Chinese shipping companies expand in Latin America

Updated: 2014-04-07 05:47

By ZHANG FAN in Beijing (China Daily Latin America)

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With all of its farm exports, Brazil's market potential is seen as 'huge'

Chinese shipping companies are expanding their operations in Latin America to take advantage of the region's rapid growth and large potential.

Shanghai-based China Shipping Group, one of the country's leading shipping enterprises, recently established its South America Holding Corp in Brazil to explore opportunities throughout the region.

The South America office is China Shipping's seventh international holding corporation; the other six cover Asia, Europe, Africa and North America.

"This market grows very fast and our business increased steadily in recent years, so it is the right time to elevate the current cooperation to a new level," said Tan Shumeng, managing director of China Shipping (Brazil) Agency. "The South America Holding Corporation completed the global map of China Shipping."

The company is located in Sao Paulo, the commercial center of the region.

"Sao Paulo has the largest international port in the region, the port of Santos. We can arrange many shipping lines, which is very convenient for us," Tan said.

"Brazil's exchange controls are less strict compared with other regional countries. This is another reason for us to choose Brazil to establish our South America corporation," he added.

China Shipping entered the Latin American market in 2004 and established the Brazil Agency in 2005. It also has set up agencies in Argentina and Chile and explored the markets of Peru, Venezuela and Bolivia through cooperation with local agencies.

"We hold high expectations for this region, especially Brazil. The 2014 FIFA World Cup and 2016 Olympic Games mean many infrastructure construction projects," Tan said. "Brazil is also a large agricultural exporting country, so the market potential is huge."

Besides China Shipping, China Ocean Shipping (Group) Co also established local bureaus in Brazil. COSCO Brazil was established in 1994 in Sao Paulo and has expanded rapidly because of the trade between China and Brazil.

More than six international shipping companies have developed shipping lines in Latin America, including the world's top 10 shipping enterprises such as the Maersk Line, CMA CGM Group and CSAV Group.

"We are cooperating with these companies in the South America line to guarantee our service to clients, so we are both competitors and partners in this market," Tan said.

Trade growth between China and Latin America led to a 7 percent annual increase for China Shipping in the region, with shipping volume in 2013 reaching 180,000 tons. The company expects to increase that to 200,000 tons in 2014.

"The South America shipping line is our longest and China Shipping has devoted about 9 percent of our total transportation capacity to this region," Tan said.

The company holds about 70 to 80 percent of the Brazilian market.

"China Shipping has a very complete network in China, which is one of our leading advantages in China-Brazil trading, and we will steadily explore the network in Brazil to provide more convenience to companies from both sides," Tan said.