Sergio Machado revived Brazilian Industry from 200 to 50,000 employees

Shipping Industry

Post 2000, there was a keen focus shift towards reviving the Brazilian Shipping Industry. Petrobras was burdened with the target of using at least 70 per cent local content for its maritime needs. For upgrades and expansion, the shipyards, which also build oil platforms for Petrobras, had access to a new Merchant Marine Fund, with contributions from the BNDES, the country’s development bank. At the helm of this revival was Sergio Machado.

In the 1970s, Brazil had the second-largest industrial fleet in the world. But global oil crisis, high inflation and economic instability caused the industry to fall into shambles. By 2000, the entire sector had just about 200 workers.

  

SergioMachado, who became the President of Transpetro in 2003 said, “In Brazil, we don’t have the choice of having ships or not. We have the choice as to whether or not they will be ours,”

Machado emphasized on avoiding the recurrence of the so-called “Dutch Disease” following the experience with Netherlands in 1960s that crippled non-oil related sectors of Brazilian economy.

In 2008, Transpetro spent $16bn on maritime investments. Of the 49 ships to be built under the first two phases of Promef, 41 have already been contracted, and eight are still in the final phases of tenders to private companies. The contracts awarded so far total $4.4bn. In some cases, companies began building the shipyards and the ships at the same time.

Mr, Sergio Machado says his goal is not to build ships and platforms in Brazil “at any cost”, but to create an industry which, in the long term, would be globally competitive.

“It’s important to have better planning to avoid the situation in the 1970s and 1980s, with the construction of many shipyards without long-term demand,” he says.

For Sergio Machado, politics was an exclusive lover

When Sergio Machado joined politics in 1986, he gave up all his former titles. Sergio owned Vilejack jeans factory and a school, was the president of Ceará Industrial Center (CIC), owned TV Jangadeiro (SBT network), Fortaleza, and the FM Radio Education of Crateús (EC)  but gave up all and moved business to his children. For him, politics was an ‘exclusive lover’ which demanded his full attention.

Machado was 16 when he accompanied his father in exile in France. This was the time when he learnt the most intellectual lesson of his life. Sergio Machado learnt from his father that power was transient. His inclination towards politics was always very strong. Machado studied administration at the Getulio Vargas Foundation in Rio and participated in the student movement and the march of 100,000 in 1968.

In his political career, he never took handouts but earned his way up. The CIC group had Tasso Jereissati as protagonist and entered politics with a modern discourse, in contrast to the existing policy of the State Colonels. Machado became Interior Minister in the first term of Tasso, but it turned away when Ciro Gomes occupied space in the party, chosen as candidate for governor of Ceará. Machado continued in the PSDB and was elected congressman in 1990. Four years later competed in and won election to the Senate.
Being the man responsible for resuscitating Brazilian Naval Industry, Jose Sergio de Oliveira Machado rarely used to go out of Transpetro before 23 hours. He would work religiously and was often sighted having his lunch in the evening, spending all afternoon handling the tasks
No wonder, Machado made the cover of British magazine ‘Fairplay’ under the ‘Virtual Reality’ title.  He also appeared on the list of 100 most powerful person of the ship industry. He was placed 65th, just behind the president of Vale, Roger Agnelli and 16 positions ahead of Eike Batista.

SERGIO MACHADO of TRANSPETRO, THE R $ 8.3 BILLION MAN

JOSE SERGIO DE OLIVEIRA MACHADO of TRANSPETRO

Listening to the classical music on his ipod, Machado used to work 14-16 hours daily in his office. Jose Sergio de Oliveira Machado, President of  Transpetro was passionate about two things; his work and music. He had an eclectic taste in music, ranging from classical to Nat King Cole and Frank Sinatra the hinterland. The sound of his preferred music reaching his ears made him work more efficiently.

The president of Petrobras carrier used to monitor five 32-inch flat screens in his office, in real time, the flow of gas pipelines and 3.6 million barrels of oil in the company’s pipeline, the construction of the ship Celso Furtado, and the position of the vessels of the company worldwide. 

