Dachser in Rio de Janeiro: Great Optimism for Brazil

Wednesday, August 14, 2013

When Dachser, the German multinational corporation and international logistics operator, announced the opening of its newest office in Brazil at Rio de Janeiro in June, the company did so with great optimism about the future of its market.

The Brazilian market is experiencing a time of significant visibility, which has been enhanced by the upcoming world sporting events to be held in the country--the 2014 FIFA World Cup and the 2016 Olympics. Collectively, the events have begun to lead to both investments, which may come to reach 30 billion dollars and business opportunities in different fields.

The state of Rio de Janeiro, where the new Dachser branch is situated, has received investments that will reportedly reach $102 billion dollars by the end of 2013.While a significant part of these resources will be applied to the petroleum and natural gas sector, the state's economy has been diversifying, with growth in the pharmaceutical industry in the state capital, and in the automobile industry in the southern region of the state. And they all need logistics.

Dachser said it selected the city not only for its economic potential, but also its strategic location to the Ports of Itaguaí and Rio de Janeiro, points of entry and exit for imported and exported products for the third largest state in Brazil in terms of GDP, Minas Gerais. Rio de Janeiro is also home to Galeão International Airport, the fourth largest logistics terminal in the country in terms of volume of air cargo.

"We will begin our activities here with a knowledgeable team focused on customs clearance, which requires cooperation with the Brazilian Health Surveillance Agency (ANVISA). The pharmaceutical and hospital sectors have been the first to benefit from this new branch - their contracts were signed right when our activities began," said Leonardo Gazen, the branch manager for the new Rio de Janeiro office.

The team will be made up of trained professionals that will work with international shipping, imports, and exports, as well as with customs clearance. This facility is the latest in Dachser's 12 such offices in Brazil-with more to come.

The State of Rio de Janeiro possesses 85% of Brazil's petroleum reserves and represents more than 80% of production and exploration activities involving petroleum and natural gas. These activities come largely from exploration, production, and refinery companies. The state is also home to a huge Petrobras investment of resources in a single venture. This project will transform the state into the largest petrochemical hub in Brazil, revolutionizing the region and generating revenue and thousands of jobs. In just a few years, the state will be the country's largest steel hub, with most activities coming from the ThyssenKrupp Steel Company (CSA) and the construction of two new steel mills, Mr. Gazen said.

With the arrival of major car companies and investments of up to R$10 billion, the state of Rio de Janeiro is on its way to becoming the second largest automobile center in Brazil. Rio de Janeiro's maritime industry is also being renewed: 13 of 26 oilrigs ordered by Petrobras will be constructed in the state (resulting in 10 billion dollars in orders). Two shipyards known as Inhaúma and Caneco have been remodeled, and a third shipyard is being built for the petroleum sector. A shipyard for the Brazilian Navy is also being built in the city of Itaguaí, in partnership with the French government.

Rio de Janeiro is also going to operate a new port in Itaguaí. The state is also in the process of building the Port of Açu, which will generate close to 150,000 jobs and completely transform the northern region of the state.

Public investment in the city of Rio de Janeiro has totaled R$15 billion, and has included funds for the Porto Maravilha city revitalization project, a subway line to reach the western part of the city, rapid transit bus lines, the Arco Metropolitano highway and 30 trains for the Supervia train system.

Opportunities for the Logistics Sector and the Fourth Largest Cargo Airport in Brazil

In view of the 2014 World Cup and the 2016 Olympics, many issues have been discussed regarding the best way to handle demand, including that created by tourists, professionals, journalists and athletes. It is estimated that eight million foreigners will visit Brazil by 2014, and that that number will reach 10 million by 2016, according to the 2011-2014 Tourism Reference Report developed by the Brazilian Ministry of Tourism (in partnership with the Getúlio Vargas Foundation).

Little has been done, however, or even considered regarding the increased cargo the country will receive and how these activities will be executed. Raw materials, equipment, machines, hotels, and a variety of products, energy sources and food products will be necessary for the events. It is inevitable that Brazil will see a large influx of containers and, that, in the air transport sector, Infaero (the country's federal airport corporation) will need to meet all of this demand in the cargo terminals in the months surrounding the World Cup and the Olympics. However, a "ogistical blackout or overload could risk the timetables and plans for construction projects, supplies, safety, and healthcare and the like. In addition, the lack of logistical planning by the companies involved may compromise the unprecedented business opportunities that the World Cup and the Olympics will bring to Brazilian markets and institutions.

The city of Rio de Janeiro is home to the Galeão International Airport, the fourth largest cargo airport in Brazil, which is surpassed only by Guarulhos International Airport, Viracopos Airport (Campinas) and Manaus International Airport.


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