The Brazilian Parliament has approved wide-ranging plans to reform the country’s postal operatorCorreios and enable it to expand and diversify in areas such as logistics and electronic
services.The ‘milestone’ reform law was passed last week by the Senate following the earlier approval bythe House of Representatives and now only needs formal confirmation by President DilmaRousseff.
Correios, which had a double-digit profit margin last year, is benefiting from Brazil’s strongeconomic growth in recent years and aims to grow into a broader company with a more diversifiedportfolio. Its express business Sedex is already a major player in the Brazilian expressmarket.
Under the new statue, Empresa Brasileira de Correios e Telegrafos (ECT, more generally known asCorreios) will be able to diversify into new business areas such as logistics, electronic postalservices and financial services, create subsidiaries, set up partnerships and buy stakes in otherfirms. It will also be able to operate abroad.
Opposition parties and trade unions, however, claim that the new law could pave the way forpostal privatisation in the future. Randolfe Rodrigues (PSOL-AP), for example, said thattransforming ECT into an equity-based company was “clearly opening the way to privatise thisimportant national company”.
Welcoming the Senate’s vote, company president Wagner Pinheiro de Oliveira commented: “Theapproval is a victory for the company and all employees of ECT.” The company, which has a workforceof more than 107,000 employees, said it now has the means to compete on an equal footing with largemultinational logistics businesses and to provide more efficient quality services for Braziliancitizens.
In 2010, Correios increased revenues by 10.5% to R$12.7 billion (€5.4 billion) and delivered atotal of 8.8 billion items, according to its annual report. It made an operating profit (EBITDA) ofR$1.4 billion (€600 million), representing a 12% profit margin. This was the best result since2007. The net profit was R$827 million (€354 million) compared to R$117 million in 2009.
Mail/communication services remained a growth business, increasing revenues by 9.3% to R$6billion and with a 4.7% volume increase to 6.2 billion items. The business accounted for just over47% of overall turnover last year. The small but growing Direct Marketing business increasedrevenues by 15.8% to R$1.1 billion last year, with a 17.5% volume increase.
Delivery services, covering express operator Sedex and the ‘economic delivery service’ PAC, isthe second-largest business area and represented 29% of revenues last year. The business segmentincreased revenues by 13% to R$3.7 billion while volumes of documents and goods rose 13% to 230million items.
However, Correios’ international services, including the international express product SedexMundi, EMS and parcel product Exporta Facil, currently only account for 1.7% of turnover. Logistics(Correios Log) represents 2.6% and financial services (Banco Postal) 2.7% of turnoverrespectively.
