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Print articleShipbuilding revival in South America
The fast-developing oil and biofuel industries are driving the renewal of South America’s shipbuilding industry, but ports need to keep apace
Brazil
 Brazil is scaling up ethanol production and export |
The shipping industry as a whole – and the port sector in particular – has been slowly declining in Brazil over the last decade. Ports have been suffering from major congestion difficulties, shipyards gradually declining, and the mining and logistics company CVRD sold off its fleet and closed down its shipping subsidiary, Docenave, after a failed attempt at diversification. But now, things look set for change. To say that shipping is at the top of the political agenda would be an overstatement, but it is certainly drawing more attention, at all levels, than has been the case for a long time.
Brazil’s president, Lula da Silva, elected for a second term at the end of October 2006, has created a new cabinet post with responsibility for reanimating the country’s ports industry. The new minister for ports, Pedro Bitro, is expected to focus on issues including congestion, privatisation and port management. Announcing the creation of the post, da Silva acknowledged that Bitro “needs to solve a chronic problem” in a sector that has been strangled by patronage and apathy. The new department has a ring-fenced budget of some $1.4 billion to revitalise Brazilian ports, but the challenge will be ensuring that it is effectively spent.
Brazil’s largest port, Santos, which had a throughput of some 76 million tonnes in 2006, is potentially facing collapse as early as the end of this year if measures to combat congestion are not taken, according to Saurnino Sergio da Silva, head of logistics at FIESP. However, Jose Marques Almeida, editor of the Brazilian PortFolk magazine and a former engineer at the port of Santos, reckons that there is some cause for optimism. According to him, shortterm questions have been resolved relatively successfully, but he believes there is a need to improve the maintenance of deep-water access to the ports, land-side access and port safety: “The measures taken by the government have been less than what is required for trade with resulting limitations put on our ports,” he says. “The new Special Office for Ports seems to have adequate ideas and focus, but only the concretisation of actions and measures can guarantee better efficiency for Brazilian ports.”
Likely drivers for future port business include strong links with Saudi Arabia, and heavy investment by Brazil in its fledgling biofuel industry. Brazil has produced ethanol for its own use for several years, and with the growing international interest in biofuels, it is now scaling up for export production. It is predicted Brazil could export eight million cu m of biofuel per annum by 2012, and possibly as much as 18 million cu m by 2015. Expansion of ethanolhandling facilities is already underway. Last year, Brazilian sugar company COSAN announced the development of a specialist ethanol terminal in the port of Santos, to be built as a joint venture with participation from Cargill.
There will be a corresponding need for increased tonnage. On the shipbuilding side, the oil industry is taking the lead. Transpetro, the transport subsidiary of state oil firm Petrobras, is in the process of upgrading its fleet, with intentions to place orders for some 40 or 50 double-hulled tankers. According to company announcements, all of these orders will be placed with Brazilian yards. Orders for the first tankers were placed with the Maua Juron yard. There was initially some doubt as to whether those orders would go through, as the yard did not have enough funds to complete the project, but these have now been made available. In addition, there are a number of offshore units on order from Brazilian yards – Rebras has six tug units on order to be built in Brazilian shipyards.
CVRD is not sharing directly in the revival of the Brazilian shipping industry. Despite the recent spike in bulker charter rates, it prefers to rely on chartering, and regularly takes ships on the spot market, rather than on long-term charter, according to a presentation from ferrous minerals executive director Jose Carlos Martin, speaking at a meeting of the Melbourne Mining Club in London in June. However, the company is actively encouraging the construction of ultralarge ore carriers: “We are not trying to recreate Docenave, we are trying to develop a business to support the iron ore,” said Martin. “We are asking owners to build the ships and giving long-term contracts.” Ships ordered under this model so far include four 300,000 dwt chinamax vessels, three capesizes, one VLOC and one 270,000 dwt vessel.
Colombia
Like Brazil, Colombia is a nation where ports have become a victim of their own success. Of Colombia’s four major ports, the most important is Buenaventura. It is estimated that by 2015, these four ports will handle some 100 million tonnes per annum, of which 50 million will pass through Buenaventura. A number of projects are under way that will boost both capacity and throughput. ICTSI announced in July that it is to invest $180 million in developing a new container terminal with an annual capacity of some 700,000 te u. In addition, Cartagena’s refinery is due for a major upgrade that will increase production output.
Venezuela
 Venezuela is building up its tanker fleet |
Oil is also driving growth in Venezuela, where the port at the country’s major refinery is being reconfigured to accommodate larger tankers, in line with ambitions to double total oil output to 5.8 million barrels per day by 2012. PDV Marina, the transport arm of state oil company PDVSA, has an ambitious ordering programme that aims to increase fleet capacity to a point where it can transport some 45 per cent of Venezuela’s oil output on its own vessels – the existing fleet of 23 tankers currently transports about 12 per cent of oil output. To this end, PDVSA is looking to acquire 42 vessels by 2012, as newbuildings rather than on the secondhand market. Orders have been placed with a number of yards around the world, the largest of which is a $1.3 billion deal for 18 tankers placed with China State Shipbuilding Corp. and China Shipbuilding Industry Corp.
Firm orders have been placed for two 45,000 dwt product tankers on order in Argentina, with options for a further two if they are completed on time. In December 2006, contracts for four 105,000 dwt tankers were placed with Iranian yard SADRA. Another 10 tankers have been ordered from two Brazilian yards, Eisa and Maura Jurong.
However, Venezuela is also keen to increase its own shipbuilding capacity, and the contracts with China, Brazil and Iran all include clauses on the exchange of shipbuilding technology. Projects under consideration include reconditioning an existing shipyard in Paraguana, and constructing a new shipyard in the east of the country, according to a statement from Asdrubal Chavez, head of PDV Marina.
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