Naval Industry in Brazil: everything you need to know about it

  • 20/06/2024
  • 22 minutes

The shipping industry is a strategic sector for Brazil’s economy, which has an extensive coastline and a great demand for maritime transport. With a history of tradition and innovation, the Brazilian naval industry has been responsible for the production of vessels and vessels of high quality and technology.

In this post, we will cover the main aspects of the shipbuilding industry in Brazil, including its history, the current scenario, prospects and trends for the future. If you want to know more about the topic and understand how this sector can impact the country’s economy, continue here!

How important is the shipbuilding industry to the world?

The shipbuilding industry is one of the most important in the world, responsible for the construction and maintenance of ships, vessels, and other floating structures, as well as providing support for various other industries such as cargo transportation, tourism, fishing, and oil and gas exploration.

Shipbuilding has been a relevant activity throughout human history. Since ancient times, people have used ships for transporting goods, exploring new lands, and for military purposes. Over time, the shipbuilding industry has evolved and become more sophisticated, with the use of modern technologies and materials.

The importance of the shipbuilding industry is in several areas — and one of them is maritime transport. Much of the world’s trade is carried out through ships, which makes the shipbuilding industry central to global trade.

The ships are used to transport raw materials, manufactured products, oil and gas, food and other goods. Without this industry, shipping would be unfeasible, which would have a negative impact on the global economy.

In addition, shipbuilding is fundamental to the tourism industry. Cruise ships are one of the main tourist attractions, generating jobs and revenue for local economies. It is also crucial in the fishing industry, as it provides vessels for catching fish.

Another area where the shipbuilding industry plays a strategic role is oil and gas exploration. Drilling and production platforms are built to explore and produce oil and gas offshore, which is essential to meet global demand for fuels.

The shipbuilding industry also has a positive impact on the local economy, generating jobs and increasing the income of the population.

The construction of ships and vessels involves an abundance of labor, being an industry that requires highly skilled labor and employs many people worldwide, including welders, electricians, carpenters, mechanics, and engineers.

This type of industry also generates demand for materials and services from other areas, such as steel mills, transportation companies, and equipment suppliers. We can say that the shipbuilding industry is fundamental to the global economy, providing support for various other industries.

However, the shipbuilding industry also faces significant challenges. Global competition is intense and companies must constantly innovate and invest in technology to remain competitive.

The shipbuilding industry also faces pressure to reduce its greenhouse gas emissions and other pollutants, requiring investments in clean technology and more efficient processes.

Despite these challenges, the importance of the shipbuilding industry to the world remains undeniable, making it a vital activity for progress and economic and social development worldwide.

What is the history of the shipbuilding industry in Brazil?

The shipbuilding industry in Brazil began at the end of the 19th century, when the country became a center for ship production. During most of the 20th century, Brazilian shipbuilding was driven by the state’s demand for ships for its navy and the exploitation of natural resources such as oil and iron ore.

In the 1960s, with the launch of the federal government’s Target Plan, the Brazilian naval industry began to expand rapidly. The objective of the plan was to promote the economic and social development of the country through the industrialization and modernization of productive activities.

In 1968, the Brazilian Navigation Company (EBN) was created, whose main objective was the construction of national merchant ships. The company was responsible for the construction of several cargo ships, bulk carriers and oil tankers, as well as oil exploration platforms.

In the 1970s, the Brazilian shipbuilding industry experienced great growth, driven by increased demand for ships due to international trade. Ship production in Brazil reached second place in the world ranking, behind only Japan.

However, in the 1980s, the Brazilian shipbuilding industry began to face financial difficulties and to lose its competitiveness in relation to other ship-producing countries. This was due to the lack of investments in technology and the dependence of the Brazilian State as the main buyer of ships.

With the opening of the Brazilian economy in the 1990s, the shipbuilding industry entered a period of crisis and restructuring. Many companies have been privatized or closed, and ship production in the country has declined significantly. However, in recent decades, the Brazilian shipbuilding industry has undergone a recovery.

