Brazil has a large maritime industry due to its extensive coastline and river systems. The country has over 8,000 km of coastline and 8,500 km of navigable rivers. The maritime industry employs over 78,000 workers, concentrated in Rio de Janeiro, Pernambuco, and Amazonas states. The main drivers of growth have been the end of Petrobras' monopoly in 1997, local content laws requiring domestic sourcing, and most recently the discovery of pre-salt oil reserves over 200 km offshore. This has led to a boom in orders for offshore oil and gas support vessels to enable development of these deepwater fields. Brazilian shipyards have seen their order books grow significantly in recent years to

1. Brazil: Maritime Industries and Ports
Mikael Virkki

2. Brazil
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8 Million Square Kilometers.
7.491 Km of Coastline.
8.500 km of Rivers (Cargo)
200 million people

3. Brazil vs. Europe
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4. Number of Workers in Brazilian Shipyards
(2000 – June 2015) Source: Sinaval
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1910
3976
6493 7465
12651
14442
19600
29125
33277
40500
56112
59167
62036
78136
82472
68000
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 June
2015
Number of Workers in Brazilian Shipyards - 2000 - June 2015
Operation Car Wash
Pre-salt Oil

5. Shipyards and Shipbuilding Centers
• Pará and Amazonas Shipbuilding Centers
• Pernambuco Shipbuilding Center
• Bahia Shipbuilding Center
• Espírito Santo Shipbuilding Center
• Rio de Janeiro Shipbuilding Center
• Santa Catarina Shipbuilding Center
• Rio Grande do Sul Shipbuilding Center
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6. Map of Shipyards Source: Sinaval
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53 Associates

7. Distribution of Workers per States (2015)
Source: Sinaval
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• Rio de Janeiro concentrates 38% of the workers in the maritime industries;
• Pernambuco 27%;
• Amazonas 15%;
• Rio Grande do Sul 9%
• Santa Catarina 6%
• São Paulo 2%

8. Main Drivers of the Maritime Industry
• The end in 1997 of the Monopoly granted to Petrobras since the creation of the
company in 1953;
• The PROMINP (Mobilization Program of the National Oil and Natural Gas
Industry), created in 2003, and coordinated by the Ministry of Mines and Energy
and Petrobras. This program was inspired in the Local Content Requirements that,
since 1999, is associated with the Concession of Oil Fields to Companies. These
requirements and the certification system, created in 2007, are regulated by the
ANP (the Petroleum Regulatory Agency), implemented in 1998;
• Oil Price;
• China;
• FMM (the Merchant Marine Fund), since 2004, provided resources to the
development of the maritime industries;
• Ports (tugboats);
• Agribusiness (Pushers and bargers).
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9. Petrobras: the locomotive until today in the
O&G Industries
Petrobras is still the main contractor and locomotive of the maritime industry.
– Why? Oil is located into the deep sea and far from the coastline.
• Since 1999, Petrobras has two programs to support their operations:
– PROMEF (Transpetro) – Program for the Modernization and Expansion of
the Fleet:
• Oil Tankers, Suezmax, Aframax, Bunker, Gas, Products.
– PROREFAM (Petrobras) – Program for the Renewal of the Maritime Support
Vessels Fleet:
• Maritime & Offshore support vessels fleet.
• In 2006, with the pre-salt discovery, these programs gained more attention
from Petrobras and became the main drivers of the shipbuilding industry.
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10. Petrobras’ Strategic Plan: 2015-2019
(Source: Petrobras)
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11. Exploration and Production: Petrobras
• From the point of view of Petrobras: It took 60 years to produce 2 millions barrels per day;
• In 2020, Petrobras is expected to produce 2,8 million bpd.
• Today 90% of the oil come from fields operated by Petrobras.
• With the pre-salt oil, Shell, Total, Statoil, CNPC and CNOOC will increase their participation.
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12. Exploration and Production: Pre-salt
•In 2014, pre-salt oil represents 22% of the
production of Petrobras.
•In 2013, it represented 7%.
•In 2020, it is expected to represent 53%.
•Where is the Pre-salt Oil?
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13. Pre-salt Oil: Where is it?
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Pre-salt Oil200-300 km
6.000 –
7.000 m
200 km
800 km
USA
Asia
Demand will be
leaded by Asia
ES, RJ, SP
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SC
ES

14. So…
• WHAT THIS MEANS? More platforms, more supply vessels, more business in the maritime and oil
& gas industries.
• But port operations and agribusiness are also important drivers of the industry in the current
scenario.
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15. Summary of Shipyards Order Books:
2014 vs. First Half of 2015
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2014 1st Half of 2015

