05/12/2023
APM Terminals pledges EUR962 million investment in Brazilian Terminals by 2026
As part of a Dutch trade delegation to Brazil this week, APM Terminals’ CEO Keith Svendsen pledged a EUR962 million (R$ 5.2 billion) investment in its Brazilian operations up to 2026.
This figure includes a EUR296 million (R$ 1.6 billion) of a total EUR 483 (R$ 2.6 billion) investment exclusively for the Phase One development of a new terminal in Suape. The terminal, located in Estaleiro Atlântico Sul, is in the final stages of acquisition and will rejuvenate infrastructure and increase competition in the port.
APM Terminals has committed an additional EUR666 (R$ 3.6 billion) of investment to the company’s four other terminals and inland depots, by 2026. A large share of this, around EUR285 million, is allocated to Brasil Terminal Portuário, Santos.
The company, which plans to multiply storage capacity fivefold at its inland container depots in the Northeast and Southeast of the country, will prioritise early renovation of its terminal in the Port of Santos, Brasil Terminal Portuário (BTP). BTP is operated in partnership with Terminal Investment Limited (TIL), a subsidiary of the MSC group).
Concession Extension
APM Terminals is negotiating with the federal government to extend its concession agreement, which expires in 2027, for another 20 years. In exchange, APM Terminals would modernise and double the current 1.5 million TEU capacity of the terminal, which is currently operating at close to full capacity (92%).
An initial investment of at least EUR285 million (R$ 1.54 billion) up to 2026, could realistically reach EUR408 million (R$ 2.2 billion) over the next five years due to ongoing improvements. As well as expanding BTP, APM Terminals and TIL expressed joint interest in a new container terminal at the Port of Santos, STS 10, located in an area adjacent to its existing terminal. The new government, however, has not yet defined the future of the project, which has been put on hold for reassessment.
Under the previous government, the tender was subject to controversy, as other port operators expressed concern over the dominance of Maersk and MSC, the parent companies of APM Terminals and TIL respectively. Responding to this, APM Terminals’ CEO Keith Svendsen said that experience in other countries shows that the concern is unfounded.
Doubling Capacity
With BTP operating at 92% capacity – and an 80% capacity generally seen as the maximum for optimal efficiency, Svendsen stated: “Our primary focus is increasing capacity and modernisation. There is now an urgent need for investment in the Port of Santos, both to ensure the deepening of the access channel - which will allow the entry of new, larger, and more efficient ships - and to expand capacity of the port complex, which is close to the limit.”
Zero Emission Goals
Any investments in the terminal will also be an opportunity to uniquely position the terminal with low or zero-emission container handling, something which is increasingly being demanded by customers. APM terminals has committed to Net Zero Greenhouse Emissions by 2040 and a 70% reduction in absolute (total) emissions as an interim milestone for the period 2020-2030 for its commercially controlled terminals. This will involve investment in the electrification of equipment, purchase or generation of renewable energy and optimisation.
In 2018, APM Terminals invested heavily in its Way of Working (WoW), which draws on Lean principles. This efficiency mindset has led to, among other things, cost savings and reduced time in port for vessels. APM Terminals is on track to reduce average port stay reduction by 20% in 2023 compared to 2021 and achieve a 30% reduction by 2025 worldwide.