Cofco buys a vegetable bulk terminal in the Port of Santos with investments greater than R$ 760 million

Cofco International, a Chinese food powerhouse, won the contract to explore the STS 11 Terminal in an auction held on Wednesday (30) at B3 in São Paulo. The company will invest R$ 764.8 million in the asset, which will be one of the country’s largest port terminals dedicated to vegetable bulk, with an annual capacity to handle 14.3 million tonnes.

The project will be built in two parts, with roughly 62 thousand square meters between warehouses 12A and 15 on the right bank of the Port of Santos in the first phase. Furthermore, additional space will be added in the third year of the lease, bringing the total to 98 thousand square meters.

Cofco will explore the asset for 25 years, with the possibility of renewing the contract for up to 70 years at the sole discretion of the granting authority. The company bought the asset for R$ 10 million, which will be paid to Santos Port Authority (SPA) in five annual installments, with 25% of the amount being paid as soon as due authorities approve the transaction.

In addition, the lessee will pay SPA R$ 3.7 million per month in fixed lease payments and R$ 5.63 per tonne handled in variable leasing payments. The possible annual revenue collected by SPA will be roughly R$ 100 million based on the estimated average handling movement foreseen.

Among the investments provided in the contract are quay fortification and dredging works, the acquisition of two new ship loaders, demolition and construction of new silos and warehouses, building new railway infrastructure, and restoring a historic building on site.

“Cofco’s STS 11 advances the port’s clustering plan by type of cargo, eliminating small and unproductive areas. As a result, we will now have one of the main vegetable bulk terminals in the country, bringing important revenue for SPA. This is the sixth among eleven auctions planned for 2019 – 2022. Five other auctions will happen by the end of the year,” said the CEP of SPA, Fernando Biral.

According to SPA’s Director of Business Development and Regulation, Bruno Stupello, “the acquisition of the terminal by a major player such as Cofco emphasizes the value of the facility and the project’s successful strategy, which included the redevelopment of a previously underutilized area. The new contract will be SPA’s highest equity revenue to date, reaffirming the pricing mechanism for large infrastructure assets.”

Check below the track record of Brazilian exports of soybeans and corn in 2021 through the Port of Santos. The data is from the DataLiner.

Exports of Corn (HS 1005) and Soybean (HS 1201) through the Port of Santos | 2021 | WTMT

Source: DataLiner (click here to request a demo)

11 auctions in 4 years

Including STS 11, the Port of Santos has promoted six of the eleven auctions planned for  2019 – 2022. They are STS 13A (liquid bulk), STS 20 (solid mineral bulk), STS 14 and STS 14A (cellulose), STS 08A (liquid bulk), and STS 11. The others are in the following stages:

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