Brazil's ports face trade demand pressures

Updated: 2011-09-13 07:51

(China Daily)

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 Brazil's ports face trade demand pressures

Santos Brasil takes receipt of two new cranes manufactured by China's ZPMC. Photos provided to China Daily

For one thing, the country needs to open up bottlenecks and gets ready for a future increase

Brazil's ports are spending more on infrastructure to increase trade with China, and there is a lot at stake both for the ports, their operators and the country.

Some observers have pointed out that, if international trade continues to grow at today's rate, the country's ports may not be able to handle the load in two years.

The country has 7,491 kilometers of coastline and its ports are the entry and exit point for more than 80 percent of the goods traded.

In 2010, they handled almost 800 million tons of freight. In 2015, the volume is expected to reach more than a billion tons, and a staggering 1.7 billion tons by 2022. So plans now call for increased investment, opening up of bottlenecks, and getting ready for an increase in trade.

Around $17 billion in spending is planned, with $14 billion of that coming from the private sector, and $3 billion from the state. This is expected to be completed by 2015.

This investment may seem to be heavily weighted toward the private sector but, when we consider that Brazil has 34 public maritime ports and 129 private ones, we can begin to appreciate the importance of private sector investment.

Deepwater

One thing the new investment will mean is that deepwater ports are being built as far north and as far inland as Manaus, in the state of Amazonas, and as far south as Espirito Santo in the far southeast. This reflects both the changing nature of Brazil's economy and its preparations for the future.

In addition, more than $700 million is being spent on dredging at a number of ports. This will allow access for larger ships, but according to industry experts an additional $700 million will still be needed in the near future.

One example of the forward thinking for the next shipping era can be found at the Port of Imbituba, in the state of Santa Catarina.

A private operator, Santos Brasil recently bought two Chinese cranes to serve ultra-large container ships.

The port's chief commercial officer, Mauro Salgado, explained that "Shipping now really needs to cater both to current needs and to those of the future."

Santos Brasil has already spent more than $1 billion on infrastructure and, with further capital injections, may be able to triple its capacity within seven years.

Already, in the first four months of this year, Brazil's trade with China has increased 45 percent, compared with the same last year period, meaning that any investment aimed at handling large vessels from China is a clear priority.

In all this infrastructure improvement, Brazil's goal is not simply to increase trade and competitiveness, but also to prepare for the two major global events it will be hosting in the next five years.

One of these is the 2014 World Cup, for which it is spending almost $500 million on passenger terminal expansions to prepare for the expected visitors.

With all this revitalization and the potential in profiting from cargo handling on the rise, there is no short supply of investors.

The port of Santos, which is the country's busiest by value of goods shipped, is looking for funds to help it cut the delays and change the terminal into a high-tech example of efficiency, to better serve bilateral trade with Asia.

Earlier this year the port announced that it had secured a $679-million loan, arranged by the International Finance Corporation (IFC), to build a new container terminal. This is the biggest investment IFC has ever made in port development and shows the confidence in Brazil and in the port's future.

Both Brazilian and Chinese companies have shown an eagerness to inject capital into these projects so they can transport goods more efficiently and more cost-effectively.

One such Brazilian company is Asia Shipping, which has specialized in freight forwarding. This young but highly successful company is already a leading trader between Asia and South America, with 20 offices worldwide, seven of them in China.

Its commercial director, Alexandre Pimenta, has commented, "Ever since we began operations, our main market segment has been trade between China and Brazil."

This forward-looking company is building on its reputation as a leading agent for cargo handling in Asia-Brazil trade and has invested in high-tech solutions to improve logistics and customer services.

China Daily

 Brazil's ports face trade demand pressures

New "Portainers"- Santos Brasil's latest investment.

(China Daily 09/13/2011 page29)