Ultra aims to be giant in oil and gas business

One of the most traditional business groups in the country, with net revenues of R$81.2 billion last year, Ultra wants to be a giant with a new face. By selling Oxiteno, a specialty chemicals provider, and pharmaceutical retail chain Extrafarma, the conglomerate will finance the consolidation of its operations in oil and gas, a step that will eventually lead to the natural gas market, shareholder and Chairman Pedro Wongtschowski told Valor.

On the way to buy Petrobras's Refap, its first refinery Ultrapar has not only changed its strategy and portfolio. Around 70% of the management team and the board of directors was renewed in the last three years. The most recent change, confirmed Wednesday evening, includes the arrival of Marcos Lutz (ex-Cosan), Otávio Castello Branco Neto (from Pátria) and José Luiz Alqueres (a leading energy specialist in Brazil) to the board. In addition, Mr. Wongtschowski's successor will be picked over the next two years.

The journey toward a "new" Ultra has been eventful and takes place under strong scrutiny from investors, who have been questioning Ipiranga's margins, in particular, for some time. According to Mr. Wongtschowski, the fuel distributor's operations are also under review.

Outside the walls of the group, the Covid-19 pandemic has put pressure on results and hit hard the fuel operation, its largest business. The economic and political environment in Brazil has also deteriorated. "The moment is bad for the Brazilian economy," the executive acknowledges. But the shareholders keep their bets on the long term and believe that the country can become an energy and environmental powerhouse if it corrects its course.

A leader of the group Unidos pela Vacina, Mr. Wongtschowski considers that the purchase of vaccines against Covid-19 by the private sector for its own use is neither appropriate nor pertinent, and that the worsening of the Brazilian image abroad is "deserved." But he sees conditions for reversing this picture in the coming years. Read below the main excerpts from the interview.

Valor: Brazil is going through a delicate moment, with an unchecked pandemic and a damaged image abroad. At the same time, Ultra is putting in place a new strategy. How do you see this situation?

Pedro Wongtschowski: The moment is bad for the Brazilian economy. We have serious fiscal problems and inflation risks ahead. Yet a company like ours must look at the longer term. We are not here for the next two years. We are here for the next 20 years. This is how we behaved in the past, this is how we continue to behave today. That is why we attended the auction last week, bought a new position in Itaqui (Maranhão) and committed ourselves for the next 30 years. It is a demonstration of confidence, that Brazil's macro conditions in the long term are solid enough to justify investments in the country.

Valor: In the short term, what could the country do to control the pandemic and expand the economy?

Mr. Wongtschowski: I have defended the urgent need for tax reform, administrative reform and the repositioning of Brazil on the external front, especially with the environmental issue being treated in the appropriate manner. And I have also participated in the group Unidos pela Vacina, led by [Magazine Luiza's chair] Luiza Trajano. We are doing everything possible to get all Brazilians vaccinated, ideally by September, in order to try and control the pandemic.

Valor: Do you think the government's strategy to face the pandemic was right?

Mr. Wongtschowski: When I joined, as an...

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