Hong Kong-based conglomerate China Merchants Port (CMPort) has signed on to a 1.5 billion reais (US$280 million) expansion of South America’s largest container port, reports Seatrade Maritime News.
The Chinese port operator inked the investment agreement to expand the Paranaguá Container Terminal with the Brazilian Ministry of Ports and Airports (known by the Portuguese initials MPOR). The 1.5 billion reais investment will focus on increasing storage and cargo-handling capacity at the port, located on its namesake bay in the southern state of Paraná.
MPOR Secretary Alex Ávila lauded the expansion project as consolidating Paranaguá’s position as “one of Brazil’s largest and most important terminals.”
CMPort CEO Xu Song cited growing confidence in the Brazilian market as the reason the company is “hungry for more investments”.
This marks the second expansion of Paranaguá Container Terminal funded by CMPort. The conglomerate agreed to purchase a 90-percent stake in the port’s management company TCP in 2017 for 2.89 billion reais (US$548.12 million).
[See more: China and Brazil are in talks over a transcontinental logistics corridor]
At the time the acquisition was completed in February 2018, TCP handled a container throughput of 0.92 million TEU (twenty-foot equivalent units). That figure jumped to 2.5 million by 2019, when CMPort completed more than 600 million reais (US$113.8 million) in expansion works.
The capacity made Paranaguá the largest container terminal in South America and one capable of receiving up to three of the world’s largest cargo vessels at time. It hit the 1 million TEU mark for the first time in late November of 2021; this year, it hit the same benchmark by mid-August, a new record that underscores the growing importance of Paranaguá as a cargo hub.
Expanding it again could help Brazil address costly logistical bottlenecks. One expert told BNamericas that a lack of port infrastructure for containers in the country increases the cost of international trade, causing Brazil to lose around US$1.7 billion annually.
Efforts to expand container capacity at Brazil’s busiest port hit a snag earlier this year that continues to cause delays. The Santos expansion project is aiming for a capacity of 3.25 million TEU; China Merchants Port has not specified its plans for Paranaguá.