16. Order book by Shipyards and Type of
Vessels: 1st half of 2015
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17. Order book by Shipyards and Type of
Vessels: 1st half of 2015
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18. Order book by Shipyards and Type of
Vessels: 1st half of 2015
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19. Order book by Shipyards and Type of
Vessels: 1st half of 2015
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20. Order book by Shipyards and Type of
Vessels: 1st half of 2015
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21. Order book by Shipyards and Type of
Vessels: 1st half of 2015
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22. Order book – World Scene: 1st half of 2015
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Main building countries:
China (2.397)
Japan (918)
South Korea (840)
Brazil (167)
South Korean leadership in drill ships,
FPSOs and LNG Floating units.
European shipyards = cruise liners,
special ships and specialized offshore
vessels

23. Order book – World Scene: Defense
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24. O&G Industries Demand is Attracting International
Investments
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25. O&G Industries Demand is Attracting International
Supliers: Long term and Growing Demand
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Açu – Rio de Janeiro

26. Reflections on the Local Content
• How much of this investments are related to Local Content?
• Is Local Content a barrier to trade?
• Who should opened a subsidiary in Brazil?
• Local Content could be revised in near future?
• Let´s have a look at some of the suppliers to the oil & gas industry.
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27. Local Content: Level & Institutions
• Local Content level is between 45% and 70% (2014);
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28. Local Content:
Main Suppliers vs. Local Unit
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29. PORTS in Brazil
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• In a study made by the World Bank (IBRD) on logistics and the efficiency of the
transportation system in 160 countries, Brazil is the 65th.
• World Economic Forum: 135th between 144 countries, when comparing ports
efficiency.
• 97% of Brazilian Exports go through ports in Brazil, according to AEB (Brazilian Foreign
Trade Association).
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30. Ports: New Law in 2013
18.9.2015
• RENOVATION OF THE PORTS LAW (2013): Flexibilization of the Law, Multi-use
terminals, Private and Public. More competition to reduce freight cost, bureaucracy
and faster clearance of goods. Terminal + Shipyard. Revision of Ports Concessions to
increase competitivity.
• New criteria to explore and leasing to private companies of terminals in public
organized ports.
• Private Terminals can operate and handle third-party cargo. This will increase the
offer of port services.
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31. Map of Public Ports in Brazil (2014)
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32. Ranking of Public Ports
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33. Map of Terminals in Brazil (2014)
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34. Ranking of Private Terminals
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35. New Private Terminals in Brazil (2015)
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• Since the new Ports Law
34 new private terminals
were authorized by SEP
(Secretariat of Ports)
• Private Terminals
handled 146,2 million
tons of cargo in the first
quarter of 2015.
Investor Website
AMAGGI Exp e Imp Ltda http://amaggi.com.br/
Amazongás Distribuidora de Gás http://www.amazongas.com.br/
BAMIN - Bahia Mineracão http://www.bahiamineracao.com/
Caramuru Alimentos http://www.caramuru.com/
Chibatão Navegacão e Comércio http://www.grupochibatao.com.br/
Cia. Norte de Navegacão e Portos - CIANPORT http://www.fiagril.com.br/
CMPC Celulose Riograndense http://www.celuloseriograndense.com.br/
Ecoporto Praia Norte http://www.ecoportopraianorte.com.br/
Estaleiro Brasa http://www.estaleiro-brasa.com.br/
Estaleiro Enseada do Paraguacu http://www.enseada.com/
Estaleiro Jurong Aracruz http://www.jurong.com.br/
Flexibras - TUP Technip http://www.technip.com/pt-br/entities/brasil
Fundacão Municipal Porto Belo http://www.portobelo.sc.gov.br/
Hermasa Navegacão da Amazônia http://amaggi.com.br/
Hidrovias do Brasil http://hbsa.com.br/
Intermoor do Brasil http://www.intermoor.com/pt/
Ipiranga Produtos de Petróleo http://www.ipiranga.com.br/
Itapoá Terminais Portuários http://www.teconsc.com.br/
LLX Acu Operacões Portuárias http://www.prumologistica.com.br/
Louis Dreyfus Commodities Brasil http://www.ldcom.com.br/
Manabi Logística http://www.manabi.com/
Mineracão Buritirama http://www.mineracaoburitirama.com.br/
NOV Flexibles Equipamentos e Servicos http://www.nov.com/ContactUs/Locations.aspx?q=Brazil
Porto Sul http://www.ba.gov.br/
RioTuria Servicos Logísticos - TERFRON http://www.bunge.com.br/
RONAV http://www.ronav.com.br/
Saipem do Brasil http://www.saipem.com/
SS Naval Comércio & Servicos No Website
TGSC - Terminais de Granéis de Santa Catarina http://www.logzbr.com.br/
Transporte Bertolini http://www.tbl.com.br/
Ultrafértil http://www.valefertilizantes.com/
Zemax Log Solucões Marítima http://www.zemaxlog.com.br/

