EuroChem invests to increase storage capacity in Brazil

The multinational fertilizer company EuroChem is investing R$185 million to expand storage capacity at its facilities in the North, Northeast, and South regions of Brazil. 

With this, it aims to reduce costs, improve efficiency, and eliminate dependence on outsourced warehouses.

In the North-Northeast region, the company, which is Russian and headquartered in Switzerland, invested R$120 million to increase capacity at its mixing plants in Barcarena (PA), São Luís (MA), and Candeias (BA). Investments began last August and are expected to be completed by the end of this year. 

In addition, the company reported that it will invest another R$65 million starting in January 2025 to increase storage capacity at its units in the South region, which are close to the ports of Paranaguá (PR) and Rio Grande (RS). As a result, the company expects to gain market share in the South region, which is currently between 1% and 2%, according to Augusto Oliveira, Vice President of Operations at EuroChem in Brazil.

Of the total amount being invested this year by EuroChem in the North-Northeast axis, R$80 million was used to more than double the storage capacity of the fertilizer mixing and bottling unit in the capital of Maranhão. São Luís is home to the Port of Itaqui, through which imported raw materials for fertilizer production arrive. 

″ We took a plot of land next to the plant and installed a new structure to expand storage, increasing the static capacity from 130,000 tons to 290,000 tons,″ Oliveira said.

Another R$20 million was earmarked for expanding storage at the Barcarena unit, which will increase from 120,000 tons to 140,000. Part of the funds was also earmarked for renovating two kilometers of the road leading to the company’s unit there. The road was completed two months ago and is ensuring ″ the return of transporters,″ according to Oliveira. 

The remaining R$20 million was allocated to expanding storage by 25% at the EuroChem unit in Candeias, where the Port of Aratu-Candeias is located. Storage capacity increased from 80,000 tons to 100,000 tons. With the investment in the North-Northeast axis, EuroChem will no longer depend on outsourcing warehouses in the region.

″ In an industry like ours, 20% of the cost comes from logistics. Therefore, any increase in efficiency in this segment means at least an 8% reduction in fertilizer production costs,″ the vice president estimated. For the rest of the year and 2025, EuroChem’s strategy is to focus on the distribution and organization of warehouses in the main shipping corridors in the regions where its 18 units in the country are located. 

According to the executive, with the improvement in logistics in the North-Northeast axis, the company ensures the delivery of fertilizers — purchased by producers for the 2025 second crop — at the time agreed with customers, regardless of adverse weather or geopolitical conditions.

He stated that the R$65 million earmarked for the units in the South region is part of a ″first round of investments″ linked to the idea of strengthening the company’s positions in the country’s six main ports. From 2016 until now, EuroChem has invested more than US$3 billion in Brazil and has become the fertilizer company with the most investments in the country. 

″We have the capacity and portfolio to meet demand, and today, our operations in the country are financed with the capital of the Brazilian subsidiary, without depending on the headquarters or other shareholders,″ Oliveira stated.

This year, EuroChem is expected to distribute approximately 6.3 million tons of fertilizers in the country — initially, the forecast was to reach seven million tons. In 2023, 6.5 million tons were delivered.