North-South Railroad starts to transport sugar with the opening of a terminal in MG

The Norte-Sul Railway will officially start transporting sugar as of this Thursday (9) with the inauguration of a road-rail terminal in Iturama (MG), which also marks the entry of Rumo, the concessionaire responsible for the railway, into the Minas Gerais market.

Rumo and Usina Coruripe, one of the largest sugar and ethanol groups in the country, will inaugurate the terminal in the city of Triângulo Mineiro after an investment of R$ 95 million, which will allow the flow of 2 million tons of sugar for export by year.

It is estimated that 15 trains of 120 wagons each month depart from Iturama to the port of Santos between this month and October, the peak of the sugarcane harvest in central-south Brazil.

The Norte-Sul, named Rumo de Malha Central, is a railroad whose history has dragged on since the 1980s. On May 13, 1987, the Sheet published an article by Janio de Freitas that showed that the competition for the construction of the railroad had been a farce. In an encrypted form, the results of the winning companies had been published five days earlier.

After several imbroglios, in 2019 Rumo won the auction for the North-South stretch with an aggressive bid of BRL 2.719 billion, 100.9% above the minimum required by the public notice. Until then, the railroad was in the hands of the state-owned Valec.

The total stretch of the railway is 1,537 kilometers long, between Porto Nacional (TO) and Estrela D’Oeste (SP), and was designed to be a kind of backbone of the country’s railway system, allowing connections to other networks. Another section of the railway was already in operation, between Açailândia (MA) and Porto Nacional (TO), under the concession of VLI.

One of the differentials in the new terminal, which was already in the testing phase since last month, is the loading speed, which can reach 1,500 tons per hour, according to the commercial vice president of Rumo, Pedro Palma, and which has the potential to load three 120-car trains a day.

“The initial operations [após a concessão] were in São Simão and Rio Verde, both with soybeans, corn and soybean meal. In Iturama it is an emblematic operation because it is the first for sugar in the central network and the first also for Rumo in the Triângulo Mineiro. The arrival of this Rumo rail access at a cargo capture point in Minas will serve not only plants in the Triângulo, but also in the south of Goiás”, said Palma.

President of Coruripe, Mario Lorencatto said that the terminal should serve 1.15 million tons of sugar from the group itself and the rest from other customers.

“The new frontier of sugar-energy is coming here, including groups from São Paulo. (…)
most of the sugar is exported, so it has 700 kilometers, even a little further away, for mills in Goiás. How do you get to the port of Santos? If it’s a truck, the added value of the business will be in the diesel. The big knot of these operations is the logistic issue, which is now resolved with the completion of the work”, he said.

Initially, the terminal’s operations, which generated 50 direct jobs, will be exclusively for sugar, but, according to Palma, there is nothing to prevent ethanol operations from being carried out, for example, if there is future demand.

“We have been exporting a lot of ethanol to Asia and, if this market is consolidated, it is something to study,” said Lorencatto.

Today, the operating stretch of Norte-Sul under Rumo’s concession is 580 kilometers long, which means that it is not fully completed. The road works on the stretch between Rio Verde and Anápolis have yet to be completed.

When it is fully ready, it will allow the rail connection between the ports of Itaqui (MA) and Santos. “The work is being carried out with the intention of completion, arriving in Anápolis, by the end of 2022,” said Palma.

Rumo will also inaugurate a fertilizer operation in Rio Verde, in the final phase, and foresees a container operation in Anápolis, via Brado, a Rumo company that operates in the sector. For next year, a fuel transshipment terminal is planned in Rio Verde.

The section of Rumo’s central network, upon reaching Estrela D’Oeste, connects with the São Paulo network, also operated by Rumo, which obtained the early renewal of the concession in 2020, which now runs until 2058 – with the obligation to invest R $6 billion.

With Norte-Sul, the concessionaire’s operations will reach Mato Grosso, Paraná, São Paulo, Rio Grande do Sul, Goiás and Mato Grosso do Sul, the main producers in the country, and a total of 14 thousand kilometers of railroads, connecting the main ports.

The rail modal is responsible for transporting 21.5% of cargo in Brazil, according to data from the ANTF (National Association of Railway Transport), a much lower rate than countries such as Australia (55%) and Russia (81%), but higher than that of China (14%).

Coruripe, which has an installed capacity to crush 15 million tons of cane, will reach 14 million tons in the 2022/23 harvest.

Damaged by three consecutive years of drought and severe frost in 2021, the plant is expected to reach full capacity in the next harvest, according to its president.

“The entire sector, São Paulo, Minas, Goiás, Goiás, suffered from the climate issue,” he said. The sugar-energy group is the seventh among the largest in the country.