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A look into crucial aspects maximizing Montevideo’s port capacity

Interview - August 4, 2015

Emilio Perazzio, General Manager of Obrinel SA Terminal at the Port on Montevideo delves deep into the ongoing advances being made at the port and what is needed to ensure ships leaving Uruguay carry an implicit seal of quality recognized worldwide. 


Mr. Perazzio, before we start talking specifically about Obrinel SA, I’d like to know your thoughts on the importance of the Port of Montevideo for the economic development of Uruguay, and what do you think are the current priorities to increase the efficiency that’s being sought-after in the last few years.

Well, obviously, having a port of this kind is essential to the growth of a country like Uruguay. Its geographical location is ideal, in the Rio de la Plata, with a waterway of more than 3,000 kilometers.

We must work to further develop it and make it efficient, so that the companies can appreciate it for what it is, a plausible option.

Regarding what to do with the port, I think there are two crucial aspects.

First, we need investment, mainly to deepen the channel. That’s key to the kind of ships that are working in the world nowadays, and we also need them to leave here with fully loaded.

To achieve this, it’s essential to deepen the channel at least 13 extra meters, something we’re already doing through the gasification and contracts network.

This will surely take time, but the important thing is that it has already begun.

Secondly, it is very important to solve the problem of the port’s access. Today we are in a complex situation because of the number of trucks arriving. If we want to grow, we must solve this.

Development is not just about having the terminals where ships can be loaded, but it’s also about easy access to the merchandise.

All this without causing extra problems to the city, because you have to keep in mind that we share the same physical space with it, and in that sense the access issue is important.

I always say that we, as port workers, have to work hard in order to go unnoticed in the rest of the city. The day we achieve that, we will be working well and we’ll be growing in terms of quantity, which is what we all need.

There are also some infrastructure investments that are not direct. For example, we started working with more efficient means of transportation, such as railways, and the use of the waterway for the barges to arrive.

That will certainly improve the income and the amount without causing problems to the city.

In addition to that, we must add that these kinds of transportation are more effective not only in economic terms but also when it comes to safety and the environment.

The Minister of Transport and Public Works, Mr. Rossi, and the engineer, Mr. Diaz, President of the National Port Authority, have told us that one of the major challenges within the development plan of the port infrastructure is the budget. What’s the role that the private sector will play in the future development of the port network?

Without a question it will be a key role. If we manage to continue with these public-private projects, it is clear that the state, which is the entity in charge, must provide the necessary conditions for the private sector to enter. This is very important.

The fact that the terminals themselves are specific, adds a level of efficiency and technology that we didn’t have before.

And this is being driven by the private sector within the port system itself, which of course is owned by the state. There’s no doubt about the importance of this, because it will allow the port to continue growing.

You said that the private sector is essential, but only as long as the conditions are there. Do you think that now there are positive conditions for this development?

Well, in some cases the conditions are extremely positive. In our case, without going any further, there are private terminals, and we’re making a lot of progress in the port area.

This, of course, doesn’t mean that there’s nothing left to be done. There are issues on which the state must work in order to let more privates enter the sector.

From your point of view as an entrepreneur, what synergies are there with the Ports Administration (ANP), with Customs, and with the Ministry of Transport? What kind of communication flow is there between you?

We have a lot of communication with each other, because the mere fact of working in the port facilities and having a license for 30 years, really gives us the responsibility to keep in touch.

We must be in permanent contact with each other, searching together for the solutions to our problems. For example, we’ve solved together the access problem, both with Customs as well as the ANP, with a secure and automated truck control system, with exclusive access.

We are also realizing that no matter how many things we do in the provinces, if the railway network can’t reach and unload in the port, it really makes no sense to reactivate it.

Therefore, we are working on the bulk loads issue, so that the railway becomes operational, which is what the country needs.

The passenger railway is important too, but this is what will actually reduce costs and make it more efficient.

So, the development of the railway system is definitely a priority to maximize the potential of Uruguay.

