Guilherme Cauduro is Executive Director for the Bureau Veritas’ AFC Division in Brazil. AFC stands for Agriculture, Food and Commodities and is one of the company’s five divisions in Brazil.
Good morning, Guilherme, and welcome to Commodity Conversations. Thank you for taking part. First, could you tell me a little bit about yourself?
Good morning, Jonathan. I’m an Agronomist. After I graduated with my master’s degree from the Federal University of Rio Grande do Sul, I started to work for an agricultural research firm. I stayed with them for two years before realising it was not for me.
I had a friend working for Schutter Group, a Dutch inspection company headquartered in Rotterdam. His work sounded much more interesting than what I had been doing. Schutter offered me a job, and I started as an inspection and certification manager at Rio Grande Port. In March 2007, Bureau Veritas acquired Schutter, and I stayed with them. So, I’ve worked for the same company for 16 years.
What is the role of a commodity inspector?
Our role is to inspect the commodities to ensure that they meet the description of the goods in the agreement signed between buyers and sellers and to meet international commodity regulations and rules.
Could you tell me a little about Bureau Veritas?
Bureau Veritas is a French company specialised in testing, inspection and certification founded in Belgium in 1828. Five years later, the headquarters moved to Paris, where it is now publicly quoted on the Euronext exchange. Bureau Veritas has 82,000 employees in 140 countries with a network of over 1,600 offices and laboratories. It operates in various sectors, including building and infrastructure, agri-food, and commodities, marine and offshore, industry, certification, and consumer products.
I understand you did an agricultural degree. Does it help you in what you’re doing now?
Yes, because we have some upstream businesses dealing with farmers and cooperatives. Being an agronomist helps me understand the language and the people.
Do you come from an agricultural background?
My father was an Agronomy professor at the Federal University of Rio Grande do Sul. He also grew soybeans for about ten years. As a teenager, I used it to travel with him to the farm. I saw that it was a good business, and it suited me.
Did you grow up on the farm?
No, I grew up in the city, but my father spent a lot of his time on the farm when I was at university, and I accompanied him when I could. Many of my university friends were from farming families, and I spent time on their farms. I don’t enjoy the noise of the big city. I prefer the quiet of a farm.
You mentioned the upstream work that you do. Is that mainly certification work on sustainability?
Sustainability is part of our corporate culture; all our solutions consider its pillars. We do work with sustainable certifications, but it’s not the primary demand in our division.
We have a massive operation inland. When trading houses originate soybeans or corn from farmers, they send the trucks to the farms to load and transport the commodities to the ports or the crushing plant. They hire our services to inspect the trucks when they load to ensure the quality is according to the contract between the farmer and the trading house.
Another business we do upstream is credit monitoring. The trading houses, banks, and chemical companies prefinance the farmers and cooperatives who need money to plant and harvest. We are on the farms to check how the crops are growing and to see if the harvest will be good enough to pay back the money to the financier.
Bureau Veritas is also prominent in cotton, particularly in Mato Grosso State, where we test about half of Brazil´s cotton production. We have five laboratories in Brazil that test cotton fibre quality.
We are very much involved in farm transhipment. When the trading houses tranship cargoes from trucks to rail cars or trucks to barges, we are in the transhipment points collecting samples from trucks, from the barge, and from the rail cars to see if the quality is OK.
We also work for seed companies, protecting their royalties from GM crops. In Brazil, seed companies can charge royalties against GM crops for ten years, and we have teams that inspect the crops to ensure farmers pay royalties.
Do you weigh the cargo during transhipment?
Yes, absolutely. We check the scales to see if everything is correct and do a draft survey on barges to verify the volume.
Within Brazil, how much of your business is upstream, and how much is at the port?
Nowadays, our upstream accounts for around 60 per cent of our income – that’s for the agriculture division.
Are trade houses now originating more volumes directly from the farm?
Yes, especially in the central part of Brazil. Large farms in Mato Grosso produce around 30-35 per cent of Brazil’s soybeans. The trading houses buy about half of the crop directly from the farms.
And the trade houses advance the money to the farmers and then get paid back with the grain and oilseeds?
They don’t pay 100 per cent in advance, only part of it. They buy the rest in the spot market.
How many people do you have in your division?
In the harvest season, we have around 3,000 – 3,200 inspectors working in our division in Brazil. In the mid-season, we have 1,500-1,800 people.
What is it like being a surveyor?
We have a saying in the business that we must “kill a lion a day.”
We have a lot of responsibilities and pressures from the clients. The costs can quickly mount if we fail to do our job correctly, whether quality inspection or crop surveying. It can be a considerable amount of money for a trading house. If we make a mistake in our analysis, we have problems with the farmers because they have guaranteed a certain quality.
