On the up

The maverick Venezuelan president Hugo Chavez, who has just received a mandate to continue as president for the next three years, declared at a top-level meeting of Mercosur ministers and leaders that he wanted Venezuela to become a member of the trade bloc within the next year. He then went on to visit a shipyard ? Astilleros Rio Santiago (ARS) ? in Argentina and promptly told that country?s left-wing president, Nestor Kirchner, that he wanted to repair five old tankers (belonging to Venezuelan oil carrier PDV Marina) in the Argentina yard.

Trade deal

It is all part of Chavez?s cocking a snook at the United States hegemony in the region, as he builds up trade contacts with Cuba?s Fidel Castro and Kirchner. It is also all part of a trade deal that will see Argentina receive $240million of fuel oil in exchange for the shiprepair services and other Argentine exports. There is also talk about PDV Marina (the shipping arm of oil giant PDVSA) building four new vessels in the Argentine yard. The news is welcomed by the Argentine shipbuilding industry which had seen numbers employed fall dramatically from 25,000 back in the 1980s down to just 4,000.

A spokesman for ARS said that now that the Venezuelan referendum was over PDV Marina was keen to talk about building two oil tankers and two asphalt carriers in Argentina. And there was also a possibility that ARS would construct a ferry for Venezuela for use between the mainland and the Venezuelan holiday island of Margarita.

Meanwhile, in Brazil the shipyards have recently improved their turnover and output tremendously indicating a major breakthrough. After the numbers employed in the Brazilian shipbuilding sector fell from 40,000 at the end of the 1970s down to just 500 in 2000, they have now risen to 16,000 and could rise sharply again if promised projects progress.

If, for example, the country?s state-owned shipping line Transpetro moves ahead with its plan to construct 22 new oil tankers in the next few years direct workforce numbers could soar to around 28,000 or higher. The majority of these newbuilds are expected to be built in Brazilian yards, despite the lack of financial guarantees available. The Brazilian government recently vetoed plans to set up a ship guarantee fund (the FGIN) due to cost and many thought that would set back the shipbuilding industry some years. But instead a rush of companies were ready to offer their services to build the vessels for Petrobras. But, typical of South America, the whole thing has become very political.

The President of Brazil, Luis Inacio Lula da Silva gave a commitment to boost shipbuilding in Rio de Janeiro during his 2002 election campaign, but has since fallen out with the state governor of Rio de Janeiro, Rosa Garotinha. Now Lula seems reluctant to pass over lucrative shipbuilding contracts, via Petrohras and Transpetro, to his adversaries.

Sergio Leal, the secretary-general of Sinaval, the Brazilian Shipbuilding Association said that the Transpetro fleet was “very old and too small” and urgently needed renewing. He told The Motor Ship: “As well as the tankers for Transpetro, Petrobras has an ambitious plan to replace many of the Platform Supply Vessels it charters in Brazil with its own fleet, possibly of up to 100 PSVs.”

An engineer at Aker-Promar, which operates a shipyard at Niteroi, in Guanabara Bay, Rio de Janeiro, said that he believed the breakdown of the 22 newbuilds would be: six Suezmaxes, seven Aframaxes, three Panamaxes, four product carriers and two LPGs. Transpetro has already had a bad experience trying to get vessels built at the Eisa yard in Rio, but backed out owing to a lack of guarantees. Of the other Rio de Janeiro yards most experts believe that only a handful of the 15 yards currently open could possibly take on the Transpetro and Petrobras orders.

Decentralisation

But three companies are keen to decentralise the shipbuilding industry in Brazil, and they almost certainly have the backing of President Lula.

Aker-Promar ( a joint venture between the Norwegian shipbuilder Aker Yards and Brazilian outfit Promar) has developed a programme to build a new shipyard in southern Brazil, either in Navegantes or in Rio Grande. At the same time another company, Camargo Correa, has promised to build a $110million shipyard in the industrial port complex of Suape, in the northeast.

Partly due to the backing of the state government for Rio Grande, and to a greater draught of 12 metres compared to 11 m at Navegantes, The Motor Ship can reveal that Aker Promar has chosen Rio Grande, despite no tradition of shipbuilding in the region. Leonardo Ferreira de Alcantara, the director of marketing for Aker-Promar, says: “We are waiting for the Petrobras/Transpetro decision. If we get a sufficient share we will start constructing our yard immediately.” The 30 hectares yard will cost some $150million and will provide 5,000 direct jobs and up to 25,000 indirectly. It will become the largest ship yard in the southern hemisphere and will include a dry dock that can accommodate vessels of up to 400,000 dwt.

The port authority for Rio Grande has promised its full support and an arrangement has already been made to move the facility of Bunge Fertilizantes (a soya exporter) out of the earmarked site and into a new site.

In Suape a similar project is being hatched by Camargo Correa although construction of several oil platforms is supposed to take precedence over building the tankers for Petrobras. This outfit will also bid for some of the Transpetro business.

A third project, on a smaller scale, is also being planned for Rio Grande, with business partners Daniel Burrman and Raymond Pessoa, planning to invest around $30million in a new yard, to be called Estaleiro Rio Grande, to build platform supply vessels. One Aker Promar manager said: “We suppose that the Petrobras contracts will be shared, but we are aiming for the biggest piece.”

According to various sources, the Maua Jurong yard may pick up the contract for the Aframaxes, Brasfels (which operates the Verolme yard at Angra dos Reis and includes Singaporean builder Kepler Fels) has the capacity for Suezmaxes and Aframaxes but seems to be so concentrated on oil platform business that it would not be able to start construction for almost five years.

Reckoning

Other yards that could come into the reckoning are Sermetal Estaleiros, which has the potential but has mostly operated as a shiprepairer up to now and Rio Nave Servicos Navais Ltda, which has the size and technology but probably can?t provide the required guarantees for the larger vessels. Eisa says it will bid for the Panamax vessels.

One controversial project already underway is that of P&O Nedlloyd subsidiary Mercosul Line, which is building two 1,700 TEU container ships at the small Estaleiro Itajai shipyard in the south. The two vessels, costing some $66million, will be used for Mercosul Line?s growing cabotage service, and since PONL received the go-ahead it has been obtaining a Brazilian flag waiver from the Brazilian government.

Rival lines such as Maersk Sealand and Hamburg Sud have been crying “foul play” and the executive vice-president of Syndama (which represents Brazilian flag shipowners) tried to get the courts to cancel the waiver. Dick Meurs, the general manager for PONL in East Coast South America, said that not only had the desire to build been genuine all along, but the carrier was prepared to bury all hatchets and was ready to join Syndarma as soon as possible.

Estaleiro Itajai, which is owned by chemical carrier Metalnave, is expected to bid for the LPGs as well as it has experience in that sphere.

So it?s gloves off then and let?s wait for the action once the Petrobras/Transpetro tenders

go out in the third quarter of

this year. n