Cosan announced last night the biggest leadership restructuring since its IPO 20 years ago.
Rubens Ometto has appointed Marcelo Martins as CEO – his right-hand man and the executive in charge of all M&As at the company – and handed over to Nelson Gomes, former CEO of Compass and current CEO of Cosan, the mission to execute a turnaround at Raízen, which is facing market skepticism about its performance.
Martins spoke with Brazil Journal about how Cosan plans to overcome challenges and return to its former glory.
Why did Rubens decide to make these changes now?
Rubens is a very pragmatic guy. He always has been and still is. He saw that Raízen, even though performing reasonably well, has not been generating enough cash to continue with its aggressive growth plan and reduce its leverage. In this situation, it has also been unable to pay dividends at historical levels.
Raízen’s shareholders expect it to be the top performer in its sector.
Second-generation ethanol has proven to be a challenging business, but you have a partner, Shell, that is very committed to the energy transition. Have the minds of Shell and yours evolved on this business in recent years?
We believe in the solutions brought by Raízen on the path to energy transition. However, Shell has never demanded that Raízen invest in businesses that do not have a proper return for its shareholders.
Therefore, we are currently focused on a review of the company’s business plan, a task that we and Shell started together months ago.
What will be your main focus at Cosan?
Cosan will look inward and tidy up the house. We have one of the most talented executive teams in the country. To give you an idea, in this transition, all positions are being filled with professionals from within the company.
In addition, we have leading assets in most of our sectors, and a strategic vision that has already generated significant value in many of these assets. But rapid growth and adverse circumstances have also brought more risk to the business. Now, it’s time to recalibrate things.
Market concerns have focused on Cosan’s debt. What is myth, and what is reality in this?
We have a level of debt that, in our view, is above what the current situation allows. In this situation, not only do we have difficulty substantially reducing our leverage, but it also does not allow us to do what we do best: invest in businesses that generate value in sectors that we consider the company’s expertise.
Our capital structure has worsened in recent years, given the investments we made and the fact that some have not performed as expected. This at a time when the cost of capital for companies is higher than anticipated.
Can we expect transactions that will lead to deleveraging of Cosan in the near future?
Our goal is indeed to reduce the group’s debt, maintaining a quality portfolio, weighted by risk. We have always been responsible both in investments and in managing our capital structure, and now we will focus on that again.
Is the current partnership model calibrated to retain and attract the people you need?
We are working with Claudia Falcão – our new head of human resources – on redesigning the partnership structure according to the company’s current needs and the group’s future vision. Claudia is a very experienced person who worked at Grupo Globo for 10 years and is making a huge difference here.
What is your view on the position in Vale?
We are very pleased with the choice of the new CEO, who is a competent person with a great ability to build the relationships that the company needs. That said, we actively manage our portfolio, and Vale, like any other business, is constantly under review. In fact, since acquiring the stake, we have made some significant changes to our position.
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
