Luft Logistics: Overview on logistics of agrochemicals in Brazil

The Director of Luft Logistics, Vladimir Donega, took an interview with the portal Global Agro Chemicals about the panorama and perspectives of logistics of agrochemicals in Brazil. 

 

The executive, who has over two decades of experience in the business, spoke about the partnership of the company with the National Institute of Processing of Empty Packages (InPev).

 

 

Luft, like you mentioned, is a company that since the 1970s has participated in this incredible market, which always offers innovation and its services, which aim for a continuous improvement in our customers. In the last few years, we are fully aligned with the market and putting all of our structure to think on how to optimize and better serve the customers of our customers.

 

The year 2016 fell short. It was a year of a lot of restructuring in the market for agrochemicals took place and several moves in the industry sought to reduce costs, which significantly affected our revenues and consequently our results. Even so, we ended the year with some victories that we expect to give support for an important recovery phase in the following years. The main one is to conquer the confidence of Nufarm to be the logistical operator for Brazil in an innovative project, with a concept that was not used by the industry in Brazil and is called the Fourth Party Logistic, whose technical definition indicates that we at Luft are an integrator agent for all logistics chains. This confidence has honored us a lot.

 

The market in 2017, like indicated by the industry, should not grow significantly, but as cited, Luft has maintained a commitment to the market and as always invested in assets to attend clients. We inaugurated a distribution center in the city of Sorriso/MT during the 2016-2017 year that, through an innovative concept, will provide a complex of services to farmers, bringing the industry and the product closer, taking technology and safety to this market.

 

This complex will be marked by a capacity to support farmers with stocks of agrochemicals, as well as seeds, as for this crop we inaugurated a distribution center of seeds in July, 2017. Besides, as part of the strategy and innovation, we inaugurated a new distribution center in Cuiabá (Mato Grosso) in May this year. We are continuing with this strategy in 2018, we will be open another complex of logistical services in MT.

 

In 2017, we are expanding, for the fourth year in a row, the distribution center of Carazinho (Rio Grande do Sul), as well as increasing capacity at our distribution center in Luis Eduardo Magalhães (Bahia), where we resized our capacity of inflammable products, sluice gate, docks, patio and new office facilities. We also initiated the construction of a new distribution center in Ibiporã (Paraná) that will be delivered in January, 2018.

 

Another aspect to be highlighted is our immense investment in technology. Today, all the drivers can have a cell phone with internet access, where several services are connected, among them the tracking of products, journey, low delivery, among others.

 

So, Luft has as a strategy to put the customer in the first place and ensure attendance with excellence in the market.

 

 

The logistics sector for agrochemicals is highly regulated and undergoes an exhaustive enforcement by authorities, as well as the civil society. This way, the rules are so many and we have a legislation that often imposes costs and extreme care.

 

We, an ethical and rule abiding company, suffer a lot because of unfair competition. The trivial hirings and lack of knowledge of many companies result in real costs and responsibilities being imposed on this market and lead to a degradation of quality and capacity for reinvestment in the sector, which suffers from cost increases and tariff reductions.

 

The main operational challenges are risk management, caused by a growing increase in the theft of agrochemicals in the main consuming regions. Another point is the increase of concentration of sales in the monthly closing, putting all the chain at stake because it pressures the system that normally collapses.

 

Logistics improvements are made when there is a standard set for operations. This way, the shippers should improve the management of its stocks, bring closer the customers and shrink the concentration of sales in the last days of the month. All of this concentration pressures risk management, increasing the possibility of theft and misappropriations.

 

We are feeling this movement in the market since 2016, when it fell 1.4 percent. We had years of previous growth, with double digits, and now we have to reinvent ourselves. As cited, our life was constructed in this market and we will continue to invest in it.

 

Yes, we will be focused on this market. We think and live in this market every day.

 

 

In 2016, we will have a new record of collections for these materials. The work has been made along with InPev and is incessant. InPev has been developing an impeccable cleaning system for possible areas with environmental impact and making important investments in recycling of material, which is helping shrink the environmental impact further.

 

For 2017, the strategy continues. Luft supports all the actions of InPev since the creation of the same, where we had the pleasure of participating actively in the development of all the operational strategy. The investments were made on demand, as well as together, and always happens when we have a request. In 2017, we started the operations for expired products that are in the rural properties. These operations are being carried out by InPev, along with Luft.

 

 

This market is still immature and was never consolidated in Brazil. There is a lot of consolidation and judicial safety to make us continue investing. These are investments with fixed annual costs and revenues restricted to the crop. This way, the market has not developed as we imagined when we started the project.

 

We have already developing several projects for the industry and we crashed always with the reference costs for the farmer, but certainly for the future of agriculture, we see a path of precision agriculture that has a no-return path. The details of the use of inputs will make a difference to the future of agriculture. There is no space for waste.