December 13, 2013
Private-run Rosario port thrives as state-run BA harbour declines
Greater Rosario Port complex providing services to Brazilian mining firm Vale
While Buenos Aires City harbour — Argentina’s only one still under state control after the sector was deregulated over 20 years ago — the Greater Rosario port complex in the powerhouse Province of Santa Fe has been thriving under private management.
Latin America’s largest agribusiness node simply referred to as ‘Rosario‘ handles about 60 to 70 percent of bread-basket Argentina’s agricultural exports, has been incorporating container activity and is headed to become an outstanding regional mining port mainly on the back of services provided to giant neighbour Brazil, experts told the Herald.
‘The active participation of ENAPRO has contributed enormously to the development of the Rosario Port Terminal (TPR) complex where at present the operation of loading and unloading is very diverse: steel products, fertilizers, iron ore, sugar and containers, among others,‘ said Vilma Carlini, a partner in Rosario-based Navy & Co Argentina SRL International Ship Chandlers, a company offering services to a dozen Argentine ports and to more than 30 international shipping companies.
ENAPRO is the agency running the Greater Rosario port complex, a roughly 70-kilometre long stretch on the River Paraná from Oliveros in the north to Arroyo Seco in the South. The City Port of Rosario itself is located 300 kilometres northwest of Buenos Aires.
Rosario complex expanding interests
‘The agribusiness exporting activity on the eastern bank of the river, favoured by its morphology, the depth of its channel and port expansion policies has seen a dramatic and sustained growth over the past years,‘ Carlini said.
Pedro Manno, ENAPRO’s Commercial and Operations Manager, said: “The industrialization and agribusiness bulk export was solved by means of billions of US dollars of private investment by the initial “five big sisters” — Cargill, Continental, Dreyfus, Bunge y Born and André, to which new leading international grain traders such as Glencore, ADM and Noble and the leading local groups such as Vicentín, Urquía, and ACA were added. Since the first concession in 1998 Rosario has maintained its spirit of public port for general cargo but has also incorporated the container business while keeping at the same time its grain terminal.
“Rosario wants to position itself as a node in the Hidrovía,” Manno said, referring to the Paraguay-Paraná rivers waterway stretching from Cáceres in Brazil to Nueva Palmira, in Colonia, Uruguay.
“Two years ago Brazil’s Vale, one of the world’s largest mining companies, held talks with the operator of Rosario. It may have also held talks with other ports. Vale could have clinched a deal with Nueva Palmira, or with San Nicolás, in the province of Buenos Aires, but the deal was clinched with Rosario. And now Rosario is headed to become a leading national and regional mining port,” he said.
Barges loaded with iron ore from Bolivia and Brazil, the Mutún-Urucún, Corumbá area, Mato Grosso, come down the River Paraguay to Confluencia, in the province of Corrientes, continue along the River Paraná and unload in Rosario where the load is transferred to sea-faring ships that formerly went, for example, to Nueva Palmira.
To bring that load to Rosario, to provide the required services, the concessionaire made an investment of hundreds of thousands of US dollars, Manno said.
“Investments in equipment to handle iron ore were made silently. We, as the Rosario Port Authority, accompany this type of initiatives and encourage and exert control within our responsibility but, actually, all trading is done by the private operators. The concession’s freedom implies that they can do all these businesses in an atmosphere of commercial privacy without interference from the port authority, beyond what may be indispensable.”
“We are providing services to Mercosur countries, because this is not an Argentine export. We are handling several million tons of Brazilian iron ore going to the international market. The Rosario complex is becoming a port for complementation with Brazil,” Manno said.
The ENAPRO official also said that some people are proposing the creation of a committee to handle that complementation between Buenos Aires and other ports on the River Paraná, for example, in the Dock Sud-Zárate arc, “but that would mean a lot of red tape. The idea is good: the complementation is healthy, even indispensable, but it must be left to be implemented by entrepreneurs. In any case, the state must act as a facilitator, especially by creating a regulatory framework to simplify the operation, without imposing conditions that render useless the efforts of private companies. But let there be no misinterpretation. ENAPRO is not absent. It focuses its efforts on other relevant activities such as the control of the concessions, port relations with the community, professional training, institutional and business publicity and, of course, essentially defending the status quo of a ‘public use port.’”
Buenos Aires Port declining
Meanwhile, Manno, said, although the Port of Buenos Aires City continues to be the focus of container cargo, in the face of fierce competition, it has lost hundreds of thousands of containers which have been captured by Montevideo or Zárate, or leave Rosario on feeder ships to be transferred at some foreign hub, a trend which is bound to increase in the face of Brazil’s mammoth revamp of its port system.
But Jorge Abramian, a member of the Professional Council of Civil Engineering (CPIC), said: “On the container field, the loads from Rosario must be transferred at some port to larger vessels. Shipping companies will take advantage of the economies of scale and will send large ships to the Atlantic. Those ships are arriving with limitation to Buenos Aires. The competition is not between Buenos Aires and Rosario but between Buenos Aires and Montevideo, or with the (Southern Brazilian) ports of Río Grande or Santos.”
The Port of Buenos Aires has been caught for several years in the middle of a dispute between the government of Peronist President Cristina Fernández de Kirchner and the centre-right administration of Buenos Aires City Mayor Mauricio Macri, which is unsuccessfully demanding that the nation hand over control of the port to the City.
Silvana Giudici, Undersecretary for the Strategic Plan of the City of Buenos Aires, says that “while other ports have been growing, that of Buenos Aires, not only due to administrative or governmental decisions, but also due to a conflict between logistics and urban development, is declining by the day, and the City’s identity trade-mark is at risk.”
A call for a national port plan
ENAPRO’s Manno favours the Port of Buenos Aires becoming autonomous, and the creation of a public non-state agency to run it, also saying that a strategic plan for the port cannot wait for a national transportation system programme to be drawn up.
But Antonio Zuidwijk, a connoisseur of maritime transport issues in Argentina and Brazil, said: “I agree with much of what Manno says. However, I insist that the approach should be much wider. The country needs to launch a debate on a strategic plan for all the Argentine ports. I have already advocated this when in the year 2001 the advance of the mega-ships started.
“This was crowned recently by the incredible arrival at Buenos Aires of a ship with a 9,600 TEUs capacity. There is no doubt that that this will change the whole system in the region.”
Referring to Rosario, Zuidwijk added: “The port of Rosario is already a relevant national node.” However, he clarified, that a “node” is not a “hub”, which is an entirely different system. A node is a strategic distribution centre but it does not connect a “pivotal port” with other ports. A “hub system” functions as the axis of a wheel and, through the spokes of the wheel, connects a “central or pivot-port” to peripheral “feeder ports.”
Abramian supported that view: “Rosario is in a strategic location and already is an important node in the waterway. All ports from Timbúes to Zárate are able to become transfer stations (nodes). There overseas traffic converges with local (river) traffic and there is the need for transfer stations for iron ore, rice, containers, etc.”
SHIPCHANDLER ACTIVITY takes a plunge
Regarding shipchandler activity, Carlini said that the sector has suffered a significant commercial decline over the past years due to, among other factors, domestic market costs which have become uncompetitive in relation to international prices, and the government’s policy of restricting imports needed to meet structural demands of the shippers.
The government is limiting imports to maintain a trade surplus at any cost, private economists say, warning that this strategy is leading to the loss of markets.
‘However, despite the above reasons, we believe that this situation will be gradually reverted,’ said Carlini, who is also the Vice-President of WISTA Argentina, the local chapter of the Women’s International Shipping & Trading Association.