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Shipyards in Brazil are unable to compete with China

7 May 2018 to 16: 00
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china shipyard cheap labor

With cheap labor and low taxes, Chinese shipyards could break the Brazilian shipbuilding industry in 2020

Companies in the naval sector guarantee that they will be able to meet Petrobras' future demand. According to Sérgio Bacci, vice-president of Sinaval, which brings together the shipyards, the national industry is able to compete in terms of prices and deadlines with competitors, as long as equal conditions are given, mainly in the tax area. Even so, he recognizes that it is not possible to match the Chinese.

  • No shipyard, Brazilian, Italian, Norwegian, manages to set the price in China. The way labor and taxes are paid are different, they don't have our cost. If we consider how much we pay in taxes and labor here, we are competitive,” said Bacci, adding that at least ten shipyards have the capacity to build platform ships.

To avoid closure, shipyards have sought to diversify activities. They are preparing to participate in the Navy tender for the construction of four corvettes (warships). The ships will be built in the country and foreign shipyards are talking to the local industry in search of partnerships. This week, India's Goa Shipyard was in Brazil.

  • We are working so that the industry does not die. If nothing is done, in 2020 we will no longer have a naval industry – said Bacci.

IN SEARCH OF PARTNERS AND CUSTOMERS

The Enseada Indústria Naval shipyard, in Paraguaçu, in the interior of Bahia – which came out of extrajudicial recovery in November last year -, reflects the situation of the sector. Built at the beginning of the decade to manufacture six rigs ordered by Sete Brasil (under judicial recovery), it has 80% of the works ready. The shipyard has debts of BRL 2,6 billion and is seeking orders, including outside the oil and gas sector, in order to rebuild.

The president of Enseada, Fernando Barbosa, says that the only adaptation for building platforms would be the construction of a dry dock to manufacture the hull, which would not be a problem. Today, 80 employees work to maintain facilities. Enseada has Odebrecht and OAS as partners and is looking for new partners to continue its activities. The Japanese Kawasaki, technological partner, will leave the enterprise until the end of the first semester.

  • An environment is being created that will attract new operators who will look for Brazil to provide services. I'm optimistic - said Barbosa.

The Atlântico Sul Shipyard (EAS), in Pernambuco, would also build rigs for Sete Brasil. He is negotiating with the government the temporary suspension of employment contracts to avoid layoffs among the 3.700 workers. According to Harro Burmann, president of EAS, the shipyard will complete five Transpetro oil tankers by May 2019, which are on schedule. He is not optimistic about Petrobras' new orders:

  • With China there is no competition, with the costs they have in labor and steel. Without equal conditions, I don't believe in orders.

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