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Our River Business, which we operate through our subsidiary UABL, has 591 barges and 30 pushboats with approximately 1,005,000 dwt capacity. We currently own 535 dry barges that can transport agricultural and forestry products, iron ore and other cargos and 56 tanker barges that can carry petroleum products, vegetable oils and other liquids. We believe that we have more than twice the number of barges and dwt capacity than our nearest competitor in this river system. In addition, we use one 35,000 dwt barge designed for ocean trading, the Alianza G2, as a transfer station to provide storage and transshipment services of cargo from river barges to ocean export vessels. We operate our pushboats and barges on the navigable waters of the Parana, Paraguay and Uruguay Rivers and part of the River Plate in South America, also known as the Hidrovia Region. At over 2,200 miles in length, the Hidrovia Region is comparable to the Mississippi River in the United States and produces and exports a significant and growing amount of agricultural products. In addition to agricultural products, companies in the Hidrovia Region are also involved in the production of other goods, including forest products, iron ore, and pig iron. Key factors driving cargo movements in the Hidrovia Region are agricultural production and exports, particularly soybeans, from Argentina, Brazil, Paraguay and Bolivia, exports of Brazilian iron ore, regional demand and Paraguay and Bolivia imports of petroleum products. A significant portion of the cargos transported in the Hidrovia Region are export or import-related cargos. Argentina, Bolivia, Brazil and Paraguay, produced about 41.5 million tons, or mt, of soybeans in 1995 and 95.5 mt in 2009, a compound annual growth rate, or CAGR, of 6.1% from 1995. Production for these countries for 2010 is estimated at 130.3 mt. These countries account for an estimated 45.3% of world soybean production in 2010, down from 52.4% in 2008, due to a 20.4 mt decrease in South American soybean production in 2009 caused by significant droughts. Their market share has grown from only 30% in 1995. According to industry sources, within the five countries of the Hidrovia Region, acreage harvested in soybeans has increased from approximately 18.9 Mha (million hectares, 1 hectare = 2.47 acres) in 1995 to an estimated 41.7 Mha in 2009, a CAGR of 5.8%. Further, with advances in technology, productivity of farmland has also improved. Through joint ventures, we own and operate terminals at certain key locations to provide integral transportation services to our customers from origin to destination. We utilize night-running technology, which allows for night navigation and improves asset efficiency. We also own a drydock and repair facility to carry out fleet maintenance and have a long-term lease on another repair and maintenance yard. We have finalized the construction of a new shipyard where we plan to build up to 52 barges per year. The facility is in currently in operation and has launched its first barge during the second quarter of 2010. |
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