Changing grain movement and handling systems

by Teresa Acklin
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Infrastructure investments in Argentina and Brazil improve competitiveness in international grain and oilseed markets.

   Argentina and Brazil are Latin America's largest grain and oilseed producers. In 1996-97, Argentina's total grains and oilseeds production reached a record 53 million tonnes, while Brazil's total output exceeded 70 million.

   Both countries are active grain and oilseed exporters, but weak infrastructure systems traditionally have tended to impede aggressive expansion in global markets. In recent years, governments in Brazil and Argentina have taken steps to foster infrastructure improvements through privatization and a more favorable investment climate.

   One of the most ambitious logistics projects related to the export of Brazilian soybeans is the Madeira-Amazonas Waterway, inaugurated in April at a ceremony attended by Fernando Henrique Cardoso, president of Brazil.

   The U.S.$60 million investment was designed for transporting grains, bulk solids and agricultural inputs by integrating road, river and sea transport (see May 1997 World Grain, page 40). The brains behind the project is Hermasa Navegacoes da Amazonia S.A., a member of the Andre Maggi Group, the largest soybean producer in Brazil.

   Looking for ways to cut back costs in the outflow of agricultural production, the Maggi Group invested in the construction of two grain terminals on the Madeira-Amazonas Waterway. Now grain output goes by road as far as the grain terminal at Porto Velho, on the Madeira River, then sails down the Amazon River as far as Port Itacoatiara. This alternative made it possible to reduce the cost of soybean transport by more than 30%.

   Formerly, soybeans exported from the Brazilian midwest were handled in the country's southern ports of Santos and Paranagua, which often are overworked, raising the cost of transportation. For the Maggi Group, freight charges had been U.S.$105 per tonne.

   Today, by shipping along the Madeira-Amazonas Waterway, those same charges are down to only U.S.$70 per tonne. This significant reduction in freight costs has boosted the competitiveness of soybeans from the Brazilian midwest on the international market.

Porto Velho, Itacoatiara Terminals

   Equipped with state-of-the-art technology and management procedures, the Porto Velho Grain Terminal and the Itacoatiara Mixed Private Port Terminal provide efficiency and competitiveness for land, river and sea operations. The efficiencies stem from the integration of transport systems, which has reduced freight time and costs for the produce shipped to and sold on the international market.

   Set on the banks of the Madeira River, covering an area of 40,000 square meters, the Porto Velho terminal receives by road soybeans coming from the northeast of Mato Grosso, from Rondonia and Acre, in the Brazilian midwest. While waiting to be loaded onto barges, the grain is stored in a battery of aeration-equipped steel silos with an overall static capacity of 45,000 tonnes.

   These silos were designed, built and assembled by the Brazilian company Kepler Weber Industrial. The company also manufactured and assembled a horizontal conveying system, sized for a flow of 750 tonnes per hour, for loading and unloading grain barges that are part of the Madeira-Amazonas Waterway operating system. The belt conveyor is retractable, allowing it to advance into the Madeira River for performing loading and unloading operations, and then return to its original position.

   The Itacoatiara Mixed Private Port Terminal is built on the bank of the Amazon River, at a site 200 kilometers from Manaus, capital of the Amazonian state. This port terminal is equipped to unload the barges coming from the Porto Velho Grain Terminal and to load ocean-going vessels. It also has a 90,000-tonne capacity grain silo.

   The unloading of barges and the loading of long range ships, or the transfer of soybeans to the grain silo, is done by means of a Floating Transshipment Dock, supplied by BMH Marine, Bjuv, Sweden. Kepler Weber Industrial designed, built and assembled the bucket elevators and belt conveyors installed on the transshipment dock, designed for a flow of 1,500 tph. Kepler Weber likewise supplied, ready and commissioned, the conveying equipment and the grain aeration system for the 90,000 tonne capacity horizontal grain silo.

   The electromechanical equipment in the Itacoatiara port terminal has an installed power rating of 3,500 kVA, 15 kV, and is operated from a programmable logic controller with supervising software. Set up on the Floating Transshipment Dock, in communication with the land installations via modem, this system provides complete control of grain movement on belt conveyors and in bucket elevators.

