APM Terminals will build and operate a container terminal in the largest Brazilian port of Santos under a joint venture agreement with Terminal Investment Limited, the Danish company announced Wednesday.
The terminal-operating arm of A.P, Moller-Maersk said it agreed to acquire 50 percent of the shares in Brasil Terminal Portuario from TIL, which is building the new container terminal, subject to regulatory approval. APM Terminals and TIL will jointly manage the terminal.
A spokesman for APM Terminals said the company has not disclosed the size of its investment, but described it as "one of the larger port investments we have made."
By The Numbers: U.S. Container Trade With Brazil.
TIL, which operates terminals in 15 countries, is based in the UK. The company has a unique relationship with Mediterranean Shipping Co. under which MSC has agreed to channel its volume through terminals operated by TIL.
BTP is currently developing the facility, which is expected to start operations in 2012 and become fully operational by mid 2013. The new container facility will have a water depth of 49 feet and a capacity of 2.2 million 20-foot equivalent units when fully built out.
APMT expects MSC to become the terminal's anchor customer upon its completion. It said other container lines have expressed interest in the project.
The new terminal will have three deep water berths that will be able to handle the next generation of container ships with drafts of 39-45 feet. APMT did not disclose the estimated cost of the terminal project.
Santos, which currently has an annual capacity of 3 million TEUs, is being expanded to 9 million TEUs by 2014, according to a recent statement by Brazilian Ports Minister Pedro Brito.
"Brazil is one of the fastest-growing economies in the world and will become one of the five largest economies within a short time, said APMT CEO Kim Fejfer in a telephone interview.
"It has oil, minerals, a growing middle class, and growing trade," he said. "The government and President Lula are doing a great job in building the infrastructure to cater to future growth. They are pumping $250 billion into infrastructure, including ports, railroads and highways."
APM Terminals, which first invested in a container terminal in the Brazilian port of Itajai in 2004, has been negotiating the investment in the Santos terminal since December.
Fejfer said foreign direct investment in Brazil will jump by 50 percent this year and trade is growing rapidly, "so there is a need for new port capacity."
The Port of Santos serves the state of Sao Paulo and its hinterland. Roughly 50 percent of Brazil's GDP is generated in the areas served by the port of Santos and more than 25 percent of Brazil's trade passes through the port.
Both partners in the new Santos terminals operate other terminals in Brazil. APM Terminals already operates terminals in the Brazilian ports of Pecem and Itajai as well as inland services and depots. TIL operates the terminal of Portonave in Navegantes.
APM Terminals has one other terminal in South America, in Buenos Aires, Argentina, and operates inland activities in many places in South and Central America. Fejfer said APM Terminals would be interested in other investments in Latin America "if there are attractive opportunities."
He said APM Terminals placed a bid on Aug. 17 to upgrade and operate a terminal in the Port of Moin on the Atlantic coast of Costa Rica, which is a major port for refrigerated cargoes.
-- Contact Peter T. Leach at email@example.com.