South America’s largest terminal operator cedes title to raise cash

South America’s largest terminal operator cedes title to raise cash

Tecon Imbituba has capacity to handle 450,000 TEU annually.

Santos Brasil’s plan to sell two terminals will cost it its title as South America’s largest container terminal operator, but it looks to gain money needed to invest in its namesake terminal and extend its concession 18 years.

The São Paulo-based terminal operator will sell its Tecon Imbituba and Tecon Vila do Conde (VDC) terminals, according to a report in the newspaper Valor Econômico that JOC.com confirmed with several sources. The company must invest 1 billion reais in its Santos terminal if it wants to add the 18 years to its current 25-year concession. The Santos terminal handled 1.4 million TEU, but lost its position as the top terminal in Latin America’s largest port to Brasil Terminal Portuario (BTP) after ending 2016 with a market share of 39.7 percent.

Valor named Mediterranean Shipping Co.'s terminal arm, Terminal Investment Limited, as the favorite to snap up Tecon Imbituba. Several sources told JOC.com that Marseille-based carrier CMA CGM might be interested in the VDC terminal in the northern state of Para, which is just 50 miles from the state capital of Belem. The terminal has the trans-Atlantic NBX and NEFGUI services to North Europe, as well as the MSC and MOL joint Amazon service and a Mercosur coastal service operated by Alianca Navegacão.

"TiL has no interest in the port of Imbituba and is not in any discussions in relation to the acquisition of any terminal shares," a MSC spokesman told JOC.com.

CMA CGM wasn't immediately available for comment.

Santos Brasil appears to have calculated that its interests in Santos are more important than these smaller terminals. The Tecon Santos terminal there had a market share of 36.7 percent with 660,000 TEU, just behind the 37 percent share of BTP and its 666,000 TEU. Embraport was the third-largest terminal operator in Santos with a share of 17.6 percent and 323,000 TEU.

Tecon Imbituba, located in the southern state of Santa Catarina, is a small container and breakbulk facility that handled 15,020 containers in the first half with no natural hinterland. It competes for cargo with the Itajai Port Complex and Porto Itapoa, which between them handled about 1.6 million TEU last year and is much closer to the three key production and demand areas of Florianopolis, Itajai/Camboriu, and Joinville.

Although it is a small terminal, traffic through Imbituba, which was up 34 percent from last year in the first half, should rise considerably through the rest of the year after it won a new Asia service that began in August. That service should help make up for the 50 percent year-over-year decline in traffic to 30,000 containers the port suffered after losing its last deep-sea service.

Tecon Imbituba has two post-Panamax ship-to-shore gantry cranes and covers an area of 207,000 square meters (2.2 million square feet), with 660 meters of quay, and annual capacity of 450,000 TEU.

Traffic at VDC, which has an annual capacity of 200,000 TEU, rose 18 percent in the first half to 34,562 containers. The relatively small terminal sits on 87,00 square meters and has a quay of 254 meters that supports two mobile harbor cranes. It has a natural depth of 13 meters and 200 plugs for refrigerated containers.

Robert Grantham, a director of Itajai based consultancy Solve Shipping, says that VDC would be a good acquisition for CMA CGM, which could use it as their North Brazil hub port.

“CMA CGM has been trying to purchase a container terminal in Brazil for a long, long time and Vila do Conde would make a lot of sense for them,” said Grantham.

“They tried once for Belem itself [just 42 nautical miles away from VDC] but that fell through. The French guys also went for Sepetiba but that did not work out either. There have also been strong rumors that they are interested in investing in Santos via Grupo Libra.”

Contact Rob Ward at rcward788@btinternet.com.