Volume 10 | Issue 2 | Year 2007

Brazil’s infrastructure qualms have long been a complaint of local companies. The country’s shortfall in terms of railroads, waterways – despite having the largest river network in the world – and even roads is widely known and reported. However, recently, President Luiz Inacio Lula da Silva announced a package of incentives clearly aimed at addressing the problem. And this time around, it is clear he wants the country to be more dependent on railways.

Santa Fé Vagões stands to profit from the new policy. The company is not even two years old and was born as the product of Brazil’s renewed interest in railways. One of its main shareholders is América Latina Logística, or ALL, Brazil’s biggest independent railroad company. The other main shareholder is Besco, an Indian rail-car maker. So, from its inception, Santa Fé Vagões was born to be successful. After all, it had the most important client in the country secured and the experience of a company as Besco, from a country which has one of the broadest and largest railroad networks in the world.

And just recently Santa Fé Vagões realized it could go much further than just supplying ALL with the railcars it needed. Being one of the only rail-car manufacturers in Brazil, Santa Fé wants its products to be present in every corner of Brazil and to start crossing the borders into the rest of the Continent and even traveling to Africa.

The company is more than suited for the task of overcoming all the expected standard differences in such diverse countries. That is because, even only within Brazil, Santa Fé Vagões has to deal with different rail standards. Half of Brazil has rail tracks with approximately one meter in between them and half of it has tracks with 1.6 meters. So, depending on where the railcar will operate in Brazil, it has to be mounted upon a completely different wheelbase.

Food and steel on wheels
Besides, Santa Fé Vagões produces railcars that are more than suited for the needs of the countries in Latin America and Africa. That can be said because most of Santa Fé’s railcars were created to carry minerals, grain or steel. And, as it is known, most of the countries in these continents are commodity producers.

For example, its longest railcar, HFT, was created with grain freights in mind. However, since it unloads from four hatches beneath it, it can be used to carry virtually anything solid in grains or in powder. The HFE is 18.4 meters long and three meters tall. Its real load area, though, is only 17.9 meters long.

Following the same lines, Santa Fé makes four more railcars created with agriculture clients in mind. All of these unload in the same way as the HFE, apart from one, the HFD1, which has side doors. The HFD 1 is 15.1 meters long in all, with a loading length of 14 meters, and 3.7 meters tall. The HFD 2 is the same and the HFD-3 is the biggest of the HFD line, measuring 16.1 meters tip to tip and 15.5 meters in length on the top of the loading box. It stands 3.2 meters above the tracks.

Finally, the HFE follows the same lines of the HFT. It is 17.1 meters long, with 15.8 meters from an end to the top box, and is 3.9 meters tall. Both the HFT and the HFE cater mainly to agriculture and construction industries.

Another big client of Santa Fé’s is the iron and steel industry. Therefore, the company makes five different kinds of railcars to carry everything from iron-ore pellets to steel rods. The HAD is one of these. It is 8.2 meters long and 2.8 meters high. However, its double cone-shaped loading box is only 5.4 meters long.

Its bigger brother, the HAT, also has a double cone-shaped loading box. But it is 10.2 meters long – 8.1 on the top – and 3.3 meters tall. Then there is the HAS, the biggest in this model series. It is 14.3 meters long, 12.2 meters on the top, and 3.3 meters tall. As its smaller counterparts, it unloads from the bottom, making it a good choice to carry iron-ore pellets, for example.

Two other models are the GFD and the GDE, both more suited for carrying steel products such as steel rolls and rods. The GFD is 14.3 meters long – 13.5 on top – and 2.2 meters tall. It is used by the construction industry. The more steel-specific GDE is taller and shorter in length. It is 2.3 meters tall and has a 7.9 meters loading length, despite its 9.7 meters from one link to another.

The construction industry also has its own industry specific railcar produced by Santa Fé. The FRD is 15.1 meters long, with 13.9 meters on top, and is 3.5 meters tall. And, finally, there is the PED, a fenced rail-car that can be used to transport both building materials and drums loaded with chemical products.

Next stop
Santa Fé has also just hit the market with a new product that promises to be a hit due to its versatility. It is a multiuse railcar of the F type, which means it is more box-like. This railcar has the capacity to carry 87 tons and has a total area of 117 cubic meters. The floor can be shifted sideways, allowing it to be unloaded from beneath while having a perfectly flat floor. Therefore it can be used to carry products from soybeans to cement bags. It can be mounted upon two- or three wheel-sets, so that it can be used in areas where the cargo capacity per wheel set is limited.

Still in the works is a new railcar for liquid products such as vegetable oil and fuel. This soon-to-come washable railcar will be coated with epoxy. “A logistics company could take it to the port with soybean oil and bring it back in with diesel, for example,” CEO Antonio Giudice explains. Santa Fé, he adds, plans to start marketing a container-carrying railcar in the short term as well.

Workforce strength
Besides profiting from the experience of its controlling shareholders, Vagões Santa Fé drew from a wide base of highly qualified former employees of the state-owned federal railroad system, dismantled a few years ago by the Fernando Henrique Cardoso administration. That’s one of the reasons why Santa Fé chose to be based in the city of Santa Maria, in the southern state of Rio Grande do Sul. Santa Maria was formerly a hub of the RFFSA, the acronym for the state-owned company that controlled all of Brazil’s railways before the privatization. “We benefited a lot from the local workforce that was liberated after the privatization,” Giudice says.

The company started operating in the end of December 2005 and produced only 10 railcars in its first month. Since then, however, the business has thrived and within its short life, Vagões Santa Fé has already made over 500 railcars.

The company also has started working in a different niche: refurbishing and fixing old railcars. “The new railroad owners found out that in the old patios of RFFSA there were plenty of rail-cars that could still be used as long as they went through a face-lift,” Giudice says.

To deal with the different rail-track separation standards, Santa Fé has opened an assembly plant in Campinas, in the state of São Paulo. From there it mounts the cars that will operate in 1.6 meter standard tracks. South of São Paulo, most of the tracks are only a meter apart, so the company can mount them at their original plant.

So, Santa Fé adds the best of three worlds: assured consumption of its products from the main railroad company in Brazil, production knowledge of one of the biggest producers in the world, and promising growth prospects of its industry in Brazil. Is there any doubt that this company will keep on track to grow? “It’s all uphill from here,” jokes Giudice.

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