgroPages about the company's expansion plans in the country. While some R$20 million will be invested in the construction of a new factory in the state of Paraná, considered a strategic part of the company's growth, Chaga also revealed that Brandt would make an entry into organic agriculture in a big way in Brazil, including starting to produce solutions here that are already being manufactured in the United States.
What are the plans for the new factory in Brazil?
We are buying over 10,000 m² in the Londrina region (state of Paraná) for the construction of our new factory, which should begin from January next year. It is a strategic place: Londrina is in a transitional place, with a climate quite different from the Brazilian climate in general, influenced by the cold climate of southern Brazil and at the same time reporting a strong influence of the tropical climate of the Brazilian cerrado. So much so, that Embrapa is located in Londrina, where the national soybean center, other corn companies, as well as two soybean technology companies are also located.
Our intention is to announce this acquisition as soon as possible, but what is already certain is that the land is ours and we will build the factory, because our existing one is operating in three shifts now, causing difficulties.
What will be the investment in this new plant?
As for the investment, I imagine we should invest around R$10 to 15 million for the construction of the plant, and R$5 million in the acquisition. Obviously this will all depend on environmental laws, what we have to do with the resources, artesian wells, wastewater treatment and a number of things that we cannot yet conclude with this study. It is a factory that depends on environmental releases, but the deadline is two years, because we have to comply with all the legal steps. We are building a plant four times the one we are building today to serve a market of around 200 to 250 million reals.
What products will be made in the new factory?
We plan to continue with the factory in Olímpia (São Paulo), unless it changes a lot, but the idea is to have a unit in the state of São Paulo (SP) for tax reasons. There are many suppliers of raw materials in SP, and it also plays an important role in serving the citrus, sugarcane, coffee, and logistics in the state, in addition to serving the Brazilian Cerrado region.
We have many products from the United States that are not here for the lack of capacity. In Olympia, we are not allowed to work with dry products, whether dry, granulated or powdered; we have no autonomy to work. We will seek a license for Olympia and will only work with the dry product as it is an older factory. In Londrina, we will work with liquid products, as it will be a modernized automation factory, almost a pharmaceutical products factory, with all the available technology. We will bring some products from the US here, and we will go strong in the case of organic agriculture, which is widely popular there and only a little here; it is a market that will not take over the world, but the world will consume more. It is a 12% market in Brazil, which should go up to 15% or 20% in five years, because the population needs to witness an increase in income for this market to grow.
Do organic inputs also have a higher price?
Compared to conventional products, organic fertilizers have a higher cost for control and rigidity; they should have a slightly higher cost due to the difficulty of accessing these raw materials that should be tracked.
What particularities in Brazilian agriculture should be noted?
Farming works very fast, planting day is planting day, harvesting season is harvesting season, there is no way to buy things later or wait for the next promotion; you need to have the product available at that moment. If it rains, all farmers will plant, for example. This requires a lot of working capital, a lot of planning effort; logistics in Brazil also comes with its share of problems, it is not simple. It is necessary to have a good distribution, with professionals who are always well trained, attending and practising everyday with resellers and cooperatives to access the final producer, beginning with field days, training programs or lectures.