With the growth of oil and gas production in the country, the demand for ships and exploration platforms increased, which boosted Brazilian shipbuilding production. Furthermore, the federal government has been encouraging investments in technology and innovation in the shipbuilding industry, aiming to increase the sector’s competitiveness.

Currently, Brazil is a relevant producer of ships and oil and gas exploration platforms, with national and international companies installed in the country. The Brazilian shipbuilding industry has great potential for growth and contributes to the country’s economy and development.

What is the current scenario of the Naval industry in Brazil?

The shipbuilding industry in Brazil has gone through ups and downs in recent decades, but currently presents a scenario of growth and resumption of investments. Since the discovery of the pre-salt in 2006, the sector has stood out as one of the most promising in the country.

One of the main factors that have driven the shipbuilding industry in Brazil in recent years has been local content policy. It establishes that a minimum percentage of the equipment and services used in oil and gas exploration in the country must be produced here.

This policy generates a great demand for exploration platforms, ships and other equipment, which stimulated national production and generated new investments.

In addition, the exploration of the pre-salt generates a great demand for maintenance and repair services for ships and platforms. National and international companies have invested in the construction of shipyards and the modernization of equipment to meet this demand.

Another factor that contributes to the current scenario of the naval industry in Brazil is the increase in international trade. Ship production in the country has been driven by demand for cargo transportation and the tourism sector, which has shown significant growth in recent years.

Despite advances, the Brazilian shipbuilding industry still faces challenges. Global competition is intense and the sector needs to invest in technology and innovation to increase its competitiveness. In addition, bureaucracy and the lack of greater government incentives are still obstacles to the development of the sector. However, the current scenario of the shipbuilding industry in Brazil is quite positive.

The country has a consolidated industrial base and technical capacity to produce high-quality ships and platforms. The demand for equipment and services for pre-salt exploration and the prospect of growth in foreign trade are factors indicating a promising future for the Brazilian shipbuilding industry.

What are the prospects for the shipping industry in Brazil?

After a long period of stagnation, the Brazilian shipbuilding industry experienced a resurgence of investments in the last decade, resulting in an expansion and modernization of production capacity and an increase in ship production.

This recovery was mainly due to the growth of offshore oil activities, which demanded new vessels to meet this market, and the implementation of policies aimed at developing the national industry.

Currently, the prospects for the naval industry in Brazil are quite positive, with great potential for growth and development in the coming years. The country has a strategic position in the global naval production chain and has competitive advantages over other producing countries.

Brazil has a strategic position as a transportation corridor between South America and Europe, which tends to generate new business opportunities for the naval industry. After all, we are a country with a large stretch of coastline and numerous ports.

In this sense, the construction of ships and vessels to meet this demand can generate new business and jobs in the country. Brazil also has the potential to become a ship repair and maintenance center for the region. However, it is worth noting that competition in the sector is fierce and involves several nations.

To become a transportation corridor and a reference in the naval industry, despite existing initiatives to strengthen and incentivize coastal shipping, such as the BR do Mar program, Brazil still needs to make investments and maintain an attractive business environment for domestic and international investors.

What are the recent changes that have occurred in the area?

The shipping industry has undergone several changes, which have significantly affected the sector, such as those we will present in the next topics.

Commitment to Sustainability

The shipping industry is committed to sustainability and reducing environmental impacts. In this sense, it has been investing in technologies that reduce the emission of polluting gases, energy consumption and waste production.

At Wilson Sons, since last year, the tugboat fleet has relied on the tugboats WS Centaurus, WS Orion, WS Rosalvo and WS Castor, the most powerful and sustainable in the country, with more than 90 tons of static traction. The vessels are part of a construction cycle of six new tugboats at the Wilson Sons shipyards in Guarujá (SP), the first in Brazil with the Tier III standard of the International Maritime Organization, and have also received the third vessel of this cycle, the WS Rosalvo, already in operation at the Port of Açu (RJ).

