RIO DE JANEIRO (Reuters) - Brazil’s Vale VALE5.SA said on Wednesday it has created a new logistics company for cargo transport, but it denied media reports it is planning to sell stock in the unit in a spin-off.
Vale, the world’s largest iron ore producer, has extensive rail, port and shipping facilities to move iron ore and other minerals from its mines to clients. It also uses these systems to transport products such as soybeans and steel for private clients.
The company said it created Vale Logistics Integrada SA to manage general cargo assets and to boost its focus on the logistics business, but the company denied a newspaper report last week saying it planned an initial public offering for that business.
“There is no discussion within Vale or any of its controlling shareholders to sell stock in any of its subsidiaries, including Vale Logistica Integrada,” the company said in a securities filing.
Logistics services generated $1.5 billion in revenue in 2010, an increase of 33 percent from the year before. Most of that revenue came from shipping agricultural products, steel products, fuel and construction materials.
Brazil’s rapidly growing economy has put heavy strain on its infrastructure, boosting the government’s interest in expanding the country’s network of highways, railroads and ports. Vale’s railway network is the only form of bulk transportation in some parts of the country.
President Dilma Rousseff this year led a campaign to oust then-Chief Executive Roger Agnelli on the grounds that he was not doing enough to help Brazil’s economic growth.
Reporting by Sabrina Lorenzi, Writing by Brian Ellsworth; Editing by Steve Orlofsky