Ultrapar Mulls Fuel Distribution Buildout

Ultrapar, the Brazilian fuel and gas specialist, hopes to increase ownership of the fuel distribution business in the northeast, central west, and northern regions of Brazil, Pedro Wongtschowski, CEO, tells LatinFinance. “It will be a combination of organic and acquisitive growth,” says the executive. “We don’t have a [specific] budget for acquisitions,” he adds. Wongtschowski notes that he would also not look to hire financial advisors for those purchases since his company’s internal executives know the market well. Earlier this year Ultra completed its acquisition of Texaco’s distribution assets in Brazil, which gave it a 22% share of the Brazilian distribution market, says Wongtschowski. In the south and southeast, the company’s share is 28% while in the northeastern and central regions it is only 9%, says the executive. The company would expect to pay for any new acquisitions with cash. Ultrapar cash and cash equivalents stood at BRL1.6bn in Q2. Leverage is 2x, says the CEO. As for acquiring larger competitors, the executive says he does not see any major distribution assets up for sale in Brazil.