36. Cargo Distribution between Public and
Private Ports
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37. Type of Navigation
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72,6% - Long-range
23,4% - Cabotage
3,6% - Interior
0,2% - Maritime Support
0,2% - Port Support
Main Destinations (X):
China
Netherlands
Japan
USA
South Korea
Philippines
Main Products: Iron, Soy, Sugar, Corn,
Fuels and Mineral Oils.
Main Countries of Origin (M):
USA
China
Nigeria
Argentina
Australia
Canada
Main Products: Fuels and Mineral Oils, Fertilizers and
Manures, Mineral Coal, Petroleum Coke.
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38. Investments in Ports
Estimated Investments of USD 24 billions in Ports until 2017.
Why?
• 90% of Brazil´s Imports and Exports depend on the ports.
• Current capacity is unable to fulfil the growing demand and the economic
development. The recession was providential to the ports capacity to handle exports
and imports.
• New Ports Law opened opportunities to New Private Operators of Terminals in Rivers,
Lakes and along the coastline.
• What happens in China affects Brazil. Main destination of the Brazilian exports:
Commodities.
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39. Ports: Main Drivers
• EXPORTS:
• Agribusiness: Granary of the World.
• China is very important and main importer of Iron Ore and Soy (beans, bran and oil).
• What happens in China affects Brazil.
• IMPORTS:
• Fertilizers and manures: Agribusiness.
• Industrial Park modernization.
• Increasing of the CABOTAGE: the right to operate sea, air, or other transport services
within a particular territory.
• Opening of the economy to foreign competition.
• Infrastructure Modernization in general (Private and Public Investments).
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40. Ports: Examples of Finnish Companies in Brazil -
MODEL OF OPERATION IN BRAZIL
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• Kalmar / Cargotec:
• Own subsidiary in Santos –SP, Brazil;
• Own agent (Grupo F&F);
• Together with Terex, most sold Reach Stacker. RTG also has been sold.
• Konecranes:
• Own factory of industrial cranes in Sorocaba. Shipyards have been their best customers.
• Linde is responsible for the distribution of Reach Stackers and Forklifts.
• Container Handling Equipments (STS, RTG, etc.): own agent (JT & Partners).
• TCP Paranaguá utilizes these equipments.
• Mantsinen:
• Own director in Brazil responsible for the networking with local port operators.
• Comissioned agent (JT & Partners).
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41. Conclusions & Key Words for Both Sectors
• “CUSTO BRASIL”
• Bureaucracy
• Political Intervention
• Environmental Limitations
• Productivity
• Labor force: Educational Level
• Taxation
• Import Duties and Procedures
• Local Content
• Logistics
• Price Level
• Subcontractors
• Monetary and Financial Transactions
• Timing
• Short-run oriented
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42. Recommendations “Brasilia ei ole Suomi”
• Market Study:
• Where? Where is the best suitable place to be in Brazil?
• What? What model is more attractive to your business?
• How?
• Partner?
• Subsidiary?
• Agent and Representatives?
• “Time and Money” vs. “Corruption and False Promises”.
• Problem Solver, Partner (”Amigo”), customize your product to the
needs of the Brazilian customers.
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43. Expectations – Maritime Industry
• Revision of the Local Content: Timing (Petrobras) vs. Learning Curve
(Industries);
• Definition of New Bidding Rounds for the exploration of hydrocarbons:
predictability of the rules – clear schedules of next bids.
• With more predictability of the demand of vessels: maritime and offshore
industry could invest in innovation, qualification and also in better practices
of management and planning.
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44. Expectations – Ports
• Investments in new private terminals;
• Shipyard + Port Model: flexibility;
• More capacity;
• Decrease in State Intervention in the sector: Efficiency oriented.
• Logistics integration;
• Multimodal transport development.
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45. Contact Information
• Mikael Virkki, Advisor
• Contacts:
– E-mail: mikael.virkki@finpro.fi
– Office Phone: +55 21 3550 9522
– Mobile Phone: +55 21 99 741 6858
– Direct Phone: +358 20 469 5820
• Address:
– Finpro Rio de Janeiro. Avenida Presidente Antônio Carlos, 58 / 5⁰ andar.
Centro – Rio de Janeiro – RJ. CEP 22221-090. Brazil.
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46. Thank You