Story ID: 343
AGS Plans Expansive Growth Globally
By: Richard Pedicini
Caption: Exhibiting for the first time at Heli-Expo, Brazil-based AGS plans to add bases and personnel.
Word Count: 846
Brazil-based AGS Global Logistics (Booth 9050), exhibiting for the first time at Heli-Expo, is eying expansive plans to grow its bases globally. In the logistics field for 22 years, the company experienced a 45 percent increase in sales volume during the pandemic and is adding personnel and locations in Brazil and internationally to keep up with demand.

“Most of our demand comes from Brazil, where our largest clients are,” said CEO Alexandre Gulla, explaining that AGS’s overseas bases build on and support its Brazilian operations.

In Brazil, AGS has several locations in São Paulo and one in Rio de Janeiro. The logistics specialist plans to open another in the port city of Itajaí, in the southern state of Santa Catarina, which offers significant fiscal incentives. “Some of our clients would benefit from operating there, and we’ll take them with us,” Gulla noted.

However, AGS also is looking at growth in the U.S., where its locations in Miami, Houston, and Atlanta will shortly be joined by one in Connecticut to meet the needs of a specific customer.

Elsewhere, its long-established Milan, Italy base is to be joined in the first quarter of 2022 by a base in the south of France and, after that, one in Qatar. Plans call for a large expansion in Asia, Europe, and the U.S., and constant growth in Brazil, Gulla said, including through acquisitions.

Pandemic Growth

This growth is coming despite the constraints resulting from the pandemic. “We opened our 59,000-sq-ft warehouse at Galeão Airport in Rio at the end of 2019, and the pandemic came at the start of 2020," Gulla said. "It was a shock. The AGS Galeão plan focused on aerospace, but health was always part of the plan, and licenses with the sanitary authorities had already been sought. With the pandemic, health became one of the largest niches, along with electronics. After the initial shock, the distribution center worked 24/7 throughout the pandemic.”

Gulla described the operational difficulties and challenges that the company has faced during the time. “Flights were canceled, ships didn’t arrive,” he said. But he added that “during the pandemic, AGS stayed alive, grew, and fired no one. On the contrary, headcount grew by 30 percent and is now in the range of 200 to 250 people.

“There was an increase in the number of packages, in tonnage, and in dollar volume, overall up 45 percent during the pandemic,” which came with changes in the composition of AGS’s business, Gulla said. “There was a great increase in charter flights, always cargo. One case was respirators, flown from Turkey, distributed at our Galeão hub, and transported in record time to their destinations in Brazilian states.”

Aviation Market Roiled

The Brazilian aviation market—a major segment for AGS—was affected unequally by the pandemic. Gulla puts AGS’s aviation customers into three categories: commercial fixed-wing; executive fixed and rotary wing; and offshore rotary wing.

“Offshore rotary was reduced but stayed alive. Executive aviation had an increase in demand for parts as it flew more than ever. Commercial aviation suffered the most with an abrupt drop in demand, as out of a fleet of 100 aircraft, five or 10 might fly, if that.”

Customs and other clearances were less of an obstacle than they might have been during the pandemic, Gulla said, as “the processes have become more automatic in recent years, and many of our large, long-standing customers are well regarded by the tax authorities. There have been some delays, as one or another official was out sick, but that’s part of the business.

“Those who operate in Brazil really need to understand the country," Gulla continued. "It’s a bureaucratic country, you have to know the rules, and they’re more complex than in other countries. Anyone who can operate in Brazil can operate in the whole world—working here is like an MBA in logistics.”

Logistics Condominium

One of AGS’s major projects, announced during the 2019 Heli-Expo, is the AGSValley logistics condominium in the São Paulo suburb of Barueri, which is being planned to include AGS’s headquarters and to cater specifically to companies in the rotary-wing market.

The pandemic didn’t cause AGS to step on the brakes. Rather, at the start of the pandemic, the firm’s employees migrated from its long-time headquarters near the downtown Campo de Marte airport to a home office situation. A year ago, when they began to return, it was to the company's new offices at AGSValley.

The first warehouse became operational less than a month ago. Two contracts with large businesses in the rotary-wing sector are underway, and Gulla hopes to announce one or both at Heli-Expo. The logistics condominium is “new in the world, and well received by the market. The idea is that by taking care of the condominium and logistics, tenants will be free to focus on their businesses.”