Uberaba enjoys profitable chemical reaction

Uberaba’s growing importance as a major centre for agribusiness in Brazil’s TriânguloMinero region has increased its investment appeal along the whole value chain of the industry, including chemicals. The city now hosts the largest phosphate fertiliser plant in Latin America, and has developed a whole chemical district around it. A chemical belt is now taking shape (though not without its hiccups), luring firms to set up shop locally and thus avoid other saturated urban areas.

“This is a district exclusively for chemical industries – residential areas are 25 kilometres away from here,” says Andrea Cristina Mujali Ribeiro, head of industrial operations at Ourofino, a Brazilian company producing crop protection products in Uberaba. “This gives companies a chance to operate in safety. Should any accident occur, we don’t have any resident around.”

In splendid isolation

The district gives companies located in the area preferential access to the Cerrado agriculture region, which is a major buyer of crop fertilisers and crop defenders. “Our competitors producing elsewhere have to go past our facilities to access the region,” says Ms Mujali.

Its isolation from the rest of Uberaba, which has to be respected by law, makes the district an appealing proposition compared with sites in denser urban areas such as São Paulo and Rio de Janeiro. Communities there have grown around the chemical industries that first located in Brazil decades ago, creating problems for local authorities given the hazardous nature of the industry.

The environmental safety of the Uberaba site is now being boosted by a new local 'zero landfill' incinerator able to process the residual waste proceeding from all the chemical productions in the district. Established a couple of years ago, the facility was developed by Neotech, a local company that carried out an initial investment of 42m reias ($11.2m) and is about to invest another 55m reais to expand it in 2019.

“We have here 10 chemical companies in this belt. We have four customers now, we will get everybody on board by the end of the year,” says Neotech managing director José Affonso dos Reis Júnior.

Big names

The district has grown over the years around a phosphate fertiliser plant with a capacity of 120,000 tonnes per year, the largest of its kind in Latin America, inaugurated in 2014 by troubled state mining behemoth Vale. The plant is now undergoing a transition as Vale sold its fertiliser unit amid great financial difficulties to US group Mosaic, which currently employs 2000 people in the facility. 

 “Uberaba’s infrastructure and strategic location are key to the success of operations in this city,” says Jeffry Golwitzer, Mosaic’s vice-president of operations. “Mosaic’s complex is located close to Rio Grande, which provides ready access to water critical to its operation. The site also has the favourable logistics to receive raw materials and ship finished products to the intended destinations.”

Another troubled behemoth, Petrobras, had to abandon the development of an ammonia plant after investing $1bn in the site. The plant is now up for sale, although the financial feasibility of the project in current market conditions remains questionable.