Among his responsibilities, Machado used to run the Program for Modernization and Expansion of the Fleet (Promef). It is a program of R $ 8.3 billion budget that aims to order 49 new ships to be built in Brazil. 

Sergio Machado believed in the philosophy that the oil could never be a curse but a gift for transformation. No country is sovereign without its own merchant fleet: 80% of world trade and 95% of the country’s is done by ships. Brazil spends annually $ 16 billion (R $ 28.1 billion) - Petrobras alone spends $ 2 billion (US $ 3.5 billion).

Transpetro made studies on the bottlenecks to make the fragile marine industry in Brazil one of the  most competitive ones in the world. The beginning was difficult.

The biggest challenge for Sergio Machade was to create a sustainable industry. He went to Korea, Japan, and what he saw was too huge and overwhelming.  For Machado, ships in Brazil by Promef, offered great strategic advantages in spite of being 3 % more expensive for it offered a great economic benefit

Sergio Machado launches the first Promef Ship built in Rio de Janeiro

Sergio Machado launches the first Promef Ship built in Rio de Janeiro

Under the aegis of Sergio Machado, Transpetro launched a ship at the Mauá Shipyard.  This was the first ship built in the state of Rio de Janeiro for the Program for Modernization and Expansion of the Fleet (Promef). The launch was attended by Governor Sérgio Cabral, the Transport Minister Paulo Sergio Passos, the acting president of Petrobras, Grace Foster, and the president of Transpetro,Sergio Machado. The event marked the revamp of shipbuilding industry in the country as one of the economic vocations.

At a news conference on the roof of Windsor Guanabara Hotel, Center of Rio de Janeiro, the president of Transpetro, Jose Sergio de Oliveira Machado, said the ship would carry the name ‘Celso Furtado’, named after the economist who created the SUDENE and released the latest industrial development cycle of the country. It is a vessel for the transportation of light oil products with a capacity of 48,300 dwt and 183 meters long.
The state of Rio, largest and most traditional naval hub of the country, already has 16 vessels ordered by Promef, with R $ 2.25 billion in investments. The program will create at least 50,000 jobs in the state, 10 thousand direct and 40 thousand indirect jobs.

The Mauá Shipyard which will build four Promef product tankers, is located in Ponta D'Areia, in Niterói, the region where the Brazilian shipbuilding industry started in the nineteenth century at the hands of the Baron of Mauá. President Sergio Machado at the ceremony said that a circle was completed.  He said that the restructuring of Brazilian Naval Industry was initiated at the same spot from where the industry began.
The ship Celso Furtado is the first commissioned to a Rio de Janeiro shipyard by Petrobras to be thrown overboard, 23 years after the last order. The latter had been the Livramento, completed in 1997 by Eisa Shipyard. The vessel took 10 years to complete, amid a severe industry crisis. A Brazilian naval industry, which had been the world’s second largest manufacturer in the 1970s, virtually disappeared from radar from the 1980s.

Sérgio Machado, the workaholic who strengthened Brazilian Shipping Industry

Once the owner of Vilejack jeans factory and a school, Sergio Machado was the man who left it all to build a better shipping industry in Brazil.  The president of Transpetro, Sergio Machado, was the president of the Ceará Industrial Center (CIC) just before entering politics in 1986. He disposed off all other business responsibilities to his children and became an exclusive lover of politics.
 Son of Machado Bridge, Minister of Transportation and Public Works of João Goulart at the time of the military coup of 1964, Machado was 16 when he accompanied his father in exile in France. This was the time when his father taught him a great lesson; a lesson which stayed by Sergio all through his life, that power was transient. Sergio was wise enough to realize that power could never be stores forever. So he decided that as long as he holds power to do something, he will do all he can to make people’s lives better.

Sérgio Machado, the workaholic who strengthened Brazilian Shipping Industry

Machado achieved a milestone when his first ship Suezmax tanker was launched.
"I cried the whole world. It was not easy to get here. That's what excites me to know that we are transforming lives, generate opportunities. That is the oxygen that feeds me.”
These were his marvelous words.  The twinkle in his eyes was priceless.
When started in Transpetro, to meet the business, Sérgio Machado traveled the world visiting shipyards, mainly in Asia. He is described by officials as a workaholic, enough to start meeting at 22 hours and would sleep five hours a night. Such was his passion towards his work. He was a visionary who is credited with the revival of Brazilian Naval Industry.

