Brazil’s Post seeks to more than double its economic value
The head of Brazil’s postal service spoke of his company’s ambitious growth plans yesterday, particularly in expanding parcel and logistics services and building a significant presence outside Brazil. Wagner Pinheiro de Olivera, president of the Post and Telegraph Company (ECT/Correios) opened this week’s World Mail and Express Americas conference with the bold declaration that his strategy was to take ECT’s economic value from 0.4% of Brazil’s GDP up to a full one percent.
Brazil’s postal service currently handles around 9bn mailpieces a year with a workforce of around 115,000 employees. Last autumn key postal reform legislation went through the national Congress allowing ECT to operate abroad and also make acquisitions of other companies.
Pinheiro said his company was planning for declining mail volumes as other posts around the world have faced, but the growth of parcels and other services like financial services would counter the decline in traditional mail revenues. ECT is also benefiting from social development and a growing Brazilian middle class.
Letters accounted for 61.3% of ECT’s revenues in 2008, and that proportion has dropped to 56.9% as of 2011. Pinheiro said forecasts were for it to reach 42.5% by 2020.
Parcels, meanwhile, are expected to increase from the present 34.8% of revenue to almost half of ECT’s revenue over the next nine years.
Discussing his strategy, Pinheiro said: “We will have a stronger focus on parcels and logistics, but also other services like financial services in the mid-term. Our long-term objective is to internationalise the company.”
New digital and hybrid mail services are on the way, the ECT president said, to continue the Post’s role in interpersonal communications even as letter volumes fade.
“We have been the communications platform for the past 100 years, and in this sense we want our organisation to be the platform for another 100 years,” said Pinheiro,
A big emphasis is being placed on parcels, facilitating e-commerce and also looking to provide integrated supply chain logistics for businesses. On the non-postal side, as well as financial services, through a banking relationship with Banco de Brasil, ECT is developing a mobile phone capability, looking to spread mobile internet access to more areas of the country.
While ECT has a lot of ambitions to continue building up its infrastructure domestically, it is also looking to be more of a global player in the postal market as well.
ECT is looking to open offices outside Brazil, particularly targeting other countries in Latin America. But, Pinheiro indicated that he was looking to work with other postal services outside Brazil and also commercial partnerships where ECT could provide delivery access to almost the entire country.
“We understand the way to continue our company is to use this omnipresence that we have in Brazil to use our postal agencies to provide the digital infrastructure and social inclusion, and really add value to our brand,” said the ECT president.
