DP World acquisition serves UAE Latam strategy well

Ports operator takes full control of terminal in Brazil's largest port

DP World has taken the majority stake in Brazil’s Empresa Brasileira de Terminais Portuários (Embraport). Courtesy DP World

Latin America is a crucial trading partner for the UAE, and for Dubai in particular. Earlier this year, the Dubai Chamber of Commerce and Industry set its a target of increasing the proportion of Dubai’s total trade with Latin America to 6 per cent by 2020 from 3 per cent this year, with that figure hopefully rising to double digits by 2022.

Brazil, the region’s largest economy, is central to such aspirations.

Trade between Brazil and
the UAE hit US$2.7 billion (Dh9.91bn) in 2016, dominated by meat and poultry products, iron, alu­minium, gold and precious metal crafts.

While Brazil’s political ­impasse continues, its economy appears to have turned a corner, exiting its worst-ever recession in the second ­quarter, with inflation appearing to abate.

The announcement by DP World that it has acquired full ownership of Brazil’s Empresa Brasileira de Terminais Portuarios (Embraport) is thus a significant step in the UAE’s attempts to enhance trade not just with Brazil but with Latin America as a whole.

The acquisition “underlines our commitment to the Port of Santos and the future of trade in Brazil,” said the DP World Group chairman and chief executive Sultan bin Sulayem.

Embraport – in which the world’s fourth largest ports operator has been an investor since 2013 – is the largest private multi-modal port terminal in Port of Santos, itself the largest container port in Latin America.

Some 90 per cent of goods that pass through the port are destined for Sao Paulo, Latin America’s most populous city.

The opportunities that come with the acquisition of Embraport – which is to be renamed DP World Santos – also come with challenges.

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Port of Santos has been affected by a series of slowdowns and strikes by customs workers in the past few months, leading to delays of up to a week in the processing of some containers.

However, such challenges should not dissuade DP World and other UAE businesses from venturing further into both Brazil and Latin America, given the rich rewards that are
on offer.