Abstract
Rail freight company America Latina Logistica (ALL) said in March that it
expected a 10-12% increase
in freight traffic in 2009, due to rising
demand for transportation of soya and growth in general freight, as
companies switched to rail in pursuit of lower costs. The company noted that
in 2008 its freight traffic in its
main markets of Brazil and Argentina
had grown by 10.8% to 38.2 billion tonne km (bntkm). Net income
rose by
16.1% and EBITDA grew 23.7%. Although the company was upbeat about its ability
to come
through the recession with increased business, it nevertheless
acknowledged it was cutting back planned
capital investment to BRL600mn
(US$276.1mn) from BRL700mn (US$322.1mn) before. Around 65% of
ALL' s cargo
business comes from the agro-industrial sector, with 35% from manufacturing.
The company
said it wanted to change the mix to 50-50.
In its latest
Brazil Freight Transport Report, BMI has set its forecast for annual average
growth in freight
carried across all modes over the 2009-2013 period at
3.5%. Various factors support this prediction. We
believe that despite
global economic cooling, the Brazilian economy, which will contract by under
1% this
year, will manage a period of low to moderate growth. Annual
Brazilian GDP growth will average 2.3%
during the 2009-2013 period (down
from 4.7% in the preceding five-year period). This will underpin
general
freight demand. The overall freight picture is encouraging - although work to
improve and repair
the highway network is still lagging - as road haulage
will grow by an average of 3.0%. The largely
privatised rail freight
sector will do better, aided by Brazil' s commodity export performance,
particularly in
mining. The rail freight growth figure in 2009-2013 will
average 3.5% annually. Brazil performs well in
our freight transport
industry rating, scoring 77.8 out of 100, significantly above the regional
average.
Freight growth, infrastructure growth, and the regulatory and
competitive environment all score well.
Economic and political risk is
comparable to the Latin American peer group. Foreign trade still
represents
only around 20% of GDP, although on the other hand the sheer
geographical size of the country means
there will be healthy internal
demand for freight transport.
According to our latest estimates, the total
value of transport and communications GDP will rise to
US$126.7bn in
nominal terms by 2013, representing 5.4% of Brazil' s GDP. The transport
and
communications sector employed 4.725mn people, or 4.9% of the labour
force, in 2008. We see these
figures rising to 6.0mn - and 5.4% - by
2013.
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