State-owned company sees “horizon” to increase public stocks and expects to increase operational grain storage capacity by 300 thousand tons
The National Supply Company (Conab) and the National Bank for Economic and Social Development (BNDES) have entered into a partnership to facilitate the sale of nine Conab properties that are inactive. There are eight warehouses and one space in a commercial building. According to Conab’s preliminary estimate, these properties have a combined market value of around R$175 million.
According to the president of the state-owned company, Edegar Pretto, the resources from these operations will be directed to expanding the Company’s storage capacity. Currently, the operational capacity, ready for use, is 900 thousand tons for grains. The increase would be another 300 thousand tons.
“We have set aside properties that are unused and that are generating expenses for the Company [R$8 million per year, according to Conab]. BNDES is responsible for creating a specific model for each of these properties and this resource, 100% of it, will be invested in the warehouses”, the president told journalists this Wednesday, the 12th.
BNDES will hire an agent to organize the sale of the properties, as well as the legal part of the contracts, as explained by the bank’s Director of Planning and Project Structuring, Nelson Barbosa. “BNDES talks to interested parties, organizes the contracts so that these investments are made in the assets that Conab wants, with the objectives that they indicate”, he stated.
According to the Company, the list of properties under negotiation is composed of:
one floor in a commercial building, in Brasília (DF), estimated at R$ 5.83 million;
four conventional warehouses located in Santa Helena (GO), Palmeira de Goiás (GO), Paraúna (GO) and Sinop (MT), valued at R$12.4 million, R$8.27 million, R$12.47 million and R$61.2 million, respectively;
two bulk warehouses located in Rio Brilhante (MS) and Alta Floresta (MT), estimated at R$2.54 million and R$33.38 million;
two silos located in Dourados (MS) and Cassilândia (MS), with preliminary market values of R$31.15 million and R$3.03 million, respectively.
“For each of these assets, we will analyze the vocation, we will look for interested parties and then we will see what the value of this asset is, what potential the interested party can offer in exchange”, reinforced Barbosa. “Whoever eventually takes the property will already take on the obligation of investment. The two things are tied together. This speeds up the investment.”
The counterpart of potential buyers will be directed to the renovation of other warehouses already identified by Conab. The properties that will receive the investments are located in Rio Verde (GO), Pontalina (GO), Goiânia (GO), Brasília (DF), Campo Grande (MS), Sorriso (MT), Rondonópolis (MT) and Uberlândia (MG).
The Minister of Agrarian Development, Paulo Teixeira, stated that these funds facilitate the internal process, as they do not enter the federal budget and are directly allocated to the actions of the renovation of the warehouses. “A financial equation that will not require budgetary resources. Hence the importance of this financial engineering,” said Teixeira.
The expectation presented by BNDES is that the first call for proposals contemplating the business conditions will be opened by the end of this year. Each property will have its own call for proposals and there will be a priority according to the degree of attractiveness analyzed by the bank.
Conab sees a horizon for the formation of robust public stocks
According to the Company’s president, this initiative is in line with the determinations of the President of the Republic, Luiz Inácio Lula da Silva, who called for the return of robust stocks. “We feel that public stocks are a necessary and very important policy for the Brazilian people,” stated Pretto.
He also explained that Conab has a “horizon” to further expand the stock of wheat, corn, rice and other products, with the intention of bringing “price balance when some products rise for the consumer and, with this, guarantee food security.”
In addition to the resources projected by the sale of unused properties, Pretto stated that Conab should invest R$15 million of the budget in the renovation of warehouses. The Company also hopes to establish a partnership with Itaipu Binacional, which should also increase the budget for improvements to the warehouses. “We have a partnership with Itaipu Binacional, which will renovate the three warehouses in Paraná, including the one in Ponta Grossa, which is the largest unit that Conab has, and which will provide us with R$55 million.”
New products may be included in ProVB
Another initiative being studied by the state-owned company is to increase the list of products that are part of the Over-the-Counter Sales Program (ProVB). Currently, only corn is part of the program, which promotes direct sales of stocks to small rural farmers.
“We are revamping ProVB to increase the number of points of sale and also the number of products. We expect to sell soybean meal, cottonseed, sorghum and [for this] we need more investment,” said Pretto.“We are revamping ProVB to increase the number of points of sale and also the number of products. We expect to sell soybean meal, cottonseed, sorghum and [for this] we need more investment,” said Pretto.