Seeking solutions: EPR’s vision for long-term supplier collaboration in Brazil

Brazilian group EPR, a JV formed by infrastructure firm Equipav and fund manager Perfin, recently announced an initiative to attract more suppliers considering the significant number of projects it has in the highway sector.

As part of this process, the firm is holding meetings with suppliers to outline its requirements.

With operations in Minas Gerais and Paraná states, EPR currently manages more than 2,300km of highways under five concession contracts. 

Under these contracts, the company has obligations to invest 31.6bn reais (US$5.4bn) over the next 30 years in widening works, building additional lanes, implementing electronic toll collection systems and providing user support services. A significant portion of that will have to be invested over the next seven years.

Carlos Eduardo Xisto, the company's engineering director, talks with BNamericas about what the firm is looking to achieve.

BNamericas: What are the objectives of the meetings that the group EPR is organizing with potential suppliers?

Xisto: The aim of these roadshows is to showcase our operations. We're very active in the market and currently rank as the fifth-largest highway concession company in the country.

Our company, formed by the Equipav and Perfin groups, wants to present our project portfolio, including contracted projects, and make it clear that we're looking for partners to help us advance our capex initiatives.

BNamericas: What is the capex plan for the coming years?

Xisto: Of our total announced capex, 16bn reais will be invested over the next seven years, and moving forward with this plan is a major challenge.

We've already commenced work across our five assets and will soon begin phases related to capacity expansion and paving.

BNamericas: What type of suppliers are you looking for?

Xisto: We’re interested in engaging with large engineering firms, particularly those experienced in concessions and pavement management.

We’re looking for a long-term relationship that prioritizes precision in project execution and quality management, ensuring successful expansion works.

Supplier compliance is also crucial for us. We want partners who prioritize safety and worker protection.

However, in these meetings, we will also listen to suppliers, to build solutions collaboratively and understand what would make sense for them to join us. This will help us build partnerships that emphasize safety and respect for the environment.

BNamericas: Are there additional aspects you consider important when selecting suppliers?

Xisto: We seek suppliers who provide material solutions and innovative technologies, particularly in asphalt and rigid pavement.

Although some suppliers are already known to us, we want to strengthen our connections. Financial stability is also key, given the scale of our projects, which is why we’re committed to supporting supplier training and setting realistic expectations.

BNamericas: The road sector in Brazil is experiencing a cycle of high investments. What are the current bottlenecks?

Xisto: Labor availability is a critical issue and could become a bottleneck.

With the investment portfolio covering federal and state highways, if all projects progress, labor will be a sensitive area.

Input costs could also fluctuate, with oil prices – affected by geopolitical factors – posing a risk. This is why technology is essential to mitigate some of these uncertainties, especially in asphalt production. We're looking for partners who are aware of this.

BNamericas: What are the group's plans for the upcoming concession auctions?

Xisto: EPR approaches all projects with discipline and caution. We’re always open to evaluating new opportunities.