Shipbuilding Industry
With the resumption of the investments in shipbuilding and offshore activities by Petrobras, there was a revival of the offshore industry in Brazil, especially in Rio Grande do Sul, from 2008 to 2014. Due to its privileged geographical location and diversified economy, the State benefitted from many investments, particularly in the Shipbuilding Cluster of Rio Grande. Several shipyards have settled in the area, including Honório Bicalho, Rio Grande, Estaleiros Rio Grande (ERG1 and ERG2) and Estaleiros do Brasil (EBR) shipyards. For a decade, approximately R$ 15 billion were invested in the construction of shipyards and platforms.
One reason for the development of the shipbuilding industry in the State is its direct association with a set of pre-existing activities. Production and service areas involve everything from the supply of raw materials, components, hydraulic, electrical and automation systems to the manufacture of machinery and equipment. This diversity of services also includes support activities in logistic operations for road and water transport, cargo handling and port operations.
The geographical features of Rio Grande do Sul also contribute to explain the State’s prominence in the sector. The shipbuilding industry is established over a wide territory that comprises more than 50 municipalities. All its operations can be established over more than 400 kilometers of waterways - a unique situation in Brazil. The process begins at the Shipbuilding Cluster of Rio Grande, goes through the Patos Lagoon waterway and the navigable rivers of the Guaíba, Jacuí and Taquari systems. Then, it integrates, by land, the industrial axis of Porto Alegre-Caxias do Sul where the metal-mechanic, electro-electronic, automation, machinery and industrial equipment clusters are located.
Under the coordination of the Federal University of Rio Grande (Furg), an intense mobilization of local and regional actors was initiated for the creation of APL Shipbuilding and Offshore Cluster of Rio Grande and its Surrounding Area, with the support of the State Government. The cluster consists of ERG1 and ERG2, Honório Bicalho and EBR shipyards, as well as their chains of suppliers. In August 2014, the APL Association of the Shipbuilding and Energy Cluster of Rio Grande and its Surrounding Area was founded. It is an independent entity with 85 members that participate in the shipbuilding and energy sector production chain: Petrobras, shipyards, various industry segments, suppliers of goods and services, educational and research institutions, business associations and trade unions1.
The region's industry has been facing an economic downturn since 2014, due to the anti-corruption investigations of the so-called “Car Wash Operation” launched by Brazilian Federal Police Operation”, which involved Petrobras - the main client of the shipyards - as well as the largest business groups in the sector. Therefore, Engevix-Ecovix Construções Oceânicas, responsible for ERG1 and ERG2 shipyards, filed for judicial recovery in 2017. In this recovery process, the Engevix Group restructured its assets according to the Isolated Productive Unit (UPI) model, which protects investors interested in buying assets under judicial reorganization, allowing the company to sell such assets to interested parties. The assets for sale include the dock and porch of the shipyards, cranes for large structures and equipment2. ERG1 and ERG2 count on an area of approximately 700 thousand square meters, a large dry dock (350m x 133m), porches with a capacity of 600 and 2 thousand tons. Some international companies and shipyards are already assessing the structures for sale.
Honório Bicalho Shipyard, under the responsibility of the consortium QGI Brasil (Queiroz Galvão and Iesa Óleo & Gás), has an area of 320 thousand square meters and capacity to process 8.4 thousand tons of steel per year. With a dock that is more than 700 meters long, the consortium has capacity to build two FPSO platforms simultaneously, which occurred with oil rigs P-63 and P-58, in 2013. QGI Brasil also built the P-55 oil rig. The contracts amounted to approximately US$ 3.6 billion. In October 2016, QGI Brasil began to integrate P-75 and P-77 oil rigs, in operations that totaled US$ 1.5 billion. The project is expected to generate the creation of 1.2 thousand direct jobs and 3 thousand indirect jobs.
The EBR shipyard is located in the neighboring municipality of São José do Norte, over an area of approximately 1.5 million square meters. The integration of P-74 oil rig is being conducted in that area, and a contract of nearly US$ 740 million was signed. The integration is expected to be completed at the end of 2017.
The Shipbuilding Cluster of Jacuí Delta, established in Charqueadas, is one of the most affected by the Petrobras crisis. Launched in 2012, and with Iesa Oil & Gas as anchor company, the cluster contracts of supply to Petrobras totaled more than US$ 720 million and provided for the construction of 24 modules for six pre-salt oil exploration rigs. Iesa Oil and Gas has been in judicial reorganization and selling its assets since 2014.
Sector opportunities in Rio Grande do Sul
- Construction of ships for maritime cabotage.
Brazilian demand for FPSO (production storage and offloading) oil rigs persists, as there are oil reserves to be explored. Brazil will be the largest market in the world for oil rigs in the coming years3. Rio Grande do Sul has the necessary infrastructure to meet such demand. Therefore, the acquisition of shipyard assets sold in the judicial reorganization process provides an excellent opportunity for the State to rank high in this market.- Ship repair and maintenance facilities: There are very few shipyards for ship repair in South America, and due to its strategic position, Rio Grande do Sul can become an important center for ship repair and maintenance.
