What is the current capacity of the Port of Santos, its expansion plans, and how relevant are the petrochemical and chemical sectors to its trade?

The Port of Santos has capacity of 160 million tons (t). We will be expanding this capacity through 11 auctions we have modeled since 2019, six of which have already been held and another five will take place in the near future, aligned with the 2040 Port Development and Zoning plan, which would see an increase of capacity to 240 million t. This is coupled with investments in terminal equipment, services and capacity. Santos has one of the largest port complexes and only comes behind Vale’s mineral terminal in volume. In terms of the flow of commercial good, Santos leads the way in Brazil. It is a multi-purpose port that serves as a gateway to Latin America, and is arguably the most important port in the southern hemisphere.

The petrochemical and chemical sectors are some of the most important sectors to the port for two reasons.  Firstly, we have the capacity to handle 16 million t of chemicals and petrochemicals, which represents 10% of our capacity. Even more significantly, Port of Santos plays a critical role in the nations petrochemical value chain, accounting for 40% of all volume that goes through Brazil.

How is the privatization process at the Port helping to optimize operations?

The brownfield areas within the port expansion are key to unlocking the investments that will expand our capacity from 160 million t to 240 million t for all cargo by 2040. In 2022, we are on track to move approximately 155 million t of diverse cargo, bringing us very close to our maximum capacity. There are a lot of joint concession projects under development that will allow private companies to develop and run the infrastructure the port needs.

The reconfiguration and new zoning of the port was very important as some areas did not have a proper use allocated. For example, the STS 11 zone had multiple use contracts, and we discontinued most of these to create a unified vegetable and grain terminal with the capacity for 14 million t. Another example is the STS 10, which will be auctioned for a huge container terminal, and STS 53 zone, which will be designated for consolidation of diverse fertilizers.

Can you highlight some of the investments being made at the Port of Santos to implement innovation?

Digital transformation and service digitalization are key investments in order to increase efficiency and speed. The pandemic actually helped us accelerate the development of our digital offering for service requests, invoicing and automation, which brought lots of agility. We developed partnerships with startups to design and implement new systems around our workflow. For example, in return cargo we can make sure that trucks that leave the port to drop off goods do not come back empty. Ageo is working on developing a new berth for boats with 75,000 DWT. Vopak is working on an expansion plan for chemical product importation, including three new planned jet-lines to improve performance and reduce dock operations times. In addition, it wants to expand the terminal capacity by 20,000 m³ for the operation of new volumes.

Ultracargo has doubled capacity: in just five years, the company started from 152,000 m³ to 297,000 m³ of static capacity. This tanking is dedicated to fuels, biofuels and chemicals, which add up to more than 30 varieties of products. These are just a few of the examples contributing to modernization at the Port.

How have logistics bottlenecks in the last two years affected performance and volume at the Port?

The Port of Santos was able to avoid the bulk of these disruptions due to certain characteristics. Our large capacity for bulk cargo, grain and liquids with well-defined trade routes mean we offer flexibility that container ports cannot. In terms of container traffic, 2020 increased by 1.6% over 2019, but 2021 saw a 14% growth. SPA registered new records in overall volume with a 5.7% increase in volume during the first semester of 2022. Container traffic stagnated, and fell slightly by 0.1% in first semester in comparison with the first semester 2021. We expect it to grow in the second semester. Another advantage the Port of Santos had in avoiding bottlenecks is that we receive 330 m ships, whereas many big ports in Europe and North America use larger ships, which reduced the level of competition in securing vessels.

What are your main objectives for the Port of Santos in the next three years?

The SPA has a big focus on management, coupled with improvement to logistics access points such as rail, road and sea, including the approval of a R$ 900 million project to increase internal rail to get over the 50 million t capacity we currently have. We are also developing a channel dredging planning to add further capacity to the port, which is awaiting the necessary environmental licenses. Our concession model provides private companies opportunities to partner with us to make these investments, unlocking long-term access to develop infrastructure.