SHIPPING | Made in Brazil

Rainbow Nelson | LLOYD’S LIST

It has been a long-time coming but Brazil is becoming accustomed once more to the sight of long-haul ships being launched in Brazilian waters.

The symbolic floating of a fleet of new tankers, container vessels and offshore supply ships ahead of Brazilian presidential elections is no coincidence and represents the culmination of a bold policy by president Luiz Inacio Lula da Silva to revive what was once the world’s second largest shipbuilding industry.

When presidential elections are held in October, Mr da Silva hopes his anointed successor, Dilma Rousseff, will inherit the political spoils of his decision in 2002 to raise the ‘local content’ for major Petrobras contracts for oil rigs, tankers and offshore supply vessels.

After eight years in charge of state-controlled energy giant Petrobras, the Brazilian shipbuilding industry has been transformed with 40,000 jobs created by more than $2bn of investment in new shipyards and another $5bn on the drawing board.

“Some say that in this globalised world, Brazil shouldn’t produce ships, it should buy them from Korea, China because they are cheaper. But we defend the idea that it was right to buy here so we would not lose our technology,” says Mr da Silva.

“We have many shipyards. We have shipyards in Rio de Janeiro, Pernambuco, Rio Grande, Rio Grande do Sul, we are building a shipyard in Bahia and we are going to build shipyards wherever they are needed because with this Brazil gains a lot.”

With an annual bill of $10bn for its maritime transport needs, Brazil’s largest company, Petrobras alone boasts an annual charter bill of $1.2bn. The construction of 49-vessels, at a cost of $4.7bn estimates Transpetro president, Sergio Machado, will save the company $500m a year.

In the future Mr da Silva hopes new yards will be exporting vessels to the rest of the world reducing even further the country’s negative balance of payments in the maritime sector.

“We are constructing a powerful structure to have a powerful shipbuilding industry in our country. We want to be exporters of drillships, platforms and vessels,” he says.

Transpetro has plans to launch four new tankers this year, the product of a protracted six-year campaign to build vessels in domestic yards.

In May, Petrobras’ shipping and logistics subsidiary, Transpetro, celebrated the launch of the first of its 49-tanker newbuilding program in the newly built Atlantico Sul Shipyard in Suape, Pernambuco, in the north-east of Brazil. It was the first vessel Brazilian-built vessel to enter the company’s fleet since the completion of Livramento, a product carrier that took 10 years to build was finished in 1997. A second, the product carrier Celso Furtado followed shortly after delivered by a second yard, Maua in June.

As much as the construction of Livramento represented the painful demise of an industry that fell to as little as 2,000 employees in 2000, Joao Candido and Celso Furtado represent its resurgence.

The suezmax tanker, Joao Candido took 29 months and construction took place alongside the construction of a state-of-the-art yard shipyard facility with a capacity to process 160,000 tonnes of steel a year and the training of 5,000 employees.

“We are building a road for the shipbuilding industry,” Mr Machado said at the recent launch of the Celso Furtado. “It was not easy. First we had to convince people that it was viable. We went looking for partners we had to convince them that it was possible, to look ahead, like Atlantico Sul is looking ahead, like other yards are looking ahead, it was not easy. We went abroad and people told us that it wasn’t possible to build ships in Brazil. People didn’t think that it was possible and there it is [the Celso Furtado]”.

Taking its name from a former economist who promoted the economic development of the north-east of the country, an area rapidly becoming Brazil’s new shipbuilding heartland, the second product carrier carries with it a lot of hope for Brazil’s politicians.

“We are proud that Celso Furtado’s dreams, his ideas can be transformed into reality, into steel and that steel can change the lives of people,” says Mr Machado.

South Korean shipbuilder, Samsung Heavy Industries, the technological partner and owner of a 10% stake in Atlantico Sul, now dreams of producing 20 such ships a year at the shipyard within five years. Two more launch ceremonies are programmed before the end of Mr da Silva’s tenure, to further underline his government’s achievements. A second product carrier will be completed by the Rio de Janeiro-based yard, Maua, and a second suezmax in Suape is scheduled for the August. All told, ten suezmaxes are due to be delivered from Suape in the next two years and both phases of Transpetro’s 49-tanker newbuilding program are due to be complete by 2014.

Transpetro has placed orders at five different yards, 22 of them at Atlantico Sul, eight with the Synergy Group’s yards Maua and Eisa shipyards, as well as orders for eight gas carriers at another yard still to be constructed in the north-east of the country. Three bunker vessels are being built at Superpesa and five product carriers at Rio Nave, both in Rio de Janeiro.

“Today we are respected in the world,” says Mr Machado. “Today we have the fourth largest tanker orderbook in the world.”

While Transpetro’s tanker needs and demand for oil platforms from parent, Petrobras, have dominated capacity at Brazil’s principal yards there are other vessels being built that point to future diversification.

At Eisa’s facility in Rio de Janeiro, five container vessels are being completed for coastal shipping specialist, Log-In. The first, Log-In Jacaranda was launched in May and will enter service in early 2011. The yard will deliver four more by the end of 2013.

“This is the first container vessel built in Brazil in over 15 years, thus showing that shipbuilding for local container cabotage has been resumed and orders for large vessels are feasible in the country,” says Log-In’s managing director, Mauro Dias.

It is also building two panamax bulk carriers at the Eisa facility at a cost of $165m. The first is due to be finished at the end of 2011 and a second in the third quarter of 2012

In the long-term, Mr da Silva’s maritime expert, Pedro Brito, special secretary for ports, is optimistic that investments made today will be durable in the long-term.

“The shipbuilding bases that we are inaugurating in this country have to be prepared to compete with the entire world,” he says.

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