Brazil to have new naval industry hub

The city of Rio Grande, in the southernmost Brazilian state of Rio Grande do Sul, is going to receive two shipyards, Aker-Promar and Rio Grande, which are going to produce large scale tankers. The latter, established by three Brazilian businessmen, is negotiating foreign investment. The works should begin between February and March next year, and the first vessels should be delivered in two years. Both projects may create 5,000 direct jobs and 20,000 indirect.

Mark Ament

Isaura Daniel

São Paulo РThe city of Rio Grande, in the southernmost Brazilian state of Rio Grande do Sul, is going to become a tanker production hub in little over a year. The city will receive two large scale shipyards, the Norwegian Aker-Promar, which already has a unit in the city of Niterói, in the southeastern Brazilian state of Rio de Janeiro, and "Rio Grande", a project by three Brazilian businessmen, one of whom is the owner of shipyard Transnave in Rio de Janeiro.

Both groups should begin construction of their shipyards between February and March next year. The partners of shipyard Rio Grande are also negotiating foreign investment in the business. The shipyard implantation manager, Roberto Dieckmann, does not reveal the names of those involved, but he stated that they are two international companies that are not yet present in Brazil. The Brazilian partners are Maurício Carvalho, Daniel Birmann and Raimundo Pessoa.

The shipyards will be built in the Rio Grande Port area, so as to supply the oil industry demand. Aker-Promar is going to produce tankers between 250 and 280 metres in length, the company is also gong to produce movable platforms for oil exploration. The company plans to produce four vessels a year. The first delivery should take place in 2006. Investment, however, is still awaiting Brazilian oil giant Petrobras market confirmation of an order for 22 vessels, which should take place in the first weeks of November.

The Rio Grande shipyard intends to produce three vessels a year, with an average length of 270 metres. According to Dieckmann, the shipyards in Rio de Janeiro, where the Brazilian naval industry is located, are not producing tankers, a fact that could make the city from Rio Grande do Sul into the only hub in the area.

Aker-Promar itself only produces vessels up to one hundred metres in length at its unit in Niterói. The company plans to invest a total of US$ 150 million in the new enterprise, to occupy an area of 300,000 square metres.

Rio Grande, in turn, plans to invest around US$ 31.4 million in the construction of the site alone, in an area of 560,000 square metres, and will start its first deliveries at the beginning of 2008, according to Dieckmann. Both companies are going to ask for loans from the Brazilian Development Bank (BNDES).

Foreign market

The enterprises should supply the domestic market, especially Transpetro, the Petrobras transport operational branch, but they do not discard vessel export. Aker, in turn, already sells its vessels on the foreign market. The unit in Rio de Janeiro, which has 51% Norwegian capital, produces an average of four vessels a year. The foreign trade volume varies according to demand.

In the remaining countries, however, sales are going to find competition from Asian producers, who have a large part of the world naval market. "I believe that in five or six years, we will already be able to dispute the foreign market," stated Roberto Dieckmann.

Between 10 and 15 other companies should install themselves in the city in Rio Grande do Sul so as to work as suppliers to the shipyards, according to the superintendent director of Rio Grande port, Vidal √Āureo Mendon√ßa. Although some vessel components, like engines and pumps, are imported, other products, like steel and paint, are normally purchased on the domestic market.

The arrival of the shipyards will also benefit the port. "(The enterprises) are going to qualify the port technically, as vessels will be able to stop here so as to do maintenance. Between Buenos Aires (Argentina) and Rio de Janeiro there are currently no shipyards capable of servicing the vessels, and that will make a difference," stated Mendonça. The Rio Grande shipyard is also going to work in vessel repairs.

Rio Grande is the second port with the greatest volume of containers in Brazil, and is the main export hub of agricultural machinery. In the first eight months of this year, cargo movement in the port totalled 15.2 million tonnes, showing 3% growth over the same period in 2003. Among the main products shipped at the port are agricultural products, ground soy and soy oil, tractors and harvesters, and vehicles.

In the whole of last year, the port moved 21.5 million tonnes, a historic record which, according to Mendonça, should be exceeded in 2004. The port already moves products in the oil industry, due to its closeness to refinery and distributor Ipiranga and to a Petrobras distributor in the city. Starting in 2005, however, the volume of oil shipped should rise as Petrobras plans to start exploration of Pelotas basin, on the southern coast of Rio Grande do Sul.

Both shipyards will be built in an area provided by the port, which belongs to the federal government, but is administered by the state government.

Economic impact

Arrival of the shipyards should significantly change the routine of the city of Rio Grande. It is expected that a total of 5,000 direct jobs and 20,000 indirect jobs should be generated with the installation of both naval industries. For an economically active population of 55,000 people, 31,000 of them already officially employed, the shipyards will have a significant impact in the number of positions available. The city has a population of 193,000 people.

The shipyards should hire from engineers to welders, electricians, and technicians in electronics, and should attract labour from the whole state. According to the municipal secretary of Coordination and Planning, Neverson Ribeiro Moraes, the city is already in contact with technical institutes to train workers, in partnership with the Federal University of Rio Grande (Furg). "We currently do not have a labour hub ready to receive the companies," he said.

Large Brazilian retail chains have also started showing interest in opening branches in the city after the announcement of the project, according to Moraes. The city has a Gross Domestic Product (GDP) of US$ 873.2 million and is among the ten main economies in Rio Grande do Sul. Economic activity is mainly connected to the service sector, due to the port, and to industry and fishing.

Apart from the two large oil companies, Rio Grande also has four fertilizer factories, two soy crushers, a grain terminal, a capacity for 12 million tonnes (in the port) and two universities, Furg, which is public, and Atl√Ęntico Sul, which is private. For the time being, the city possesses just one small shipyard that executes vessel maintenance.

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