Ports of Paraná – the Ports of Brazilian Agribusiness

Brazilian exports are expected to grow 13.7% in 2021 and the country's foreign sales should become even more dependent on products such as soy, oil and iron ore. With higher prices, these three products will increase their share to a record of 40.2% of Brazilian exports, according to the Brazilian Foreign Trade Association (AEB)[1].

In 2021, for the seventh consecutive year, soy will continue to be Brazil's leading export product. Even in view of the expectation of a record harvest in Brazil, the largest global producer and exporter of the commodity, average prices are expected to increase 25%, at a time when China (the main importer) maintains firm demand.

Brazil has a responsibility to continue feeding the world and the state of Paraná has a responsibility not only to produce, but to handle and ship these agricultural supplies. In view of the above, the administration of the Ports of Paraná seems to be with good expectations for 2021 and remains with a long-term vision, investing in logistics and infrastructure improvements – supported by the State Government and in line with the current policy of the Ministry of Infrastructure, making the Ports of Paraná more and more competitive, willing to become a logistics hub for South America.

Cargo Handling – Panorama and Prospects

The Ports of Paraná, a port complex consisting of the ports of Paranaguá and Antonina, closed the year with fifteen broken records despite the health crisis, handling over 57 million tons of cargo in 2020[2] - an increase of 8% in relation to the previous record, registered in 2019.

The state of Paraná had a spectacular soybean harvest and the price of the product in the international market, as well as the strong demand from China favored exports. In addition, sugar, frozen chicken[3] and vegetable oil exports were very prominent. The consolidated data shows that about 65% of all cargo handled in 2020 was of solid bulk – highlighting soybeans (about 40% of the total exported) and fertilizers (almost 47% of the total imported[4]), which was enough to maintain the Ports of Paraná between the main handlers of the products in Brazil.

* Translated and adapted by us.

In 2021, the Port of Paranaguá expects 11% increase in grain exports in the first quarter. With a new terminal connected to the west of the pier and a significant increase in draft (rising to 12.5 meters), the port operators expect to ship around six million tons of solid bulk already in the first quarter – between soy, bran, corn and sugar.

Following the same path, the Port of Antonina, which is currently undergoing significant expansion works, expects 50% increase in cargo handling in 2021, especially with non-GM soybean meal, fertilizers and new products such as wood, organic grains and project cargoes.

Infrastructure - Panorama and Prospects

The administration of the Ports of Paraná is aware that the favorable agribusiness scenario, by itself, will not help the Ports of Paraná to achieve their objectives, but investments in improvements in the maritime structure will also be necessary.

The Ports of Paraná are just 200 kilometers from the Santa Catarina ports and 400 kilometers from Santos, so if operating in Paraná is not profitable, companies will migrate to other ports. Therefore, constant investments willing to increase cargo handling capacity are necessary to ensure that companies operating in Paraná gain in quality and price.

Bids and Public Auctions – New Port Areas

In August 2019, the state of Paraná became the first (and is still the only) Brazilian state to obtain full autonomy to manage and administrate port area exploration contracts[5]. As a consequence, in December 2020, the Ports of Paraná became the very first Organized Ports to grant, through public auction, a port terminal at its own discretion[6].

The PAR12 terminal has 74,100 square meters and static capacity for 4,000 vehicles, making the estimated annual demand in Paranaguá go from 287,000 to 461,000 vehicles between 2021 and 2045.

The administration of the Ports of Paraná confirmed that there are five other bids/auctions in the coming years, comprising three solid bulk terminals, with the expectation of opening Public Consultations in the first half of 2021, and a liquid terminal and a general cargo terminal, of which both auctions will take place in the first half of 2021.

** Location of the PAR12 terminal.

Expansion of Operational Draft - TCP

In 2020, the Paranaguá Container Terminal (TCP) has obtained approval from the Brazilian Navy to expand its maximum operational draft from 11.8 meters to 12.1 meters[7] - dredging was carried out between 2017 and 2018.

The draft expansion represents gains for container vessels with more than 345 meters of LOA, which will have a more flexible berthing window. Moreover, the 30 centimeters increase represent more 240 TEUs per Vessel, more than 140,000 TEUs per year.

Removal of the ‘Pedra da Palangana’/Palangana Rock

‘Pedra da Palangana’ is a mass of submerged rocks located in the maneuvering area of the main access channel to the Port of Paranaguá, limiting Vessel traffic at the entrance to the bay.

Counting from January/2021, it is expected that the project to remove the mass of rocks will be completed in three months (around April) and the execution - which includes the mobilization of equipment, drilling, dismantling and removal of rocks - should take other eight months, counting from the completion and approval of the project[8].