Yes, it’s one of the many investments that have to be made to enable the railway, as I was saying, but also in order to make more use of the waterway.

Because it’s currently being used, but mostly for Palmira. We must seek investments in semi-ocean barges to bring goods by water.

Regarding the subject of the expansion of the terminal and the role that Obrinel SA has in it, with an investment of over $100 million, what is the contribution of this work for the future of the efficiency you were talking about earlier?

Obrinel is a development, a kind of project that’s very new and that didn’t exist in Montevideo. There were bulk-loading projects in the city before, but done in precarious conditions.

What Obrinel is doing nowadays is building a state-of-the-art terminal for receiving goods, warehousing, packaging, and maintenance of such goods to load them onto the ships.

All this is done in a special dock, to avoid the usual delays one encounters in the public docks. So it is only for bulks, which means we have an extra dock.

This was developed with state-of-the-art technology and taking into consideration the environment and safety. Because there will always be business opportunities here, but you have to make your projects viable.

It’s essential to think about this, because in the future we will have to work on the safety of the processes.

For example, to avoid any damage when the trucks enter, or that the goods to be charged are in good condition, because they will be heading to another port and the client needs to sell these products in the best conditions possible.

This is why what concerns us is the development of a specialized terminal, with a dock for the loading of the ships, something that for us is essential from a productivity point of view.

So, while we may compete with Palmira at some point, at the end of the day we are more of a complement than competition, strictly speaking.

We will pick merchandise from the center-west of the country, while the coast areas belongs to Palmira without question, because of the distances.

But actually those ships that leave the Nueva Palmira Port could be loaded here and leave the country full. And that is very positive in terms of productivity.

We have the same clients, and we might actually also load some ships that come from Argentina.

That’s the reason why you need the Aguas Profundas Port, then.

I am convinced that the Aguas Profundas Port belongs to Montevideo if we carry out the necessary dredging. Sure, we might as well build another one, but I think we are closer to having the Aguas Profundas Port, because it only needs the dredging of the channel, and we can send the ships fully loaded from there.

What about the operational capacity of the Terminal?

Well, we’re now able to unload some 300 trucks per shift, that is every eight hours. We could be unloading 800 trucks per day, but I’m afraid we’re still far away from that figure.

We will also be able to store 123,000 tons, and in the future we will reach about 220,000 tons.

The ship cargo is initially approximately 1,200 tons, and then we’re going to double it and reach 2,400, plus the grain conditioning.

We had an interesting conversation with Mr. Diaz, where he gave us an in-depth overview of the entire sector. He mentioned that one of the challenges is human capital. What’s your opinion about this?

Human capital is the main thing, because you can have the best equipment but if there’s no one to handle them, then these advantages become meaningless.

We have a particular situation, because the terminal is highly automated, and that makes the job positions require an above average level of training.

That is, each job that exists on our platforms is linked to the use of technology, and this necessarily means that the person in that position must have significant training.

So, it’s a crucial combination of technology and human capital. Besides, people often feel better when handling technology, because it gives them a certain status; the job stops being perceived as a basic thing.

That’s why we’re also training people permanently, and luckily we have found the necessary human resources.

I think we, as companies, should train our people specifically for what we do, for which we have the infrastructure. It’s hard to get people who are already trained for the areas we need to cover.

It’s our job to do that, as that’s where corporate social responsibility resides, on the issue of hiring staff, what kind of people, their training, etc.

We know that Obrinel is 51% owned by the Christophersen Group and the rest by Hidrovias do Brasil. Regarding this, and thinking about the management, what level of autonomy does Obrinel have to work here in Uruguay?

Obrinel has its own policy, its own decision making process, although obviously for some things it needs authorization from the management represented by these two companies. But it’s an autonomous corporation.

What are your priorities for the next few years? What do you think it will require more time from you concerning the management?

