Tegma Logística declares the acquisition season opened
After going public and raising R$600 million on the stock exchange, Tegma Gestão Logística, headquartered in the “Frango com Polenta” route in the city of São Bernardo do Campo (São Paulo), declared officially opened the season for acquiring companies that operate load transportation, inventory management and storage activities.
Out of the funds raised, R$300 million were set aside from the primary issue, for the acquisition of companies that promote Tegma’s expansion, currently rated among the major logistics operators in the Country with estimated sales of R$680-720 million for 2007.
Tegma was born from the integration among companies, in 1998, with the name Axis Sinimbu, a product of the unification of logistics operations of three of the most traditional carriers: Schlatter, Sinimbu and Transfer, specialized in the automotive logistics activity, particularly new cars.
In 2001, Axis Sinimbu gave another step towards consolidation when it purchased Ryder, the new vehicles transportation arm that pertained to Translor Veículos, established in 1958 by the businessman Walter Lorch. The U.S. company Ryder, one of the world’s largest carriers, acquired Translor, but did not keep the new car transportation business.
Dominance in new vehicles
Tegma adopted its current name in 2002, with two partners, the Coimex group and Itavema-Sinimbu. Since the going-public process, these two groups now hold two thirds of the capital. The other third is with the market. The major business is the transportation of new cars. Tegma transports one third of the cars produced.
The transportation fleet used by Tegma – to a great extent focused on car transportation – is of 2.5 thousand pieces of equipment, 90% of which belonging to third-parties, the so-called “cegonheiros”, certainly one of the strongest categories among Brazilian truck drivers in terms of growing, high value-added, captive load, which allows for fairly high freight fees and steady renovation of trucks.
Last year, Tegma managed the transportation of 730 thousand vehicles, around one third of the production of cars and light commercial vehicles. In 2007, the company will also account for one third of the vehicles carried, the equivalent to approximately 900 thousand units.
Following its policy of consolidating and expanding to gain scale, Tegma gave its first step towards the operational internationalization when at the end of September it debuted in the Venezuelan new car transportation market, incorporating Tegma Venezuela. The Brazilian company, owner of 25% of the capital, is responsible for the administrative and operating management. The business strategy will be resolved in joint decisions with the Venezuelan partners, businessmen from the automotive industry and who incorporated the Promotora Quinta Rueda C.A.
This is the right moment to enter into this market. The Venezuelan vehicle market has grown in the first eight months of the year, 52.5%, with 302,853 units. “This partnership with local investors will help us getting to know an important Latin American market, where we will initially serve our main customer, General Motors”, said Tegma’s CEO, Gennaro Oddone. The expectation is to expand our participation to other car makers.
80% of Tegma’s revenue derives from the automotive chain – new car transportation and management of car makers’ parking yards and inventories. The remaining 20% derives from other segments. The trend, according to Oddone, is a growth in transports and logistics operations off the automotive segment – situation that is expected to take place with the recent merger of Boni/Gatax and of CLI (Coimex Logística Integrada). These two companies increased Tegma Logística’s revenues by 20% in a first moment.
Tegma covers several sectors. In addition to transportation in the automotive chain, the company carries chemical products, orange juice, pulp and paper, oil byproducts, alcohol and frozen products. It also manages inventories for the telecom, pharmaceutics and electric home appliances industries. “Transportation is our main driver, accounting for 80% of our sales”.
According to Oddone, the consolidation is inevitable in order to grow. “Within five years, the market will have a group of large companies, not more than twenty, with revenues over R$1 billion, capable of following the logistics evolution and meeting customers’ wishes and requirements”, he adds. “One must have scale in order to maintain an area of software projects, where we have eight engineers”, he says.
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