Market Turmoil as JBS Prepares to Take Over Port of Itajaí Operations

The market reacted sharply to the Minister of Ports and Airports’ confirmation that operations at the Port of Itajaí may be transferred from Mada Araújo Asset Management Ltda to JBS. This move involves a series of conflicting reports regarding the Brazilian food giant’s management of the Santa Catarina terminal.

JBS, through its subsidiary Seara, will take over the temporary lease of the port, effective for two years. This “stopgap contract,” sanctioned by the National Waterborne Transport Agency (Antaq), aims to confer stability to the terminal remains operations until the Port of Itajaí concession, slated for 2025, is finalized.

Seara is expected to initiate operations between July and August. Concurrently, the federal government plans to release the final concession notice for the Port of Itajaí in the second half of the year. The new concession will span 34 years, with an option for an extension of the same duration. This will result in two parallel processes.

Thus, JBS’s involvement will be temporary, with the company operating the port until the new concession is awarded. According to regulations, JBS will be eligible to compete in the final concession process.

Operational Stalemate

The Port of Itajaí has been idle since the end of 2022 when the lease contract with APM Terminals expired. The Ministry of Infrastructure, then led by São Paulo’s current governor Tarcísio Freitas, failed to complete the concession process in time, resulting in a lapse in port operations.

The chart below compares container exports and imports at the Port of Itajaí from January 2019 and December 2022, the period in which container operations began to dwindle at the port. The data is from DataLiner.

Container exports and imports | Port of Itajaí | Jan 2019 – Dec 2022 | TEU

Source: DataLiner (click here to request a demo)

This lapse marked the first in a series of administrative missteps that rendered the port inoperable. In late 2023, Antaq declared Mada Araújo the winner of a contentious temporary concession notice. However, the company has yet to resume operations and faces mounting pressure to resolve the situation.

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