The Brazilian railway components firm, Companhia Brasileira de Ferro e Aço CBFA), aims to double its revenue in the coming years, driven by the expected growth of railway initiatives and projects in the country. The company recently announced the implementation of a new railway bogie assembly line at its headquarters in Osasco city, in São Paulo state, as part of an expansion process. "We posted in 2020 a revenue of 30 million (mn) reais (US$5.6mn) and we likely close 2025 with revenue of 170mn reais. Our plan is to reach 300mn reais-350mn reais in 2028, 2029, while we should invest up to 100mn reais in the next two to three years, also including possible acquisitions in the sector," said Dennis Ramos, president of CBFA, in an interview with BNamericas. After several years of stagnation, particularly in terms of freight transport projects, the Brazilian railway sector is showing signs of recovery. "In 2004 and 2005, Brazil produced 7,200 wagons; it was at its peak. In recent years, the average has fallen to 1,500-1,800 wagons. We believe a new cycle of expansion is coming. I see the market reaching 3,500-4,000 wagons in the next five years," said Ramos. In light of this scenario, CBFA entered the segment of maintenance of special wagons, mainly steel wagons, which transport cargo from plants. Founded in 2010 with a focus on manufacturing railway axles, the company also maintains wheel sets for freight cars, locomotives, and passenger cars. In 2022, it also began producing springs for the railway market and other sectors. According to the executive, investments in new railways, projects on existing lines and the need to renew the country's train fleet justify the optimism. "In Brazil, we have more than 24,000 wagons that are over 50 years old. There is a bill [proposal] to renew this fleet. In the US, after 50 years, the railcar practically retired, with increasingly rigorous inspections," said Ramos, advocating for fleet renewal in the country to increase safety. Despite expectations of expansion, the executive believes that railway projects in Brazil could grow even more, both for cargo and passenger transport, especially through intercity trains. "We are many years behind. There is a lot to happen. If the country had better legal security and 10-year planning, we would be at a different level," he said. The Brazilian government has been seeking to unlock new freight railway projects through renegotiations for the early renewal of concession contracts, in order to raise funds for new projects. However, the pace has been slower than expected. Meanwhile, the CBFA is also evaluating opportunities outside Brazil. "We're preparing. At the end of last year, we received AAR certification [AAR-M1003, from the Association of American Railroads in the United States]. This certification is mandatory for operating in the United States, Mexico, and Canada. We haven't entered that territory yet, but for us, the most important thing was the globally recognized seal on certified products, which improves reliability in any market. This adds value and is part of our goal of having a robust company with governance, audits, and a board of directors," Ramos underlined. "Many in Mercosur [the trade bloc formed by Argentina, Brazil, Paraguay, and Uruguay] buy from China, but we're right next door, with a logistical advantage. We've adopted a strategy of advanced inventory close to the customer to compete in the short term. In the long term, we know it's more difficult. Today, we export very little, less than 5%. With AAR [certification] and our ability to deliver in 60 days, while imported products can take 150-180 days, we hope to increase our export share to 15%-25% in the coming years. We're in talks with Saudi Arabia, Australia, and other locations," he added. (The original version of this content was written in Portuguese)