Sergio Machado, man who revived Brazilian naval industry

“In each of these great ship will have a piece of mine. I’m proud of that, President Lula. I want to thank everyone who is giving us the opportunity to contribute to this project. ” were the words of great Jose Sergio de Oliveira Machado, the man responsible for the resurrection of naval industry in Brazil.

Sergio’s words had an impact on President Luiz Inacio Lula da Silva and other authorities and guess at the event. Sergio regarded steel cutting as the resumption of naval industry in Brazil. What had not been done since past 20 years was being forged . Leading from the front was Transpetro. The constructed ships provided more that 5000 direct jobs and 20,000 allied work options along with the creation of training centers for hand labors. Sergio Machado made a huge contribution to the employability and economy of the country.

It was not at all easy; to reach where the industry had reached. Workers had to stand in long queues, entrepreneurs risked their investments. It was not easy for Petrobras and Transpetro as well, which had to take risks and risk various issues.

A key step in the revitalization of the Brazilian shipbuilding industry was taken with the creation in 2004 of Promef, led by the president Jose Sergio de Oliveira Machado that with determination, tenacity and bravery, put order ships in domestic shipyards. The Program for Modernization and Expansion of the Fleet was a major boost for the green and yellow flag ships could cross the seas with the same vigor of the past.

In the first phase of Promef, 26 vessels were built, ten of them in Pernambuco. The other 16 ships of this phase were built in Rio de Janeiro and Santa Catarina. The Promef is therefore responsible for decentralizing the shipping industry and thus redistribute professional knowledge, employment, income and wealth in Brazil.

Sergio Machado hopeful Shipbuilding may invest up to US $ 40 billion

Sergio Machado hopeful Shipbuilding may invest up to US $ 40 billion

Platforms, rigs, tankers and support vessels in billions orders from Petrobras can make Brazil a mecca for the shipping industry investments in the coming years. The values reached US $ 17 billion initially (between 2009 and 2010) and may go to $ 40 billion by 2012. The Brazilian market already has the fifth largest order book in the world, with developments for construction of up to 17 shipyards, according to industry sources.

Most projects, however, are waiting tender to carry out the investments alone range from $ 100 million to $ 1 billion. President of Transpetro Jose Sergio de Oliveira Machado says that first there was a boom of resurgence of  Brazilian naval industry, after 20 years without orders followed by virtual shipyard, now a reality, and investments in modernization and expansion . In addition to 26 new tankers - of which 18 are trading and eight will be tendered within 60 days the envelopes with the proposals for the construction of eight hulls in series to vessels- platform that will operate in Tupi.

The Rio government is mediating at least two large trades. In addition to having encouraged the construction of four shipyards in Industrial Complex Stuck Bar in the Norte Fluminense, the government wants to attract investors to an area in Itaguai, in the southern state, the area near the port.

Because of its length on the banks of Guanabara Bay and its quiet, the area could host the simultaneous construction of up to two platforms FPSO-vessels (production and storage of oil), the type being ordered to Tupi. 

The idea is to repeat in Rio lease of a dry dock custom built by Petrobras in Rio Grande do Sul, and is offered in tenders for companies interested in the work. The area belongs to the Rio Iesa groups and Banco Fator.

Jose Sergio de Oliveira Machado participated in the 24th Congress of Finance Executives

Sergio Machado, President, Transpetro participated in the 

24th Congress of Finance Executives

The president of Transpetro, Jose Sergio de Oliveira Machado, participated in the 24th National Finance Executives Congress (Conef). Here, amidst various authorities, executives and businessmen, Sergio highlighted about the factors that were paramount for the growth of oil and gas sector. He emphasized that the pre-salt discoveries presented as extremely beneficial for the gas and oil sector in Brazil. He elaborated that the shipping industry in Brazil had tremendous unearthed potential. This was in context with the huge demand for investment, rigs, vessels, support and platforms in the shipping sector. Sergio Machado believed that all these offered great opportunity for revenue generation in Brazil. 