With the removal of the rocks added to the continuous investments made in permanent dredging, the Port of Paranaguá will have an unprecedented condition to receive larger Vessels, as well as allowing the deepening of the access channel up to 14.60 meters, ensuring safer navigation and preventing accidents.

Pier Expansion – Berth 201

In September 2020, the expansion works for berth 201 were completed. The new construction expanded the pier by 100 meters, which now has 140% greater cargo handling capacity.

The berth 201 received a new electromechanical structure, including two new ship loaders with capacity of 2,000 tons/hour. As a result, the annual cargo handling capacity will rise from 2 million tons of grains to 6 million tons of grains.[9]

This modernization, with new shiploaders and the expansion of the pier, allowed the existence of more export terminals, which will be connected to the common public line, operating in a pool system (such as the Eastern Export Corridor).

Already in the beginning of 2021, conveyor belts will link Cavalca Administração Portuária’s (CAP) new warehouse (with static capacity of 55,000 tons) to the shiploaders.

Private Investments at PASA – Berth 204

In September, the State Government authorized the company PASA (the first sugar specialized terminal in the south of Brazil, which is currently operating berth 204) to make investments of R$ 117.7 million in its port complex.

With the installation of new equipment and building of a new warehouse, the contract expects an increase in annual handling capacity from 3.6 million tons to 6.7 million tons of sugar. The project is divided in two phases, which should be completed in February 2023, making the Port of Paranaguá a major sugar exporter.

Expansion Works at the Port of Antonina

Ponta do Félix Port Terminal (TPPF), a private terminal located at the Port of Antonina, is currently undergoing significant expansion works, which aim to more than double the terminal’s cargo handling capacity.

The first and second stages, which are already underway, aim the construction of a new fertilizer warehouse (capacity for 120,000 tons) and the construction of a set of vertical silos, for grains, bran and cereals. The project also aims the expansion of the pier by 170 meters in the coming future.

** TPPF expansion project.

Safe Navigation – Permanent Dredging

The ports of Paraná started the month of October, 2020, with the largest number of dredging equipment operating simultaneously in Brazil. There were seven units in activity at the same time: four dredgers, two barges and a leveler. The fleet set is unprecedented in the country and speeds up the works to maintain depth in the ports of Paranaguá and Antonina[10].

The current stage aims to maintain a depth of 16.5 meters in the external area of the channel, 15.5 meters in the internal area of the channel, 14.5 meters in the inner area and 12.5 meters of draft in the berths at the Port of Paranaguá.

João Eduardo Kuhlmann

Kuhlmann Surveyors & Consultants

18th January, 2021.

References: [1] Brazilian exports will grow 13.70% in 2021, due to the strength of soy, oil and ore: https://www.sna.agr.br/exportacoes-do-brasil-crescerao-1370-em-2021-com-forca-da-soja-petroleo-e-minerio/ [2] Ports of Paraná consolidate handling record: http://www.portosdoparana.pr.gov.br/Noticia/Portos-movimentam-57-milhoes-de-toneladas-e-consolidam-recorde [3] With the largest reefer structure in Latin America, the Paranaguá Container Terminal (TCP) is the main frozen chicken exporter in Brazil, handling around 40% of the country’s production. [4] The Ports of Paraná continue to be the main fertilizer importing ports in the country, handling about 32% of what arrives in Brazil, most of which coming from Russia, China, Canada, Morocco and Belarus. [5] Paraná is the first Brazilian state to have autonomy to manage port area exploration contracts: http://www.aen.pr.gov.br/modules/noticias/article.php?storyid=103275&tit=Parana-e-o-primeiro-Estado-a-ter-total-autonomia-na-gestao-de-areas-dos-portos [6] Paraná is the first state to grant a port terminal at its own discretion: http://www.aen.pr.gov.br/modules/noticias/article.php?storyid=110243&tit=Area-do-Porto-de-Paranagua-e-leiloada-por-R-25-milhoes [7] Port of Paranaguá expands container loading capacity: http://www.aen.pr.gov.br/modules/noticias/article.php?storyid=110199&tit=Porto-de-Paranagua-amplia-capacidade-de-carregamento-de-conteineres [8] Ports of Paraná invests in maritime infrastructure: http://www.portosdoparana.pr.gov.br/Noticia/Portos-do-Parana-investe-em-infraestrutura-maritima-e-terrestre [9] Pier expansion increases cargo capacity: http://www.portosdoparana.pr.gov.br/Noticia/Ampliacao-do-cais-aumenta-capacidade-do-Porto-de-Paranagua [10] Dredging – Safe Navigation: http://www.aen.pr.gov.br/modules/noticias/article.php?storyid=109074&tit=Portos-do-Parana-dragam-quatro-areas-de-forma-simultanea