BRASA Shipyard could close its doors if ANP approves end of local content in LIBRA

April 25, 2017

By Daniel Fraiha (

The discussion about the waiver request for the Libra FPSO was intense at the public hearing promoted by the ANP and the industrial sector has been waiting with great expectation for the result to be released by the agency. Several companies and institutions, concerned about the future of the economy, industry and jobs in the country, made contributions to the process, mostly against the request made by Petrobrás and its partners in the Libra consortium.

Petronotícias begins a series of Publications, as of Tuesday (25), with the highlights of some letters sent by industry to the ANP.

The first one concerns the future of the Brasa Shipyard, a joint venture formed between the Synergy Group and the Dutch SBM Offshore, which threatens to close its doors later this year if the 100% waiver is granted to the FPSO of Libra, which could make for a “catastrophic scenario”, in the words of the shipyard’s executive manager, Marcus Vinicius Cirio, who signs the document.

“If local content is terminated from contractual obligations, in the short term we will lose our ability to restart operations effectively. As a result, we estimate that before the end of the year the cash reserves will have been consumed, forcing us to close the doors of the Brasa Shipyard completely, losing all the experience acquired “, affirms the executive in the letter to the ANP.

Part of this loss can already be seen in terms of employment, due to the lack of new orders in the national scenario, since the company has cureently only 400 employees, but estimates to have trained and employed a total of 8 thousand employees during the last years, when it delivered 25 thousand tons of modules and made the integration and the commissioning of 3 large FPSOs.

Another important factor to consider is the financial impact on the supply chain that the loss of a shipyard such as Brasa can generate, taking into account that since its inception in 2012, it has already made purchases in the domestic market totaling R$ 1.38 billion, in addition to having paid R$ 50 million in taxes. In the accounts of the company, all its activities in these few years of existence represented the generation of 37 thousand direct and indirect jobs in the country. “Our performance is on the same levels as our international competitors,” points out Cirio in the text, noting that the projects were delivered with 99% of national labor.

The Brasa document recognizes that there is still a long way for all Brazilian industry to become competitive, but emphasizes the importance of local content as the basis for the development, sustainability and competitiveness of the industry. In addition, he argues that Brazilian authorities, including state authorities, promote competitiveness by reducing additional taxes and charges, “because national production is currently more taxed than that of international competitors.”

The shipyard notes that it considers the 25% local content index stipulated by the government in the last decision on the subject to be low, considering that Brasa has achieved an average of 35% local content in recent projects, and also argues that “severe penalties “Be applied in case of noncompliance,” to such a level that it is economically unfeasible to circumvent Brazilian rules and contractual commitments, preventing some countries with a dumping policy from absorbing this cost and reducing Brazilian jobs. ”

The letter reiterates the capacity of the shipyard to attend to the sector and emphasizes that it has demonstrated this by delivering on time and with quality three large FPSOs for Petrobras, doing the integration and the commissioning in Brazil, claiming that it does not therefore understand the Integration and commissioning will be done outside the country, if modules are made internally.

“We can not be favorable to the waiver for local content at 0%, because we understand that there are other ways to promote competitiveness, without the loss and loss of investments and results achieved,” concludes Cirio in the text.

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