Maersk Plans To Operate 400,000 Containers At Atlântico Sul Shipyard, In Suape Port, Pernambuco, If It Wins Auction

The Danish Company Is the Largest in Navigation on the Planet and Is Competing for the Internal Pier of EAS

It is not new that Maersk, the largest shipping company in the world, is eyeing the Atlantic South Shipyard, located at the Port of Suape in the city of Cabo de Santo Agostinho, southern coast of Pernambuco. The Danish company has been in talks with EAS since the beginning of the judicial recovery in February 2020. And now it has revealed its plans if it wins the auction that was set for this Thursday (07), but which now has no new date scheduled.

Through its subsidiary APM Terminals, Maersk revealed to Valor Econômico that it wants to start its eventual operation at the Atlantic South Shipyard, at the Port of Suape, with an initial capacity of 400,000 TEUs (a measure equivalent to a 20-foot container).

According to the Corporate Development Manager of APM Terminals in Latin America, Leonardo Levy, this would be “just” the starting point. From there, the expectation is that the market will respond to lower prices and that it will be possible to expand capacity, making Suape a ‘hub’ for the Northeast.

“We see a lot of potential in Suape. In addition to the possibility of adding more long-distance services, there is room to convert more truck cargo to cabotage, which is very strong at the port, but still suffers from high prices. We want to bring more competition to this market.”

Leonardo Levy – Corporate Development Manager of APM Terminals in Latin America

Maersk’s Plans Are to Invest R$ 2.6 Billion in a New Container Terminal

If it wins the auction for the internal pier of the Atlantic South Shipyard at the Port of Suape, Maersk intends to invest up to R$ 2.6 billion in a new container terminal at the site. To win the dispute, it will have to offer amounts that exceed its main competitors, the other global giant from the Philippines Tecon and a secret international consortium that was recently in Pernambuco and presented a strong proposal to buy the entire space for US$ 215,000,000.00.

The initial offer from Maersk was R$ 895 million for the southern pier. The Danish company, the secret consortium, and other competitors, Tecon and Cone Sul, had Wednesday (06) as the deadline for submitting offers. The last two, which already operate at the Port of Suape, have been trying to stall the auction, arguing that the Atlantic South Shipyard did not conduct a competitive process to choose APM as the “stalking horse,” which would have harmed competition.

The local court that had rejected the request for suspension has now decided to grant Tecon’s request, thus deciding to suspend the auction, generating another chapter in this story. According to the documents from the request, “the plaintiff company alleged that adherence to the constitutional principle of isonomy is necessary to guarantee equal opportunities; however, the Atlantic South Shipyard decided to confer Stalking Horse to the company APM Terminals B.V. (APMT), part of the Maersk group.”

Stalking Horse is the initial and upfront offer that an interested buyer makes to try to close a deal with a company that is in judicial recovery, giving the right of preference by allowing the opportunity to match the best offer.

In addition to the southern pier, sought after by Maersk, the auction aims to find a buyer for a second space, called UPI-B Central, valued at R$ 595 million. In October 2021, the Atlantic South Shipyard held an auction for both plots together, for R$ 895 million, but there were no interested bidders. Therefore, the idea now is to sell them separately.

Expectations Are for the Generation of Thousands of Jobs

Currently, the Atlantic South Shipyard has about 500 employees. Between 2007 and 2014, the entire EAS generated more than 11,000 jobs. At that time, the state of Pernambuco was pointed out as being in a state of almost full employment (when the unemployment rate does not exceed 6%).

The entire port industrial complex of Suape once concentrated more than 65,000 workers from not just Pernambuco, but also from various parts of Brazil. At that time, large enterprises were installed, such as shipyards, a refinery, a hub for equipment for the wind industry, among others.

Of the more than 60,000 workers, just over 42,000 were employed at the peak of the works of the Abreu e Lima Refinery. In 2021, the company serviced 11 vessels, generating revenue of R$ 65.4 million, making it possible to achieve a net cash generation of R$ 26.6 million.

The Atlantic South Shipyard, at the Port of Suape, is managed by the construction companies Queiroz Galvão and Camargo Correa. The companies aim to pay off debts with the National Bank for Economic and Social Development through the sale of assets. The BNDES is the largest creditor of the former naval industry project.