The problem is that the dynamics of these projects actually prevents us from explaining the scope of our work from a single point of view. You never stop working, and on many things at the same time.

There are always new challenges that one has to learn to overcome, finding efficient and practical solutions for the company to operate as it was really meant to, that is, providing the quality service the sector needs.

I think that’s what it’s about. To search for efficiency and work permanently in the sector, together with the clients and the state-owned companies, with everyone who’s involved in this.

It would be impossible to do it alone; it’s like a chain.

Therefore, as efficient your link may be, it always depends on the others. And this is the reason that compels all of us to work hard in order to maximize our productivity.

All this should allow for the final link, which is the product or service, to have a lower cost so its balance point is also lower, and that can activate marginal fields with other products, so that there’s more production for the good of the country and all of us.

These are all constant challenges, a continuous improvement. Today we have certain conditions, so that means we need to learn how to improve in order to continue being up to date.

You can’t afford to slow down in this business. That is why it’s so important to know how to switch between paradigms. That’s very important.

And it should apply to everybody, the National Ports Administration (ANP) and Customs as well, so we’re constantly in the process of adaptation and development, for mutual benefit and therefore for the whole sector.

It’s surprising to find such synergies, especially compared to other countries.

Yes, I’m talking specifically about our case here. We’re doing very well; we have an excellent relationship with the institutions.

Obviously, we have better communication with some than with others, but for reasons that are inherent to the work. For example, we have more contact with the ANP because we’re sort of working inside their house.

But we also work with Customs, the Ministry, the Municipality; we’re all involved in this project.

Within the Uruguayan culture, which strategic plans are your favorite?

What a question!

It may be easier if you compare it with other countries.

I think the fact that they gave continuity to their state policies is a true milestone. It happened with the wood sector, for example. Wood production has a 30-year process.

Everyone now can notice what’s happening with the pulp mills, but it actually began 30 years ago. So the fact that they gave continuity to the state policies, and improved them, is crucial.

Of course we can’t really project in the long-term nowadays. Now it’s necessary to have a more short-term perspective, because the world is no longer what is used to be and changes are more dynamic.

So that’s something you think could be modified.

Yes, you can’t spend your whole life going from meeting to meeting, in order to make constant new decisions. But it’s important to be open-minded about interesting possibilities.

How do you see Uruguay’s geo-strategic and commercial positioning at the international level?

I think Uruguay is doing things right. Maybe not as many people would like, but I think the effort is being made. They have secured many agreements, and were able to find alternatives in a complicated context, with Argentina and Brazil, so they’re not dragged down by the effects of neighboring economies. Both economically and politically it has worked, and in trade as well.

This must continue, and it’s important to bet on that continuity to avoid feeling the impact. Countries must be open to export.

Another aspect we haven’t talked about, and one about we must work very hard to achieve, is the level of professionalism of companies and individuals, and place a lot of importance in certifications, at least in our activity.

For example, Obrinel will have the MPB3 certification, which is related to handling food. It’s essential to go through those processes.

We must generate projects that give confidence to the world, to the extent that if there’s a ship from Obrinel or from any terminal in Uruguay, people know that it has controlled goods.

This quality will be good for the country and also for our clients. We must work hard on these processes; we have standards to meet and a trust to build in the world about the quality of the work we do in Uruguay.

We can see that kind of fellowship when it comes to the meat sector.

Exactly. That’s great, and it’s not just about investment. That’s one aspect, the rest is up to the people’s culture.

What are you doing at Obrinel regarding that issue?

We will do the GMB, and we’re also working on the handling processes because we have some degree of automation. For us it’s easier because we were born that way.

But for a company that already has a history, it becomes more difficult because it must adapt to those structural changes.

We are working hard for that, because it’s essential that the image of Uruguay is of the utmost professionalism.

That’s something that makes Uruguay stand out, because countries today are international brands, and Uruguay has its own thing to show to the world. And being between two giants like Argentina and Brazil, maybe professionalism could be a good way to stand out. The way to achieve this is through entrepreneurship, don’t you think?

