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Chancay Takes Shape
APMT TAKES A SLICE OF EAS
News that APM Terminals is taking over 30 per cent of a failed shipyard in Suape came as a big surprise. Rob Ward looks at the implications
Writing about Brazilian ports and shipping means it’s easy to be accustomed to big surprises and shock news, but the announcement in late July that APM Terminals (APMT) will be taking over 30 per cent of the land currently occupied by Estaleiro Atlantico Sul (EAS), the failed shipyard in Suape, did come as a massive surprise to many Brazilian port and shipping aficionados.
APMT says it will invest up to Reais2.6billion (US$503.04 million) in the new terminal and will create 338 direct and 1300 indirect jobs in the process. It will open by the end of 2025, with a capacity for 400,000 TEU per annum, delivering a 55 per cent capacity uplift to the port as a whole.
The opening of the new APMT operated terminal is expected to herald a more competitive environment and in particular exert downward pressure on terminal pricing. Todate the ‘only game in town’ has been Tecon Suape, which serves the city of Recife (40km away and a metropolitan population of four million) and the state of Pernambuco, an important one for fruit exports (especially melons, mangoes, grapes and lemons).
PAINFUL RESTRUCTURING
EAS has been going through a painful “restructuring” process brought on by out-of-control corruption highlighted by the Lava Jato (Car Wash) political imbroglio that led to the demise of Sergio Machado, the president of Transpetro (the logistics and shipping arm of Petrobras, the state-controlled oil company) and various politicians in the PT left-wing government of Lula and Dilma Rousseff.
EAS opened in 2009 and was originally built for the construction of 48 Suezmax oil tankers for Petrobras, but only two were ever built and the first one, the 157,055 dwt Joao Candido, that was launched had “weak welding problems” so was not certified until a year later. Only four tankers were ever built by EAS and by 2019 administrators were called in to “restructure” operations and find “other users” for the area known as Isolated Production Unit B (UPI-B).
Against this background the liquidators, along with the Suape Industrial Port Complex (port authority for the port), adopted a dual strategy of selling off part of EAS (UPI-B) and creating competition for Tecon Suape, which is majority owned by International Container Services Inc (ICTSI) of the Philippines.
ICTSI also bid for the EAS site but its offer, of Reais450million, was just Reais5m less than that offered by APMT and, ICTSI says, it was not allowed to bid any higher and has since launched an appeal.
TIGHT-LIPPED
Sources close to APMT are staying tight-lipped, but the company did issue the following statement:
“APM Terminals has made the higher offer to acquire part of the area of EAS in the Port of Suape, with the intention of establishing and operating a container terminal.
“APM Terminals made an offer to EAS in the acquisition of an Isolated Productive Unit (“UPI-B Cais Sul”), which comprises part of the area of EAS shipyard, including its southern quay wall. APM Terminals has been declared the bid winner by the bankruptcy estate and is currently waiting for such decision to be confirmed by the judge responsible for EAS’s judicial recovery process. APM Terminals sees great potential in the region.”
Feedback from those close to APMT suggests that operating a terminal out of Suape will allow the multinational operator to develop a regional hub and give some options for liner services – both from Europe and, possibly, the Far East – to turn some vessels in Suape and relay cargo via smaller feeder ships. Its sister company Maersk Line owns the rapidly growing Brazilian flag operator, Alianca Navegacao e Logistica, which has regular services to the south of Brazil and the River Plate.
8 APMT has secured
access to 30 per cent of land of the failed shipyard, EAS, in Suape, but a legal challenge is underway
….developing business out of Suape and Pernambuco in the northeast of Brazil needs to ‘‘ be done very carefully to not disturb Pecem profitability…
However, one port consultant, who did not wish to be named, proffers the view that developing business out of Suape and Pernambuco in the northeast of Brazil “needs to be done very carefully, so as not to disturb the company’s efficient and profitable business out of Pecem,” located on the Brazilian North coast.
LEVEL PLAYING FIELD ISSUE
Another port consultant, based in Recife, commenting on accusations of current robust pricing in Suape, told Port Strategy that it “was unfair to blame high box costs purely on Tecon Suape”.
“It is the extortionate port fees paid to the federal and state governments that ratchet up the overall costs, and as a TUP [Private port terminal], the APMT terminal on the EAS site will not have to pay these fees,” he said. Further, that this, “To me seems to be grossly unfair, and I think Tecon Suape has good reason to challenge this arrangement with the justices. Perhaps a re-assessment of the existing port fees for Tecon would be a solution.”
