Chairman of EBX Group and Brazil’s richest billionaire, Eike Batista, plans to build a ten-berth port larger than Manhattan. Projected to be one of the biggest in the world, it will include a 1.8 mile cement causeway stretching into the Atlantic, complete with pipelines, conveyor belts, and a four-lane highway. The pipelines will carry oil from shore to ships’ holds, with conveyor belts being primarily used for agricultural products, particularly soybeans.
Eike Batista has been frustrated with incessant delays, often running as long as two months, in getting his iron ore onto ships bound for China and sees a new port as the only viable solution. The billionaire told CNN the new project has attracted both foreign and local investors and is seen as more than merely a pipeline to China. He noted that European and American companies tend to avoid Brazil’s huge market due to “very bad logistics.”
The billionaire sees “gigantic opportunity to arbitrage inefficiencies.” By this, he refers to simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices, not possible in an economy saddled with “very bad logistics.” For example, things which can be manufactured more efficiently overseas, yet not imported due to inadequate domestic facilities, will by default be manufactured at home. This inefficiency reduces economic growth and living standards, not much of a concern for billionaires, but is for average middle-class people struggling to keep their heads above water. In other words, the bulk of Brazil’s huge population — and to a lesser extent, surrounding countries — benefit from lower prices.
Eike Batista has budgeted $2.7 billion for the project and expects completion in 2012. The billionaire has been using his logistics firm, LLX, to ferry potential investors to the site 249 miles north of Rio de Janeiro. A number of Chinese officials and business leaders have visited the complex, as well as Brazil’s President.
The coast in this part of Brazil is sparsely populated, so road and rail infrastructure will be developed to support the new superport. Currently, visitors are ferried to and from the site via helicopter.