SEPETIBA TECON SURVIVES

Jesualdo Silva, the head of the Association of Brazilian Ports and Terminals (ABTP), lambasted the municipalities of Itaguaí and Mangaratiba who tried to close down Sepetiba Tecon and neighbouring terminals over “environmental concerns” without due reason and blackening the name of Brazilian port terminals – both nationally and internationally.

The local authorities delivered an edict to close Sepetiba Tecon – sometimes touted as a future hub port for Brazil and the East Coast of South America – and its neighbouring terminals – a steel terminal run by CSN (which is also the owner of Sepetiba Tecon), and an iron ore facility operated by the multinational Vale.

The reason was, allegedly, that dust from the iron ore and coal operations was polluting the water. Local environmental agency, Inea, offered its backing. However, Sepetiba Tecon and others say it was just the authorities ‘flexing their political muscle’ and Inea did not concur with this edict.

CONCERTED EFFORTS TO BLOCK CLOSURE

However, a concerted and collective effort from ABTP and other agencies has been able to block the closure bid and force the two authorities to put the edict on the backburner. “ABTP repudiates the action of the municipalities of Itaguaí and Mangaratiba, which determined the banning of terminals in the region last week,” said an angry Silva. “We emphasise the arbitrary nature of the acts and reinforce the importance of port activities, which generate jobs, income and taxes and have been licensed by the Rio state agency.”

He continues: “Inea expresses its repudiation of the interdictions and this case presents a clear call for strong action by all public authorities responsible for national development. Brazil deserves a clear demonstration that contracts here are respected and economic freedom is protected at all costs from abuse and arbitrariness by anyone.”

Guilherme Vidal Rosa, Commercial Manager for Sepetiba Tecon, praised the way ABTP and others acted quickly to block the closure bid and, consequently, no interruptions to services occurred. “They [the municipality representatives] came to us and told us to close but we did not close,” Rosa told Port Strategy. “We continued operating and went to ABTP and other authorities. Thankfully they reacted quickly and confirmed we were right to remain open.”

CRAZY POLITICAL MOVE

One shipping consultant who has worked closely with Sepetiba Tecon over the past decade but is no longer connected to them, said that the “crazy, political move from the municipalities” sends a terrible signal to outside investors at a time when Brasilia is trying to persuade national and foreign companies to invest in the port sector.

“These are not the actions of a serious country,” said the consultant. “We have a due process here and it was not followed. I think some potential international investors might run a mile if this closure had been carried out.”

About five years ago, CSN owner, Benjamin Steinbruch, tried to sell Sepetiba Tecon as it was not his core business but several suitors, including PSA of Singapore and Advent International Corp of Boston, USA, plus Brazilian suitors Wilson, Sons and Santos Brasil SA, were rejected after making bids that seemed to meet the impresario’s asking price.

“It was very strange because Steinbruch wanted to sell, a buyer was found for him, (in the guise of PSA of Singapore), and then he changed his mind at the 11th hour,” the Sao Paulo based shipping consultant told Port Strategy. “In my view, Sepetiba Tecon is a diamond of a terminal, especially in terms of location, but one in need of some serious polishing as it has been neglected for several years now.”

On that front, Rosa said that Sepetiba Tecon will soon be opening a bid for two New Panamax ship-to-shore gantry cranes, to add to the six Super-Post-Panamax gantries it currently deploys.

Volumes have declined significantly since a peak of 247,000 containers (345,800 TEU) back in 2018, due to the departure of two key services from the Rio de Janeiro state port, located some 80 miles from downtown Rio de Janeiro, and the rival operations of Multi-Rio and ICTSI Rio Brasil 1, operated by ICTSI, of the Philippines.

Sepetiba Tecon handled 52,165 containers (73,031 TEU), during the first quarter of this year, up nearly 10 per cent over the same period of last year when it handled 47,700 containers in Q1. Rosa says he hopes that the terminal will maintain that growth for the whole year.

Brazil is expecting to see its GDP increase by around three per cent this year, having contracted only three per cent in 2020, owing to a number of economic stimulus measures from the government of Jair Bolsonaro, and relatively few periods of lockdown, owing to the President’s infamous downplaying of the killer virus.