GAINING A LIFE EXTENSION
Experience in the arena of STS crane upgrade/refurbishment has come on leaps and bounds. John Bensalhia charts the progress and expanding range of possibilities
Extending the life of a ship-to-shore (STS) container crane through upgrade and/or refurbishment is a development option open to ports and terminals that is progressively being taken. It is both a path to “getting even more out of what you have got” and frequently the most cost-efficient option. This applies across the board with STS cranes remaining in their original workplace or being redeployed or sold-on for use elsewhere.
The importance of a crane refurbishment/upgrade for STS units and for cranes generally has recently been acknowledged by crane supplier Liebherr which has launched a major new initiative in this sector of activity.
“Liebherr Transform is a new crane upgrade, modification and overhaul service for Liebherr Maritme Cranes,” explains Trevor O’Donoghue, Marketing Manager, Liebherr Container Cranes Ltd. “It is a range of ingenious upgrades, clever retrofits, machine overhauls and service modifications to breathe new life into customers’ existing machines. Our customers,” he elaborates, “already own some of the best container handling equipment and Liebherr Transform, through a series of hardware and software upgrades, using the latest available technologies, will unleash the full potential of the cranes. A team of dedicated engineers and technicians are on hand to custom design and implement the solutions.”
For Liebherr’s refurbishment contracts a project management structure is in place to ensure site work is planned and resourced correctly, with detailed method statements available in advance. Liebherr’s OEM design expert knowledge aims to ensure the upgrade and/or refurbishment project can be implemented as efficiently as possible on site.
As an example of this, O’Donoghue notes: “With our patented STS lift height extension system, we can increase the lift height of a crane in 4-6 weeks. Our system has minimal operational impact and does not require larger auxiliary equipment. We have a quality management system in place,” he elaborates, “to ensure components meet the design requirements and that there are no technical issues when it comes to installation.
“Continuous communication with all stakeholders ensures the smooth running of the project and a clear understanding of roles and responsibilities.”
Konecranes takes a turn-key approach across all modernisations. Jose Antonio Martinez, Product Manager, explains: “We conduct a rigorous inspection of the crane and quay, followed by stability calculations, and then we produce a functioning 3D model of the entire set-up.
“Once the project moves into the manufacturing stage, we ensure as many components are built in-house as possible and avoid delivering separate components to the customer’s site. This limits the impact of the project on our customers’ day-to-day operations.”
FOLLOWING PROCEDURES
Paceco’s Troy Collard says that there are many procedures that can be followed to achieve smooth refurbishment:
“Ensure the equipment, components, and labour are ready before commencing the work. Constant communication with
Source: Konecranes
the terminal is very important – for instance, about their vessel schedule and traffic that might affect the work progress. It is also important to co-ordinate with the owner and the subcontractors well. Plus, consider night shifts, and provide a buffer and critical path when planning the schedule.”
For a port to qualify for an STS crane refurbishment project, Martinez underlines that the business case must make sense. Effective payback is a pre-requisite. Also, considering the proposed upgrade/refurbishment in the context of the long-term marine plans of vessel operators with special reference to phased increases in vessel size including the impact of vessel cascading.
“Finally, we encourage customers to think about “the whole yard”,” comments Martinez. “If they are planning yard automation in the future, then it would make sense to look at expanding the scope of the STS refurbishment to also accommodate our “Path to Automation” approach.
“The condition of the crane structure, handling capacity, and the cost comparison of replacing the old cranes with new ones are the key criteria to determine if the crane upgrade/refurbishment is worth it,” observes Collard. “In today’s market, the cost of materials and shipping has soared to new levels, making crane modification more attractive to terminals and pushing out investment in new equipment to when inflationary pressures may have subsided.”
OPTIONS AND EXPERIENCE
Before crane upgrade takes place, Konecranes undertakes a rigorous inspection of the complete structure. “Our experts take note of weak points of wear and tear, which can then be reinforced during modernisation,” says Martinez. “This already adds one to two million moves to the lifetime of the crane,” he suggests.
By lifting or “giraffing” an STS or extending its boom, Martinez explains that the crane’s worth immediately
8 Rigorous planning
