Brazil's Terrana aims to enter the retail market following acquisition: CEO

Brazilian fuel distributor Terrana, acquired by Branson Holdings in December, is looking to expand in the ethanol market, invest in bunker fuel operations, and enter the retail business, new owner and CEO Paulo Narcélio Simões do Amaral told S&P Global Energy.

Terrana distributes ultra-low sulfur diesel (locally known as S10 diesel), low sulfur diesel (S500), bunker fuel, ethanol, and gasoline across Southeast and Center-West Brazil. According to data from the National Petroleum Agency, or ANP, the company, also known in Brazil by its founding name Tobras, ranks eighth among the top 10 distributors in both regions.

Amaral shared plans to invest in bunker fuel operations in Rio de Janeiro and strengthen Terrana's position in the São Paulo ethanol market, particularly in the anhydrous (pure) specification, which is blended with gasoline at a 27.5% ratio in Brazil. He also aims to explore verticalization opportunities, entering the gas station business with the objective of increasing partnerships with unbranded gas stations.

At first glance, the change in the company's leadership does not indicate a drastic shift in its business strategy. Back in August 2023, the distributor began operations in Mato Grosso state, expanding its presence in the Center-West. The company was already operating in the Greater São Paulo region, Rio de Janeiro, Minas Gerais, Espírito Santo, and Goiás, and its entry into Mato Grosso was seen by the market as a strategic move to capture new markets in the Center-West.

Amaral, Branson Holdings' sole partner, acquired the distributor on Dec. 30 from US-based World Kinect Corporation. The acquisition's financing came from an institution that decided to remain anonymous in the contract, said Amaral.

"I am taking a financial and operational restructuring position," he said.

Terrana has 90 days to complete the integration with the new controlling shareholder and Amaral plans to complete the process by the end of February, he added.

Russian diesel

Amaral also said the company would not have restrictions on operating with Russian-imported product. Russia-origin cargoes gained space in the Brazilian market for its competitive prices since the start of the war in Ukraine, competing with US cargoes for the lead importer position.

Brazilian officials impose no restrictions on Russian diesel imports. However, some companies have previously refrained from purchasing Russian fuel due to internal compliance policies.

Terrana sold 966,360 cu m of gasoline, ethanol, bunker fuel, and diesel from January to November 2024, a slight decline from the same period in 2023, when sales reached 970,830 cu m, according to ANP.

In 2024, the Southeast was Terrana's primary distribution market, accounting for 95.47% of its sales from January through November. During this period, the company ranked as the sixth-largest distributor in the region.

Amaral brings experience in port operations and company restructuring. Previously, he led Brazilian oil company OGX (currently Dommo Energia) from 2013 to 2017, which was Brazil's second-largest oil company by market value after state-controlled Petrobras before filing for bankruptcy.

Amaral said he would be the distributor's sole CEO at the beginning of the restructuring: "I will later look into opportunities with partner companies to bring in more executives."

World Kinect Corporation did not answer S&P Global's requests for comment.