Yes, I think that companies play an important role, but I also think that the government should create their own professional structures in the same way, otherwise there’s no interlocutor and that’s when the problems start.

You might be brilliant as a businessman, but if you do not have a valid interlocutor in the state administration who can work beside you, to the best of your abilities and with the same level of professionalism, then everything tends to slow down, because it takes time until we can all achieve an actual understanding of business projects.

And what would you say was your biggest challenge in these last four and a half years?

To be able to coexist within the port facilities where there are many different players, private and public, which are all constantly in touch with each other. We’re working side by side.

And what was the greatest satisfaction for this project, which after more than four years already has become renowned?

I think the most satisfying thing is that everything we talked about, actually came true. I mean, you can see for yourself that what we’re doing here is actually state-of-the-art.

In the ports and terminals sector, whoever works with the latest technology will continue to be innovative and have the most modern equipment and facilities.

That’s what we’re doing here, and everybody is really happy about it because we can actually verify everything we’re accomplishing in this regard.

Also having worked with the Port Administration, having our own access, our own scales, achieving the automated system with code readers that allow the truck drivers to stay on the vehicle.

We’re talking about an entire automated process that was actually unconceivable not long ago. So when you look back you can appreciate the scope of what we have accomplished.

For that, there were certain things to modify, like the customs systems and the internal procedures of the ANP, but people worked hard and very professionally, and it was all achieved.

Even though we’re not fully operational yet we’re already finishing those processes.

The most important thing here is to show that, with these projects, we’re creating efficiency without losing security. We need our processes to be safe and efficient.

The current technology provides us with the necessary tools to achieve this and at a very affordable cost, unlike what it used to be in the past. Technology is accessible nowadays.

In that sense, the institutions should work at this level as well, thinking about their procedures and about the improvement they could achieve by applying the latest technologies.

Are you competing with the United States?

Not really. We produce the same things and go to the same destinations. I’m talking about the grains sector of course.

There are very few grain producing countries. It is very unusual to sell grains to the United States or vice versa, so there is no direct business relationship in that respect. That’s what I meant.

Sure. But in the end, technology makes everything more competitive. Because one thinks of the United States and thinks about the best technology, the best security, and a number of features we don’t necessarily associate with our region here.

Yes, exactly, those of us who are in this business have learned a lot from the United States. They have many years of experience and really know how to do their job.

A big portion of the equipment you will see in our terminals was purchased in the United States.

But to be competitive is really about the whole picture. It’s about human capital, the investment, the certifications. It all adds up to make this work. It’s global, as I’ve mentioned before.

Also, we’ll be competing with ports and terminals around the world that are also highly competitive, so we must achieve this. There’s no other possibility.

We were talking about the country brand, the ability of every country to develop itself as a brand. What do you think Obrinel can contribute to Uruguay as a brand?

The fact that we can send ships certified by us and internationally, departing from Uruguay, when the buyers receive a product that comes from this country.

I mean, I don’t think they’ll see it as something that has departed from Uruguay, rather Obrinel. The ships are departing from the Port of Montevideo.

So our contribution is very significant, and if we help the country, the country will help us.

It is very difficult for a single company to survive in a country that’s immersed in an unfavorable context.

You seem to be very enthusiastic about this. What is it that motivates you as a person?

Challenges, and my family. You work for yourself, but also for your family, to fulfill their dreams and goals. Besides, the fact of carrying out these challenges in the best way possible, doing things right, is the main thing. That’s what gives me enthusiasm.

You get better and better at your job. I’ve built several plants, and each one I build I like better than the last one.

It also depends on who you are, really. I’m a positive person because that’s just who I am. That’s my personality, and my mood is based on feeling well and happy.

Of course I have problems, like everybody else does. But to me, this is about achieving the challenges I set for myself, and I think the work we’re doing here is fantastic, and I’ve been here from the very beginning which makes me very happy.