São Paulo – The Brazilian railway industry had one of its best performances in history last year and is optimistic regarding perspectives for growth of railway transport in the country. According to the president at Abifer, the sector company association, Vicente Abate, the activity had revenues of 4.2 billion Brazilian reals (US$ 2.4 billion) in 2011, growth of 35% over 2010, a record.
He pointed out that expansion of the sector, whose revenues more than doubled since 2007, is a reflex of greater Brazilian exports of iron ore and grain. “There is need to transport these products, which typically use rail transport,” said the executive.
With regard to grain, there is also great repressed demand for railway transport. Many of the producer regions are not connected to the railway grid and products are transported over long distances by lorry.
This situation creates perspectives for expansion of the network and, consequently, further business for producers of locomotives and railway wagons. According to Abate, the National Transport Logistics Plan forecasts a railway grid growing from 30,000 to 50,000 kilometres in 2025, reaching 41,000 up to 2020.
That is not to mention the urban transport projects, with expansion of metro lines, suburb trains, the introduction of light rail systems and monorails. Apart from that, there are projects for passenger lines to the interior and the High Speed Train (TAV), scheduled to connect Campinas and São Paulo to Rio de Janeiro.
In 2011, Brazilian industry produced 5,616 railway wagons, 72% more than in 2010. It was the best year since 2005, when production totalled 7,600 units. In the case of locomotives, production was 113 units, against 68 in the previous year. Production of passenger cars totalled 336 units, as against 400 in 2010.
For this year, forecasts are more conservative: between 3,500 and 4,000 wagons, 110 locomotives and 340 passenger cars. According to Abate, this does not point to a reduction in production in the long run, as the industry’s cycle varies with one year of good performance followed by another weaker year. “It is still a good [production] level,” he pointed out. The figures, according to him, are within the global average forecasted for the decade.
Export
Brazil also exports railway stock. In locomotives, sales abroad totalled 25 in 2010, five in 2011 and ten should be shipped this year. Among the clients for Brazilian producers is Jordan, as well as countries in Africa and Latin America.
Apart from GE, which has been producing locomotives in Brazil for several years, locomotives by the North American EMD should start being produced in the country this year, according to the president at Abifer. “This shows that the [Brazilian] market is promising, not just for local sales, but also for export,” he pointed out.
In the past, according to Abate, the sector exported more, including metro cars for cities like New York, Santiago and Buenos Aires. However, economic transformations, specially the international financial crisis and the depreciation of the dollar, have inhibited trade.
*Translated by Mark Ament
