Energy and agricultural conglomerate Cosan is considering whether to branch into road logistics to take advantage of Brazil’s troubled transportation system, people with direct knowledge of the matter said.
The holding group that controls the company, known as Cosan Ltd., has set up an internal working group through its subsidiaries to study if it should create a new unit or acquire a stake in an existing firm, one person said, asking not to be named as the information is private. Preliminary conversations have started with some potential target companies such as CargoX, an Uber-like enterprise that links truckers and companies that demand cargo transport service, the person said.
Sao Paulo-based Cosan already controls Rumo Logistica SA, the nation’s largest train and port operator. For the conglomerate, entering the road segment would not only consolidate its existing cargo business but also help create value from the inefficient transport system, one of the people said.
The move echoes plans from two major soybean traders—the local unit of Louis Dreyfus Co. and Amaggi—which have asked antitrust regulators for approval to create a joint venture that will intermediate freight negotiations through a digital platform, according to documents filed to the agency known as Cade. Amaggi is owned by the family of Brazilian Agriculture Minister Blairo Maggi.
Brazil’s high dependence on road transportation became clear earlier this year, when a nationwide truckers strike paralyzed the country. There are about 150,000 transportation companies operating, most of them small and disorganized, cargo transportation industry lobby NTC & Logistica said earlier this year. Of the 1.77 million trucks, 37 percent are owned and operated independently, according land transport regulator ANTT.
Cosan said in a statement that it’s always evaluating opportunities which can add value to the company, but declined to comment on specific plans for road logistics. CargoX declined to comment.
