Highway to China

Frustrated by the lack of efficiency and capacity of Brazilian ports, Eike Batista, Brazil’s richest man (and the world´s 7th fortune according to Forbes), decided that he simply could not afford to wait. He would start building himself what will be one of the biggest ports in the world, a project that has already been called the Highway to China.

 

Construction of the future Acu Superport, situated some 400km north of Rio de Janeiro, near São João da Barra, is already underway, and is expected to cost $2.7 billion. The first element of the port complex is a cement causeway, that will have a four-lane highway, pipelines and conveyor belts to transport resources like iron ore (Batista´s main business), soybeans or oil to ships. The causeway extends 3km into the Atlantic Ocean.

We have enormous iron ore mines, so it’s a logistics business, because without logistics we can’t transport to China” Batista says. “There are huge mines and huge oil reserves right in the vicinity of this complex, 85% of Brazilian oil production is within 150 km radius”. The area Batista is developing would include oil refineries, car factories, an energy plant, and will occupy an area bigger than Manhattan. And he wants to run as much of the operation as possible, so it can be truly efficient. When finished, it will be the biggest port in Southamerica and employ more than 50,000 people.

 

The port would not only serve Batista´s companies, but other companies and industries as well. He has also managed to woo foreign investors into sinking money into the development. A Chinese company has already pledged to invest five billion dollars to build a steel factory there.

It is precisely China´s insatiable appetite for iron ore from Batista´s mines and other raw materials, and the painfully slow movement of containers through Brazilian ports, what has led him to come up with this idea. China is currently Brazil’s main export destination in value terms, according to Datamar: a 31%. The US, in contrast, is a distant second, at 11% in 2011.

But he has found in this lack of appropiate infrastructure an incredible opportunity for doing business on an even grander scale, and in the process he will help Brazil be more connected to the world.

 

This year, Ports in Brazil are expecting to handle a billion tons of cargo for the first time, according to estimates by ANTAQ , Brazil’s National Agency for Waterway Transportation. This would mean a 12.3 percent increase compared to 2011. Investments in the past six years have been responsible for these records levels. Batista’s new port will certainly contribute, because it is the single biggest investment in ports in Brazil.

To read my article in PDF, with photo credits, etc: Highway to China.

For more on Brazil-China relations, read this PDF.


Advertisements