Tecon Rio Grande S.A.

tecon


Country:

Brazil

Sector:

Industrial Transportation

Signing Date:

Feb 2004

June 2004

Total Project Cost:

USD 63M

USD 25M

Lender of Record:

IFC

IFC

Cordiant Exposure:

USD 9.1M

USD 8.1M


Company Description

Tecon Rio Grande is one of the largest container terminals in Brazil and was one of the first port terminals to be privatized by the Brazilian Government in 1997. The concession was awarded to Wilson, a large port/shipping service long established in Brazil. The container terminal can be reached by road, rail, and inland shipping via the Rio Grande River. It is Brazil’s southernmost container terminal and is attached to the Rio Grande port, which is the main port of Rio Grande do Sul State.

The port of Rio Grande is commonly known as the “Gateway to Mercosur” as it handles traffic to/from southern Brazil, Paraguay (a country without coastline and port), and Uruguay.

Deal Logic

The Tecon Rio Grande container terminal is a state-of-the-art facility that serves Brazil’s 4th largest economic zone. With diversified cargoes, destinations and shipping lines, the terminal is well positioned to take advantage of Brazil’s strong export growth.

Investment Rationale

  • Positive Long-Term Fundamentals: Brazilian exports have been boosted by increasing Chinese demand for raw industrial materials and agribusiness products. In order to meet increasing demand, the container terminal has continued expanding its capacity.
  • Strong Project Sponsors & Management: The main project sponsor has been doing business in Brazil since 1837 and currently acts as shipping agency for a significant amount of Brazil’s maritime cargo.  It has an excellent reputation and track record. It is a particularly strong towage and shipping agency.
  • Good Competitive Positioning: The project serves the third richest state in Brazil. It benefits from scale and from the sponsors vast distribution network. It ranks amongst the leading Latin American and Caribbean port terminal facilities in terms of productivity.
  • Good Security: The loan benefits from a strong security package.
  • Strong Environmental Oversight: The project meets the Government of Brazil environmental requirements and the World Bank Group policies and guidelines.