(Adds Cargill’s emailed statement)
SAO PAULO, April 26 (Reuters) - Cargill Inc is part of a group of grain trading companies analyzing whether to build Brazil’s Ferrogrão railway, which could require investments of up to 15 billion reais ($4.8 billion), O Estado de S. Paulo newspaper reported on Wednesday.
Luiz Pretti, Cargill’s chief executive officer in Brazil, told Estado in an interview that members of the consortium that could participate in the Ferrogrão project are in touch with the government to discuss its feasibility.
Ferrogrão railway would allow Brazilian grains to be shipped out of ports in the north of the country, Estado said. Pretti reiterated Cargill’s plans to invest up to $127 million in the country this year to grow operations amid a bumper soybean and corn crop.
Running about 1,100 kilometers, Ferrogrão will link grain producing regions of the Center-West to the Port of Miritituba, in Pará state, curtailing the need to travel along a troublesome road that still has long unpaved section that makes passage nearly impossible during rains.
Cargill press representatives confirmed Pretti’s remarks to the newspaper in an emailed statement.
The Brazilian unit of U.S.-based Cargill invested 3.8 billion reais in the country over the past six years, Estado wrote, adding Latin America’s largest economy is Cargill’s second most important market behind the U.S for investments.
Cargill’s consolidated net income jumped 61 percent to 670 million reais last year as Brazil’s agribusiness segment “continued to expand and has been, for the most part, resilient to economic challenges,” according to its financial statement published earlier in Estado.
Cargill originated, processed and traded 24 million tonnes of agricultural products in 2016, a 14.3 percent drop from the prior year.
The company told Reuters crop failure impacting corn and soybeans, two of the main commodities it trades, led to 2016’s volume drop.
Cargill directed 75 percent of the volumes produced in Brazil to export markets.
“The fall in the volumes traded ... was compensated by higher product mix efficiency and assertive financial positions,” Cargill told Reuters.
Net revenues were virtually stable at 32.3 billion reais last year.
Earlier in April, Brazil’s agricultural statistics agency Conab raised the estimate for the country’s 2016/2017 soybean crop for a fourth time. The agency also rose corn output forecasts in the season.
$1 = 3.1476 reais Reporting by Ana Mano and Gustavo Bonato; Editing by Bernard Orr