Shanghai, São Paulo deepening commercial and investment ties

Shanghai and São Paulo are strengthening their commercial relations and investment promotions.

On November 16, an event hosted by the Shanghai municipal government and the Bank of China's Shanghai branch in São Paulo brought together Brazilian and Chinese businesspeople and authorities, and saw the signing of several MOUs between companies from the two countries.

“Despite being an event between the Shanghai government and the city of São Paulo, we understand that Shanghai's demands and interests are the same as those of China. And, on our side, São Paulo city’s are with the government of the state of São Paulo,” Felício Ramuth, the state’s deputy governor, told BNamericas at the event.

São Paulo state is offering concessions and privatizations worth US$4bn involving three projects that could interest Chinese firms: a batch of 232km of road concessions, the São Paulo-Campinas intercity train and the privatization of water and energy company EMAE.

Ramuth said Chinese companies are interested in, at least, the intercity train and EMAE. China Three Gorges (CTG) is one of the shareholders of EDP Brasil, which would be interested mainly in the assets of EMAE.

“There are already consultations in relation to EMAE, as well as the intercity train. The EMAE notice is not yet ready for public consultation. But InvestSP has also received interest in this project,” Ramuth said.

Investment promotion agency InvestSP was a supporter of the event in São Paulo. 

The notice for the concession of the batch of state highways is ready but has not yet been published. The tender is due for March 2024.

The privatization of EMAE is slated for February 2024, ahead of the privatization of water and waste company Sabesp, according to Ramuth, who also heads the state's privatization area.

PORTFOLIO

In addition to these, the state has another 17 PPPs and concessions in the portfolio, Ramuth told BNamericas, including technology parks and eight river and sea ferry crossing operations.

According to the vice governor, the operation of the ferries costs the state 280mn reais (US$57.2mn) per year.

He said that there is a possibility that the ferry concessions also include hybrid or electric vessels, as 60% of the cost of these operations refers to diesel.

One of the next projects "to be modeled" is the intercity train stretch between São Paulo and Sorocaba, he said. “It’s a broad portfolio of projects. And each project is at a different stage.”

ENERGY AND ELECTRIC

Energy and electrical projects, in particular, are viewed with great interest by Chinese suppliers.

“China sees Brazil as a great partner and Brazil sees China as a great partner. This event deepens this relationship even further,” Marcos Amaral, Latin America commercial director for Shanghai-based Shemar, told BNamericas during the event.

Shemar Latam is a provider of solutions for energy transmission, transformation and distribution systems. Among the company's main customers in Brazil are the country's largest electrical transmission players, such as Taesa, CYMI, Neoenergia and ISA CTEEP.

During the event, Shemar signed an MOU with CIMY, Neoenergia and ISA to formalize contracts won with these companies in tenders held last year, according to Amaral.

“Shemar won a lot at an auction in 2021. And we are investing 400mn reais in Brazil in lot 2, starting construction in the second half of next year,” said Amaral.

Among the next projects, Shemar is targeting a transmission line auction in December, in addition to other tenders next year.

"We see enormous growth potential in Brazil. There are two giant auctions ahead [the second of 2023 in December and the first of 2024 in June], and we aim to reach 100% of the market. We’re investing US$80mn to operate and maintain a lot we won in an auction held by Aneel in 2021," José Tamayo, the company's CEO for Spain, Portugal and Latin America, told BNamericas last month.

MOUs

Other MOUs signed at the event includ an agreement between Lenovo Research Shanghai and Amazonia Lab Brasil. 

Amazonia Lab is an innovation hub to connect companies, governments and non-profit entities in the Brazilian Amazon.

Also, in the innovation and technology sector, startup association ABStartups signed an MOU with Venture Cup China, and with Crosscommerce Store Brasil; and Brazilian nanotech startup Krilltech signed an agreement with the Chengdu Institute of Biology.

Agreements were also signed between J&F Mineração, Baosteel do Brasil and Comexport.