Testing, inspection, and certification are all about trust. We must maintain an excellent relationship with our clients. They must trust us because we protect the quality and the quantity of the goods they are trading.
We operate 24/7. In our business, we are always available to perform operations or to attend to a client; readiness is one of the critical factors of Bureau Veritas’ success in the agri market in Brazil.
What are your biggest challenges?
Our business is people. We train our people and help them develop their skills. We are present in fifteen ports in Brazil, and our clients expect – and need – the same standard of service in each port. So, our biggest challenge is to ensure our inspectors and local managers provide the same high standard of service to the client regardless of where they are based. Our business assets are not computers or cell phones; they are people.
Every day is a new story, and every crop season is different. We never have a crop season that’s the same as the other. As an inspector, you can expect something different every day.
We must guard against corruption. People sometimes try to corrupt our people by asking them to issue fake certificates – to lie about the quality of the goods. One of the absolutes of Bureau Veritas is Ethics, and we invest a lot in training our people about the fundamentals of our core business, principles, the relevance of our role, code of conduct and the absolute values of the company, among others.
So, your biggest challenge is ensuring your people are well-trained and ethical.
We must also keep them motivated. Working 24/7 means working weekends. People usually want to relax on weekends with their families. My job is to keep our teams motivated to supply the same standard of service to all our clients, to guard against corruption and maintain integrity throughout our business. Integrity is the big thing. We continually train our inspectors, showing them how critical and sensitive our job is and how much value we offer our clients when performing our service according to national and international standards.
What initially attracted you to become an inspector?
As I mentioned, I heard about the business through a university friend. I knew nothing about the job, but it sounded way more exciting and interesting than what I was doing then.
The commercial side of the business attracted me, and the company soon promoted me to commercial director. I started to make overseas business trips to visit clients in Asia, Europe, Africa, and North America. It was an opportunity to meet people, to get to know different cultures, and to make friends in the business.
But when you ask me why I started, it was an accident. A happy one, I must say.
Do you travel much in your present position, internationally and domestically?
Before the pandemic, I did seven or eight overseas business trips yearly as Commercial Director.
Why so many?
You may have an excellent relationship with your clients in Brazil, but you must also develop relationships with end buyers – the final receivers of the cargo.
When a trade house sells cargo to China or Vietnam, or wherever, it is often the final receiver who chooses the inspection company at load. Remember, weight and quality are final at load. A trading house may prefer a different inspection company but will not say “no” to a client. My job as commercial director was to persuade the end-buyers to choose us rather than our competition.
In December 2021, I started in this new position as Executive Director. I still travel overseas, but a maximum of two trips a year. There is much to do here in Brazil, and I cannot stay away too long. That will change over time. I’m training my colleagues and passing all my client relationships on to them.
Is it usual for a buyer to appoint a surveying company and a seller to nominate a different company? And what happens in that case if they disagree?
Yes, it is widespread. The buyer and the seller may want to appoint their own supervisory company.
If there is a discrepancy or a disagreement, the seller, the buyer, and the inspection companies talk together to come to an agreement. They may agree to remove, for example, part of the cargo that may be off-spec – or the seller may compensate the buyer financially.
I am surprised that you had no training when you started with Schutter. What training does Bureau Veritas give to your trainee inspectors?
I learned on the job when I started in the business in 2007. I stayed in the port for 10-12 hours per day to understand how it all worked – the trucks, the terminals, and the conveyor belt loaders. I also learned how to do a draft survey.
Most of the issues occur at night and at weekends. I initially spent many nights and weekends at the port. I would often only get home at three or four in the morning. It was tough on my wife, but she supported me.
It is entirely different now with Bureau Veritas. We spend considerable time and money on training, particularly regarding safety. The safety of our employees is our number one priority – and our number one risk.
You mentioned issues often occur at night or the weekends. Why is that?
First, people sometimes try and load off-specification quality goods at night or on the weekend when they think our inspectors are less focused. If a seller has a quality issue with a portion of the cargo, they may try and load that portion at night or at the weekend.
Second, more accidents occur at night, especially in winter in southern Brazil. Temperatures sometimes fall below zero degrees, and surfaces can become dangerous.
There have been issues with traffickers smuggling cocaine in commodity shipments, particularly in containers. Is that a big problem?
It is a big problem. The traffickers have a lot of money and a lot of power. It is not only in containers. Nowadays, the traffickers have divers in the load ports, attaching boxes with cocaine onto a vessel’s hull, and then divers removing these boxes from the ships at the destination. Rotterdam Port Authority employs divers to randomly check arriving vessels to see if they can find these boxes.