With more efficient hydrodynamics, the new hull design of these tugboats allows a reduction of up to 14% in fuel consumption, consequently reducing the emission of greenhouse gases. Additionally, a reduction of at least 70% in nitrogen oxides contributes to improving air quality in ports, meeting a standard required only for emission control areas – such as some regions of North America and Europe – voluntarily adopted by Wilson Sons.

Offshore production growth

With the discovery of the pre-salt reserves and the increase in oil and gas exploration in deep waters, there has been significant growth in the production of offshore vessels, i.e., vessels that support the exploration and production of oil and gas in deep sea.

These ships are used for various functions, such as transportation of equipment, supplies and personnel, drilling and production operations, installation of platforms, among others.

The growth of offshore production has been one of the main drivers of the Brazilian naval industry in recent decades. It is the main responsible for the country’s participation in the global market and driver of the development of new technologies and processes.

After all, operating in deep water requires the use of advanced technologies and special materials. However, it is worth noting that offshore production also faces challenges such as oil price volatility, global competition, and pressure for greater efficiency and sustainability in natural resource exploration.

Increased international trade

With the increase in international trade, the production of ships and vessels increases in several countries, including Brazil. Global competition has intensified, encouraging companies to make investments to remain competitive.

Regulatory changes

Regulatory changes affect the shipping industry, especially in relation to safety and environmental standards. Therefore, companies need to adapt to the new requirements in order to continue operating in the market.

Regulatory standards regarding safety aim to ensure the well-being of workers, passengers, and the environment, as well as to prevent maritime accidents. Some of the key regulations affecting the shipping industry are:

  • International Convention for the Safety of Life at Sea (SOLAS): establishes international standards for ship safety, including requirements for construction, equipment, communications, and emergency procedures.
  • International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW): sets forth rules for the training, certification, and watchkeeping service for seafarers, ensuring that professionals in the maritime industry are properly trained and qualified.
  • International Convention for the Prevention of Pollution from Ships (MARPOL): aims to prevent maritime pollution, including controlling pollutant emissions, waste management, and protecting sensitive marine ecosystems.
  • International Ship and Port Facility Security Code (ISPS Code): establishes security measures for ships and port facilities, including security procedures, threat identification, and personnel training.
  • International Convention for Safe Containers (CSC): a convention that establishes international standards for the construction, maintenance, and certification of containers used in maritime transport, ensuring they are safe and suitable for their intended purpose.
  • International Safety Management Code (ISM Code): a regulation created by the International Maritime Organization (IMO) to establish an international standard for management and accident prevention through the implementation of safety management systems.

It is worth noting that companies that do not comply with regulatory standards may face regulatory sanctions and reputational damage.

What are the trends for the Naval Industry in Brazil?

The naval industry in Brazil presents several trends that are shaping the future of the sector and that must be closely monitored. See what are some of the main ones!

Strategic partnerships.

Strategic partnerships between national and international companies are a growing trend in the shipping industry. These partnerships allow the sharing of technology and experience, in addition to expanding business opportunities.

Business-to-business cooperation allows access to new markets and can reduce costs by sharing resources and infrastructure. In addition, strategic partnerships can lead to greater competitiveness of the companies involved, by combining their strengths and competencies.

Companies can develop joint projects, with mutual benefits, such as the construction of ships and vessels, the O&G market, among others.

However, the field also presents challenges such as the need for good communication and coordination among stakeholders, as well as clear agreements on resource sharing and intellectual property.

New materials

The shipping industry invests in new materials to make production more efficient and reduce costs. Lighter and more resistant materials such as aluminum, titanium and composites are being used in the production of ships and vessels.

These trends are shaping the future of the naval industry in Brazil, and companies need to be attentive to these changes to remain competitive and adapt to the new market demands.

As we have seen, to operate in the naval industry scenario in Brazil, it is necessary to be attentive to the trends and challenges of the sector, as well as to invest in technology and innovation. With these strategies, companies can prepare to face the challenges and seize the opportunities that arise in the future.Check out our list of 9 websites and apps for those who work with cargo ships.