Maersk Wins Auction for Atlantic South Shipyard Area and Will Now Build a New Container Terminal to Compete with Tecon at Suape Port

Competition to Surpass the Danes Has Intensified. Expectation Now Is for a Drop in Container Handling Tariffs at the Location

APM Terminals, part of the Maersk Group, “only” had to cover the offer made by the consortium formed by Conepar and Tecon-Suape, from the ICTSI Rio group, to acquire the Atlântico Sul shipyard that was being auctioned (Isolated Productive Unit of the Pre-constituted UPI B). The Danes then offered R$ 5 million more than the competitors’ purchase proposal, which was R$ 450 million, and now they are expected to handle 400,000 containers at the Port of Suape, located in the city of Cabo de Santo Agostinho, southern coast of Pernambuco.

The competition had been quite fierce and marked by legal proceedings. Tecon tried to halt the auction in court, arguing that Maersk was being favored by being in the position of Stalking Horse (when the competitor has the right to make the first offer by the seller). The court initially accepted the request. However, upon re-evaluation, it understood that this condition was legitimate, as the Atlântico Sul shipyard had provided it in the tender through legal justifications.

The auction of part of the Atlântico Sul shipyard at the Port of Suape occurs because the enterprise has been in judicial recovery since 2020 and needs to settle a debt of around R$ 1.4 billion with the National Bank for Economic and Social Development (BNDES). The operation of the bidding must be validated by the judiciary of the municipality of Ipojuca, which organizes the sale for the payment of shareholders’ debts.

After the conclusion of these processes, Maersk is expected to begin the construction of a new container terminal in the area purchased, which has access to the sea. The proposal presented to the Port of Suape even before the auction period was for an investment of R$ 2.6 billion in the location for the handling of 400,000 TEUs (twenty-foot equivalent unit), which brings hope for the return of thousands of jobs to the region.

End of Filipino Monopoly and Drop in Tariffs

Maersk’s victory in the auction for the Atlântico Sul shipyard is celebrated by the Port of Suape itself. The arrival of this, the largest shipping company in the world, will end Tecon’s monopoly in container handling at the site.

The Filipinos have been operating at the Port of Suape since 2001 under a concession, thus enforcing operational standards of the organized port and charging what are considered the highest tariffs in the country.

Now, APM Terminals, from Maersk, will implement its Private Use Terminal (TUP) for handling outside the organized port, bringing competition to Tecon.

According to the president of the Suape industrial complex, Roberto Gusmão, Maersk will take the port to another level. “This is an important turning point for Pernambuco. The sale will allow for the arrival of an important HUB,” he says.

“We will have new long-haul routes, more competition, and rivalry. New weekly routes to Asia and Europe. The Maersk group was the only one to establish a memorandum of understanding, anticipating modernization, large vessels, and sustainability,” Gusmão states.

Return of the “Job Rain” in EAS?

Between 2007 and 2014, the Atlântico Sul shipyard generated over 11,000 jobs. Across the Suape industrial port complex, there were more than 65,000 workers from various parts of Brazil.

At that time, large enterprises, such as a refinery and a hub for wind energy equipment, were established. At that time, the state of Pernambuco was identified as having almost full employment (when the unemployment rate does not exceed 6%), until it succumbed after the general decline of the shipbuilding industry.

Currently, the Atlântico Sul shipyard employs around 500 workers. In 2021, 11 vessels were repaired at the site, generating revenues of R$ 65.4 million, resulting in a net cash generation of R$ 26.6 million. The enterprise is managed by contractors Queiroz Galvão and Camargo Correa.