It is a problem for the entire Brazilian agricultural sector. Did you know that the GDP of Brazil’s agricultural industry is higher than Argentina’s total GDP? Therefore, the Authorities in Brazil should make all efforts to try to avoid such kind of situations.
There was once an issue with sand in sugar shipments from Santos. Was it a result of corruption?
Not really. Sand and sugar look almost identical. So, many years ago, some gangs replaced sugar with sand on the trucks going from the mills to the ports. Fortunately, our people are trained to identify visually or do quick tests to see if there is fraud in the cargo. It is one of the reasons why Bureau Veritas is continuously investing in our teams’ technical development and qualification.
Not many people outside the business understand commodity traders don’t trade commodities; they trade documents. What shipping documents do you produce and handle?
We are not involved in trading. All we do is certify the quality and weight of the traded goods.
What about the phytosanitary certificates*?
Good question. In Brazil, the Ministry of Agriculture is responsible for issuing the phytosanitary certificate for corn, rice, and wheat. Inspection companies issue a document called IN 15 for soybeans. The Ministry of Agriculture will use this document to issue the phytosanitary certificate to the shipper of the cargo.
How has technology changed the business over the past few years? And how do you imagine it changing in the future?
It’s incredible how technology has changed our business, especially in digitalisation. Only five or six years ago, our inspectors in the ports would note their observations on paper about weight and quality and then send them to our local office, where a guy would manually enter the information onto an Excel sheet and then send it by email to the client. Our port inspectors enter the weight and quality information directly into their tablets or smartphones, and the system sends it automatically to our clients. OK, it’s not still 100% digitalised, but I would say it’s 85% digitalised in Brazil.
We now have a machine that measures the moisture content of a commodity underload and sends the results through our system, which goes directly to the client. We don’t need people typing in the moisture anymore. It is a significant change.
The conveyor belts in Brazil load about 3,000 tonnes per hour. It’s fast, and you don’t have time to waste. When it comes, the continual automated quality screening will be more efficient and accurate.
To what extent can you take out the human element? Can machines replace inspectors?
We already have some grading machines in Brazil that screen for damaged, mouldy green beans and foreign matter and impurities. We must calibrate these machines correctly and manually double-check they provide accurate results for the sample. This technology will help our inspectors to work faster and more efficiently.
What do you like and dislike about your job?
I like the job dynamic, meeting people, connecting with them, getting to know their cultures, and doing business in their countries. I like the speed of the business – the adrenaline. I like that every day is different. You don’t sit in front of your computer doing the same thing every day.
I don’t like my job when people try to bribe our inspectors to issue fraudulent certificates. Corruption is a problem in Brazil, as it is throughout South America.
So, how does somebody reading this become a surveyor?
They just need to apply through our website or local offices. We are always open to newcomers, and we like to train people.
Are there any professional organisations for vessel inspection and others?
Yes. In Brazil, we have an association of inspection companies where we mainly discuss technical stuff about new regulations. We ensure everyone has the information to prepare for new rules. Internationally, we are members of all the leading industry associations, such as GAFTA and FOSFA.
What advice would you give someone who thinks this might be an exciting career for them?
I would tell them it’s a dynamic business. We don’t do the same thing every day.
I would tell them that they must be aware that we are a 24/7 business and that they must always be available to receive a call from a client with a question or from a team member looking for help in an operation. It’s not a regular business from Monday to Friday, from nine to five. It’s not; it’s different.
You have a stressful responsible task managing all these people and dealing with all these issues. How do you cope with that stress, and how do you manage your work-life balance?
My family supports me. I couldn’t do this job if my family didn’t help me – my wife and two boys. I have a very supportive wife. I travel a lot, and most of the responsibility is with her because she is with the kids and doing the everyday stuff.
One of my boys is ten, and the other one is fourteen. They like soccer. I take them to soccer games and play soccer with them as often as possible. I also take them bike riding.
Sport helps. I go to the gym every morning for an hour and don’t take my cell phone. I need the time with no cell phone, WhatsApp messages, or calls. It allows me to clear my brain and prepare for the day.
Is there anything you’d like to add?
I would like to emphasise that a surveyor’s role is essential to the agri-commodity supply chain. We, as surveyors, are responsible for checking the weight and quality of the goods traded between seller and buyer, and we are pleased to see that the clients understand how valuable our job is.
Thank you, Guilherme, for your time and input.
- A phytosanitary certificate verifies that agricultural products have been inspected and are pest and disease free (“phyto” means “plant”, and “sanitary” means “clean” or free from pests and diseases).
© Commodity Conversations® 2023
This is part of the series Commodity Professionals – The People Behind the Trade.