The growth potential of the Northern Arc ports

Brazil is a country of continental dimensions, with productive capacity that places it among the largest in the world. But none of this matters if there is no infrastructure to turn production into a global export machine.

That is why the industry is turning its attention to the Northern Arc ports. Today, we will talk about the growth potential of these terminals, what are the emerging ports in the region, and what they mean for the development of Brazilian international trade. Keep up!

What are the ports that make up the Northern Arc?

First of all, it is worth highlighting what is the Northern Arc when we talk about port conception. It is defined by the infrastructure network around mainly 7 Brazilian ports, 6 in the northern region and 1 in the northeast:

• Porto Velho – RO;
• Miritituba – PA;
• Santarém – PA;
• Barbacena – PA
• Itacoatiara – AM;
• Manaus – AM;
• Itaqui – MA.

They are port terminals strategically positioned to expand the export product flow network in Brazil, bringing together producers’ ports, as well as encouraging the growth of the agricultural economy in new regions.

Not to mention, of course, the greater proximity of major markets such as the United States and the European Union, being a very attractive alternative to ports already established in the southern half of the country.

How are the Northern Arc ports gaining importance for Brazilian production?

According to the president of Maranhense Port Administration Company — EMAP — Ted Lago (responsible for the operation of Itaqui), “the starting point is the investment in infrastructure. There is now the possibility of directing what was previously exported from the southeast to the Northern Arc”. In practical terms, this means a new outflow route that fosters agricultural production in the region.

Lago explains: “For the areas of low productivity that previously were not worth the while to produce due to distance, with this new infrastructure, the areas become economically viable. This favors even the small producer.”

Without this infrastructure, the northern region used to suffer from an economic dilemma: viable options were the southeastern ports, but they are too far away to offset freight costs. With the development of the Northern Arc, this potential could finally be exploited. It is a gigantic market that emerges within a productive capacity that was previously dormant.

The differentials of the Northern Arc

Two other professionals in this area agree on this potential growth and point out the differentials that are changing the viewpoint of the domestic and foreign markets on these ports. Wellington Leiros, WS tug manager at the Belém branch, says that “there is a lot of room for growth and investment in new terminals and increased storage capacity for existing terminals. I imagine we are experiencing the beginning of this cycle”.

Mateus Melo, general manager of the Bahia de São Marcos Tugboat Consortium (CRBSM, a company of the Wilson Sons group), points out that there is also an important technical aspect in favor of this growth: “Ports have a favorable draft for larger ships, these are underexploited areas with a large capacity for expansion of the port area and the backyard”.

Melo also cites the relationship with one of Brazil’s largest trading partners, China: the proximity of these ports to the Panama Canal may shorten the trip to Asia by about 11 days.

Which products move up the region the most?

To exemplify this growth, we can cite numbers. Belém and Manaus have the ports that move the most containers in the region, especially Itaqui when it comes to bulk carriers.

The biggest highlight has been the flow of soybeans and corn through the Northern Arc. These terminals already account for almost a quarter of the country’s grain exports, and this relevance is far from over.

In addition, there is still a significant runoff of oil and its derivatives, as well as fertilizers. Both with great growth in the last year.

Itaqui’s example

The port of Itaqui is one of the ports that lead this development of the Northern Arc, mainly by the TEGRAM project (Maranhão Grain Terminal), which intends to make it the main exporting port of the region.

Ted Lago, who manages the port terminal, talks about how this development has been during his work in Itaqui: “Snce 2015, when we started our work here, we have a delegated port (managed by the State). We made investments to improve the operation, We reduced the waiting time by almost 60% by focusing on the operation, ando we also implemented management tools like Kaizen and BSC.”

He continues: “We have been able to improve productivity to allow more ships to operate in that same timeframe. There has also been a cultural change as we have managed the queue and have reaped the rewards. We recently opened the new fuel terminal. And with the forecast to build one more cradle for general cargo. “

According to him, Itaqui closed 2018 with a historical record of 22.3 million tons in handled cargo, consolidating its position as the main exporter of soybeans, corn, and bran of the Northern Arc.

Today, the port has 1.2 billion reais in investments, mainly private, and the idea is to reach the incredible mark of 3 billion as soon as possible. Sound like a distant dream yet? Quite the opposite! With terminal expansion, management modernization, and infrastructure development (such as the paving of BR-163, which is expected to be completed by the end of this year, and Ferrogrão, which is scheduled for auction by 2020), the ports of the Northern Arc are already a reality to broaden the Brazilian horizons.

This is a time for growth for all professionals working in the industry within our market: who manages, who produces, who transports, and who bridges all these steps.

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