Itajaí Port still waiting for a definitive solution amid port challenges

In December of last year, Itajaí emerged as the largest economy in Santa Catarina, boasting a GDP of R$47.8 billion, according to 2021 data from the IBGE. This marked a significant achievement for the city on the northern coast, which surpassed Joinville’s R$45 billion GDP after eight years in second place. The milestone was celebrated by the local government and business community.

However, since the end of the 22-year lease agreement with APM Terminals, part of the Danish group Maersk, in December 2022, the Port of Itajaí, a key driver of the region’s economic growth, has faced substantial challenges. Due to political and administrative delays in the bidding process for a new long-term concession, container movement at the port has come to a standstill. In 2023, only 334 loads passed through the port under a temporary six-month extension of the contract, and none in 2024—a stark contrast to three years ago when the port handled over half a million containers.

A temporary solution emerged in May when the Minister of Ports and Airports, Silvio Costa Filho, announced JBS as the new operator of the Port of Itajaí’s container terminal under a two-year buffer contract. The multinational food producer, alongside BRF and Aurora, has been one of the port complex’s largest clients, particularly for exporting chicken and pork.

Impact on the Workforce and Industry

The halt in port operations led to the unemployment of approximately a thousand workers, as reported by the port workers’ union to Portal Guararema News. With no container movement at the Port of Itajaí, major industry players began to incur monthly losses of R$2.3 million due to the need to reroute cargo to other ports, according to Jorge Luiz de Lima, executive manager of the Meat and Meat Products Industry Union in the State of Santa Catarina (Sindicarne).

“The companies had to adjust their operations, making longer trips to Itapoá, Imbituba, and even Rio Grande in Rio Grande do Sul. Since this involves foreign trade, they absorbed much of the additional cost,” Lima explained.

JBS is expected to appoint its subsidiary Seara, which already operates the Braskarne port terminal in Itajaí, as the controlling company for the Port of Itajaí. This follows JBS’s acquisition of 70% of the shares in Mada Araújo Asset Management, which won the auction for the port’s temporary lease in December 2023. As new workers are being hired, container operations are expected to resume in the second half of the year.

Focus on Long-Term Solutions

During the buffer contract period, the Federal Government has pledged to release the final notice for the lease of the four berths at the Port of Itajaí to the private sector. The lease could last up to 35 years and be renewed for an equal term while preserving the port authority public and city-owned —a central sticking point during the Bolsonaro administration, which had sought to privatize the port. This plan was halted with Lula’s election in 2022. A virtual public hearing to finalize the notice was held in April, and after incorporating suggestions, the document was submitted to the Federal Court of Auditors.

Egídio Antônio Martorano, president of the FIESC Transport and Logistics Chamber, views the designation of JBS as the port’s operator as a relief. Nevertheless, he cautions against losing sight of the primary goal. “It is crucial to specify how investments will be made, as the concession notice is anticipated to be published by the end of 2024, and the auction is slated for the first half of 2025. This needs to be specified in the concession in detail. We run the risk of losing market share without this,” Martorano stressed. Among investments deemed necessary are finishing the second stage of the port’s turning basin expansion to accommodate ships up to 366 meters in length and permanently dredging the mouth of the Itajaí-Açu River. The projected cost of these projects is R$2.8 billion.

While JBS has yet to reactivate the two berths of the container terminal, the public port of Itajaí, which also has two berths, continues to handle wheeled cargo, pulp, and general cargo and has welcomed dozens of cruise ships. Nearly 100,000 passengers disembarked in the city for tourism during the last summer season. In June, SC Portos took over the temporary lease for handling general cargo in the public area. The company aims to maintain regular operations for this type of cargo, excluding containers. The contract is valid for six months and can be renewed for another six months.

Source: Guararema News

Click here to access the original news report: https://guararemanews.com.br/economia/de-volta-as-cargas-porto-de-itajai-ainda-espera-por-edital-definitivo/

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