   The transport of products received at the Porto Velho Grain Terminal in Rondonia along the 1,270 kilometers of the Madeira-Amazonas Waterway to the Itacoatiara Mixed Private Port Terminal, is carried out by a fleet of 18 barges moved by pusher tugboats, all of them owned by Hermasa Navegacao da Amazonia S.A., a member of the Andre Maggi Group. The barges are individually capable of transporting 1,800 tonnes of soybeans, while each one of the fleet's two pusher tugboats have a power rating of 2,400 HP. Each pusher can move a convoy of nine barges, with an aggregate total of almost 18,000 tonnes carried on a single trip.

   To ensure safe and fast navigation along the Madeiras River, sand banks and other geographical features were fully mapped and marked out along its course between Porto Velho and the mouth of the Amazon River. The convoys of barges and pusher tugboats sail downstream and upstream backed by a sophisticated DGPS computer system. At departure, each convoy's pusher is given a diskette containing a navigation chart. From there on, river navigation is fully guided by a satellite signal, foreseeing and avoiding risks such as running aground, ramming and other accidents.

   At Itacoatiara, the grain barge unloading and ocean-going vessel loading operations are carried out with the help of two 1,200 HP port tugboats, a 600 HP pusher tugboat and a support launch.

   The implementation of the Hermasa project will activate the economy of the Brazilian midwest region. With technology and efficiency, it will permit transport of a significant volume of grain, encouraging the installation of industrial complexes in the region. Plans already are being made to build a soybean crushing unit, an animal feed mill for soybean bran and a fertilizer plant at Itacoatiara.

   Initiatives of this importance confirm Brazil's move toward a global economy. With its efficient technology, this new export route will have a noticeable impact on Brazil's economy, making its products more competitive in global markets.

Argentina Storage and Transport

   Over the past few years, Argentina's transportation and storage systems have undergone changes. Important among these is the increased investment in storage capacity and loading equipment countrywide, but especially at four of Argentina's principal port complexes.

   As indicated in the table on page 16, Argentina has increased its port capacity significantly, and improvements have been made in loading rates as well. Today, Argentine terminal facilities can load a total of 40,000 tonnes of grain per hour and have increased storage capacity to 3.9 million tonnes from 1.1 million in 1980.

   Ports were privatized starting in 1991, with investments from private and public firms in seaports and the Parana river facilities. Further improvements are being made to deepen river channels, allowing larger vessels to fully load, circumventing the need to use smaller ships at deep-water births in other locations.

   At the farm level, the situation is somewhat less certain. Although farmers have also made investments in marketing infrastructure such as storage, only a relatively small portion of total output still can be kept on farm to allow growers some control over marketing patterns.

   For example, only about 30% of this season's record harvest could be stored on-farm. As a result of the limited on-farm storage capacity, a large portion of the crop must move into the marketing system directly after harvest, limiting the farmers' flexibility to vie for the most attractive prices.

   The wheat harvest in Argentina begins in December, followed in several months by the maize, sorghum, soybean and sunflower harvests. Indications are that the total grain marketing system can now move 5 million tonnes a month without undue stress, an amount thought to be more than adequate to meet shipping commitments.

   The total amount of storage required in the critical months of March through May is about 33 million tonnes, less than the total capacity in the country. Argentina's total grain storage capacity is estimated by the government to stand at 43 million tonnes, up from 30 million in 1984.

   The most favorable way in Argentina to move grain from the farm to central collection points is by truck, as the railroads, while improving, are not yet the main transport mechanism. In the past, there were not enough trucks to move grain in a timely manner, but both quality and capacity of the trucking fleet have improved, as well as roads, easing delays in grain movement.

   Brazil's U.S.$60 million Madeira-Amazonas Waterway project integrates road, river and sea transport to move grain, oilseeds, bulk solids and inputs. Hermasa Navegacoes da Amazonia S.A., a member of the Maggi Group, Brazil's largest soybean producer, was a primary investor in the infrastructure project.

Grain storage capacity at major Argentine ports in tonnes

PortNumberStorage
of elevatorscapacity
Bahia Blanca4400,000
Necochea2160,000
Buenos Aires2200,000
Rosario-Rio Parana121,216,000
San Martin-San Lorenzo81,860,000
Total283,836,000

   Source: U.S. Department of Agriculture

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