DP World, the world’s fourth largest ports operator, acquired a further 66.67 per cent stake in Brazil’s Empresa Brasileira de Terminais Portuários (Embraport), making it the sole owner of the largest private multi-modal port terminal in Latin America's largest container port.
The UAE-based ports operator already held a majority stake in the terminal, situated in Port of Santos, through a partnership with Brazil-based Odebrecht Transport (OTP).
It said on Monday it had acquired the remaining stake from OTP, following approvals from Brazil’s anti-trust regulator, at a purchase consideration below 5 per cent of DP World’s net asset value as of the first half of 2017.
Non-oil trade between the UAE and Brazil was worth US$2.7 billion in 2016, according to the UAE's Ministry of Economy, dominated by meat and poultry products, iron, aluminium, gold and precious metal crafts.
The Dubai Chamber of Commerce and Industry said earlier this year it aims to double Latin America’s share of Dubai’s total trade from 3 percent to 6 percent by 2020.
“DP World has become a major player in the South American infrastructure sector with a network of container terminals in Peru, Dominican Republic, Argentina, Ecuador and Suriname and we remain committed to our role as a global trade enabler and targeting a broader strategy to grow complementary sectors in the global supply chain,” said Sultan Ahmed Bin Sulayem, group chairman and chief executive of DP World.
Under the deal, Embraport will be renamed DP World Santos. The terminal handled 3.4 million TEUs (twenty-foot containers) in 2016, with 90 per cent of incoming cargo destined for Brazil's most populous city of São Paulo, DP World said.
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Embraport has an annual capacity of 1.2 million TEU (twenty-foot equivalent units). The first phase of the project, which is awaiting further development, has provided 653 meters of wharf space and 207,000 square meters of terminal area.
Port of Santos has been impacted by a series of slowdowns and strikes by customs officers since October, with containers being delayed by up to a week.
DP World acquired its 33 per cent shareholding in Embraport in August 2013. In March 2017, the company was said to be close to purchasing the remaining shares of the terminal.
Brazilian media reported at the time that DP World was also a frontrunner to purchase 50 per cent of Brazil’s Terminal de Conteineres de Paranagua (TCP). This deal never materialised, with China Merchant Port Holdings (CMPH) acquiring a 90 per cent stake in September.
That same month, DP World announced that its operating contract for Indonesia’s PT Terminal Petikemas Surabaya (TPS) would not be renewed when it expires in 2019, as the company refocuses its expansion efforts in Latin America.
DP World’s gross container volumes increased by 13.5 per cent year-on-year on a reported basis in the third quarter of 2017 on an improved global trading environment, the company said in October. Growth growth was reflected across its three regions, the Middle East and Africa, Europe and the Americas.
The ports operator said last month it would build an economic free zone in Somaliland to capitalise on strong growth at the Port of Berbera, which the group has been managing since last year.
A total of 12.2 square kilometres of land has been earmarked for the Berbera Free Zone (BFZ), which is to be modelled on Dubai’s Jebel Ali Free Zone (Jafza), the Middle East region's biggest free zone. The new economic zone aims to position Berbera as a gateway port for east Africa, by encouraging investments and trade in the warehousing, logistics, manufacturing and related businesses.
The Dubai-based ports operator signed a 30-year concession agreement to manage the Port of Berbera in May 2016.
