annual report 2017

Port terminal, São Luis, Maranhão


VLI´s intermodal terminal, São Paulo.


VLI is an integrated logistics solution company, connecting railways, ports and intermodal terminals in ten different Brazilian states. With more than 6,700 employees, it operates a fleet of approximately 900 locomotives and 25,000 rail cars, through which it transports grain, fertilizers, sugar, steel products, fuel, biofuels and iron ore. Since 2014, Brookfield has held a 26.5% stake in VLI, where we are partners with Vale (37.6%), Mitsui (20%) and FI-FGTS (15.9%).







Tiplam, Santos.


VLI operates in three major industries: Agriculture, representing almost 60% of the company’s revenues and including transportation of grain, fertilizer and sugar; Steel and Construction (approximately 25% of sales) including coal, iron ore, steel products and pig iron; and the Industrialized segment (responsible for approximately 15% of revenue), which covers fuel, pulp and limestone.

The company ended 2017 with BRL 4.5 billion in net revenues, 27% higher than the previous year, while EBITDA grew 22% and hit approximately BRL 1.8 billion. The country’s record soy crop in 2017, the increase in Brazilian corn production and the stabilization of the steel industry provided opportunities for VLI. The company closed the year with an increase of 19% in the volume transported on railways and 42% in the cargo volume moved in ports, compared to the previous year.

On the railways, the reduction of the variable unit cost with respect to 2016 was 6%, reflecting productivity gains and process improvements. In the ports, the reduction of the variable unit cost with respect to 2016 was 28%, mainly due to the increase in cargo volumes transported.



Investments exceeded BRL 1 billion in 2017, with BRL 526 million for the execution of capacity expansion projects and BRL 513 million for maintenance of existing operations. Major projects include:


TIPLAM expansion

Started in 2013, this project alone required an investment of BRL 2.7 billion, and complements the logistical integration of the Center-Southeast corridor, expanding capacity for grain and sugar exports and for fertilizer imports. Warehouses 2 and 4 (Grains and Sugar) and Berths 2 and 3 began operations in 2017.


Yards, Refueling stations and other projects

The year of 2017 was fundamental for the consolidation of projects set forth in the VLI Business Plan, with significant physical progress of the portfolio, such as 98.76% of the Paulista Yard and 98.89% of the Ribeirão Preto Yard. The progress of 99.40% of the Imperatriz Yard also stands out. Its purpose is to serve the growing volume of products transported on the North-South Railway. In addition to the projects listed above, it is important to mention the Ponta da Madeira Program in São Luiz – Maranhão (98.80% physical progress), the delivery for operation of the Complexo Mineral Patrocínio refueling station and the Ibiá bridge and loop, both in Minas Gerais.



The Agriculture industry will continue to weigh significantly in the company’s revenues, with an emphasis on grain and fertilizer transportation, followed by the steel industry, which should follow in recovery. We believe that VLI is very well positioned to meet these demands with some significant competitive advantages.

The Brazilian grain crop forecasts for 2017/2018 have remained favorable, with production estimated by the IBGE at 224.3 million tons. In the central region of Brazil (Goiás, Distrito Federal, Triângulo Mineiro and São Paulo), known for its strong agricultural production, VLI operates railways and intermodal terminals that receive cargo from its clients and perform outflow or supply via two important corridors – Center-East and Center-Southeast – which link, respectively, these regions to the port complexes of Tubarão (Espírito Santo) and Santos (São Paulo), as well as Tiplam, also in Santos. VLI is also well positioned in the agricultural frontier that covers the states of Maranhão, Tocantins, Piauí and Bahia (Matopiba). With the North-South Railway and two integrator terminals (Porto Nacional and Palmeirante, both in Tocantins), VLI hauls grain to the São Luís Port Terminal, with a complete infrastructure of warehouses and silos.

In the Steel industry, recovering demand on the part of the clients and normalization of the product inventories has been resulting in raw steel production growth, including within the VLI area of influence. The Center-East Corridor serves one of the major poles of the Brazilian steel market with a privileged logistics flow, with a heavy flow of inputs and finished steel products, connecting the states of Espírito Santo and Minas Gerais via the Center-Atlantic Railway (FCA) and the Praia Mole Terminal in the Tubarão Complex (Vitória – Espírito Santo). The Center-North Corridor stands out in the outflow of pig iron destined for exportation, integrating the Estrada de Ferro Carajás (EFC) with the São Luís Port Terminal (Maranhão).