The multi-purpose Santos is the largest port in Latin America. Credit: Brastock/ Shutterstock
Brazil’s Jair Bolsonaro government is seeking investment in its port infrastructure and is undergoing a privatisation programme across four of its ports to raise these funds. It’s part of a broader infrastructure project to boost the economy that lost traction during the pandemic but picked up pace again last year.
Brazil is the world’s biggest exporter of soya beans and sugar. It exported 86.1 million tonnes of soybeans in 2021, a record for the country reports S&P Global, with China its largest market. Approximately 22 million tonnes of sugar are exported per year, most of it unrefined, to worldwide markets.
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Cargo ship movements around South America in 2020, source: MarineTraffic Density Maps
It is also one of the world’s largest exporters of iron ore and a considerable player in the crude oil industry.
However, investment in infrastructure is required to support its export volumes. According to Economic Intelligence, “Brazil has long had a huge gap in adequate infrastructure provision, partly owing to fiscal constraints. According to the Global Infrastructure Hub, a data service under the G20, Brazil spends less than 1% of GDP on transport infrastructure but needs to spend almost three times that to fulfill its needs. The country ranks 68th out of 82 countries for infrastructure quality in our Business Environment Rankings and suffers from numerous transport bottlenecks.”
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The east coast South American country of Brazil wants to privatise certain ports
The four ports currently mooted for privatisation are Santos, São Sebastião, Itajaí and the port authority of Espirito Santo, (CODESA), which manages the smaller ports of Vitória, Capuaba, Praia Mole and Barra do Riacho.
According to the Brazilian government the latter will go to auction this March. “Investment funds and port operators present in the country and international port authorities,such as those operating in Europe and Asia, have shown interest. Private investments of R$334.8 million (USD69 million) are expected, in addition to operating expenses estimated at more than R$1 billion,” said its website.
A public hearing for state-run Santos started earlier this month [February] held by the national water transport agency, Antaq.
According to Merco Press, the Brazilian government is offering a 35-year (extendable for a further five years) contract with a price tag of around USD 3.5 billion to operate Santos and the auction is planned for Q4 this year.
Situated around 500 km south of Rio de Janeiro, the nation’s capital, Santos is the largest port in Brazil and Latin America, and according to the same news source handles about 27% of the country’s annual cargo throughput of 135 million tons and 4.1 million teus.
It has 32 terminals processing all cargo types including dry and liquid bulk, ro-ro, containers, general and project cargo. According to the port, it handles cargoes from 600 ports across 125 countries around the world.
It’s diverse cargo handling ability is reflected in MarineTraffic data. Data for Santos reveal that there were 10,311 vessel arrivals or departures in 2021, representing around 5000 vessels in total.
Of this figure, dry bulk carriers and containerships frequented the port most often with around 140 to 160 arrivals each month of both vessel types. Around 70 wet bulk vessels also visited the port each month representing Brazil’s oil industry, along with approximately 20 ro-ro and dry breakbulk ships.
The ministry is readying Santos as an attractive investment proposition and according to Seatrade Maritime News is expanding the port’s boundaries to make room for more developments. The current port site of 7.8 km2, is almost at 95% capacity, Seatrade reported earlier this month [1 February].
Meanwhile, Antaq also held a public hearing for the port of São Sebastião - situated between Rio de Janeiro and Santos - earlier this month. Splash 24/7 reports that: “The contract term for the concession will be 25 years, with a proposed minimum fee of R$33.3m (USD65.6 million) and estimated required investments of R$3.3m (USD6.5 million).”
MarineTraffic ship tracking data reveals that São Sebastião is primarily a wet bulk port, with crude oil tankers making up 24% of its port calls, oil chemical tankers, 19%, and product carriers, 10%. Port arrivals and departures combined in 2021 total 1,535 representing nearly 800 vessel visits in total. Wet bulk vessels dominate vessel calls, with between 50-70 vessels calling per month. The port also received two to three dry breakbulk vessel calls a month.
Doubts are circulating around whether the port privatisation programme will move forward this year. Brazil’s next general election takes place in October and many commentators believe that a change in government will dictate the programme’s success. But Natália Marcassa, development, planning and partnerships secretary at Brazil’s Ministry of Infrastructure is optimistic. She told BNamericas: "We spoke with more than 40 stakeholders potentially interested in the port of Santos. We are confident this auction will take place in the fourth quarter of this year".
Brazil is no stranger to privatisation at its ports. The northern port of Madeira, for example, is one of the largest iron ore ports in the country and owned and operated by mining major Vale. According to Marine Insight, it is one of only a few ports that can receive ultra-large Valemax ships.
A number of international terminal operators also have concessions across some of the country’s main ports. One example at Santos, is DP World that operates a multipurpose terminal with container and cellulose pulp handling making up the core of its business.
According to DP World, it is one of Brazil’s largest private container terminals, has an annual throughput capacity of 1.2 million teu and 3.5 tons of pulp.
Similarly, APM Terminals operates five facilities across Brazil, including at its second biggest port - Itajai. The Santa Catarina state facility forms part of the country’s privatisation plan and container ships account for 15% of vessel movements.
Fishing vessels call most frequently and represent 69% of port traffic, reveals MarineTraffic. It also has an established frozen products sector.
Further analysis of MarineTraffic data reveals that there 830 vessel arrivals and departures combined (not including fishing vessels) representing around 400 vessel port calls.
Around 27 containerships called at the port each month last year, with around three to four dry breakbulk and a similar number of bulk liquid calls.
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South America’s container ship movements in 2020
With 95% of Brazil’s exports moving through its ports, its waterborne infrastructure is essential to its economy. Whilst some privatisation opportunities in past years have faced political hurdles and been left unfilled, there is confidence the current phase will result in international investment for increased efficiency and expansion of the nation’s port gateways.
