DP World has teamed up with Odebrecht, a Brazilian construction firm, to purchase a majority stake in a new Brazilian port terminal.
DP World enters South America with Brazilian port deal
DP World has teamed up with Odebrecht, a Brazilian construction firm, to purchase a majority stake in a new Brazilian port terminal, it said on Sunday The two companies will invest in Embraport (Brazilian Port Terminals Company), a multi-modal port terminal under development next to Santos Port in Sao Paulo state. The value of the deal was not disclosed. "This is an unparalleled opportunity to enter Latin America's largest economy and establish a strong position on the East coast," said Mohammed Sharaf, the chief executive of Dubai-based DP World. "With strong origin and destination cargo, Embraport fits our business model well."
Santos is an important regional shipping hub, with more than 90 per cent of imports bound for the city of Sao Paulo. The deal is the first for DP World, the world's fourth-largest ports operator, in Brazil, and its fourth in South America after Callao Port in Peru, Buenos Aires in Argentina, and Cabello in Venezuela. Other investors in the new Brazilian port include FI-FGTS of Caixa Econômica Federal, a Brazilian investment fund. Another early investor from Brazil, Coimex Group, will reduce its shareholding but remains a key member of the partnership, DP World said.
The first phase of the Embraport project will cost US$500 million (Dh1.83bn) and is slated to open in 2012, with capacity for up to one million standard containers per year. The port will primarily serve container shipments as well as ethanol. Odebrecht is involved in the chemicals, petrochemicals, sugar and ethanol industries, and its subsidiary companies are expected to benefit from the new infrastructure for the feedstock, DP World said.
When it is fully complete, Embraport will have capacity for more than 1.5 million containers and roughly two billion litres of ethanol. The two companies said DP World would provide its experience and help develop and operate the multipurpose port facilities, while Odebrecht would contribute with its experience in building marine terminals and managing infrastructure projects. Coimex Group will help develop foreign trade links with the port and also the logistics network, DP World said.
In the first six months of this year, volumes for the port operator declined by 10 per cent and by 7 per cent at its flagship Jebel Ali terminal in Dubai amid a "very challenging operating environment", Mr Sharaf said last week, causing net profits to slump 34 per cent to $188m. email@example.com