Sergio Machado firmly opined that it was prerequisite for Brazil to be competitive to earn its actual worth at the global belvedere. Talking more about the development, Machado exalted about the Naval Industry and stressed on the importance of Transpetro and its fleet expansion program titled Promef.Promef ordered 49 vessels that worked as the shot in the arm for the sector.

Machado delved a little on the details concerning Promef. He believed that the fleet needed an upgrade to incorporate modernizatio9n and expansion of the fleet. There were 3 vessels, waiting to receive the finishing touch while 9 other ships and 3 trains were fairly under construction. There is not even an ounce of doubt that Sergio Machado was the man who breathed life into the dormant shipping industry in Brazil.

Jose Sergio de Oliveira Machado addressed investors on renaissance of the Brazilian Naval Industry

In a lecture to more than 150 businessmen and American and Brazilian investors, gathered at the Yacht Club of New York, Jose Sergio de Oliveira Machado said a very powerful statement which in its wake holds a very bright future for Brazil. Mr. Sergio Machado had said, “The world that will emerge from this crisis is another. And in this map, Brazil has a privileged place."
Invited by the Brazil-United States Chamber of Commerce to talk about the renaissance of the Brazilian Naval Industry, Sergio Machado said that an emerging country like Brazil, which has adjusted its economy and prepared for a rapid development phase on solid foundations, has all the conditions to emerge stronger from the global crisis.
According to the president of Transpetro, the global crisis is a great opportunity. Mr. Sergio Machado said that for those who are prepared, did homework and took some measures, the crisis opened loopholes that can be exploited. In relation to the Program for Modernization and Expansion of the Fleet, which has revived the Brazilian naval industry, resources are secured.
He added that the funding from the Merchant Marine Fund may only be used in the shipbuilding industry. Sergio Machado recalled that the Ship Program, which includes the construction of 49 large ships, came amid a large crisis in the sector. He said that few believed that the program's viability is has changed the face of the shipbuilding industry in Brazil.

Under the aegis of Jose Sergio de Oliveira Machado, Ship José Alencar launched at Mauá shipyard

It is a time of success and completion as the sea product José Alencar has been launched into Mauá Shipyard as its production has been completed. José Alencar has been thrown into the yard career sea and led to the finish dock to complete its construction.

The ship’s name is a tribute to the former vice president whose name the ship has taken. José de Alencar will be used to transport petroleum products. It can carry up to 56 million litres of fuel. It is the last ship of the series of four ship products ordered by the Program for Modernization and Expansion of the Transpetro Fleet (Promef) to Mauá Shipyard. The first, Celso Furtado, was delivered to Transpetro on 25 November and is already in operation. The other two vessels, Sérgio Buarque de Holanda and Romulus Almeida, are being finalized.

The president of Petrobras, José Sergio Gabrielli, talked about how the Brazilian naval industry development is crucial in meeting the high demand generated by the pre-salt.

The president of Transpetro, Jose Sergio de Oliveira Machado, has been thankful to the commitment of the Mauá Shipyard workers. He said that it was worth believing in the capacity of the Brazilian people. Brazil, with chance, is able to overcome any challenge and show that the country is strong. This was the Brazil that was being built that day.

The ship José Alencar is to sponsor the general manager of construction and assembly of Promef, Ana Paula dos Santos Costa.

Soon after the release of the vessel, the Mauá Shipyard held the keel beat the first ship of the series of four Panamax ordered by Promef. With 228 meters in length and capacity of 72,900 dwt, Panamax ships will be used to transport oil or dark derivatives. A series of four Panamax was hired to Estaleiro Ilha SA (EISA), which will build the vessels in Mauá.

The program has already ordered 41 ships and 20 waterway trains Brazilian shipyards, with investment of R $ 10 billion, providing the basis for the revitalization of the Brazilian shipbuilding industry. Orders allowed the opening of three new sites in Brazil - Estaleiro Atlântico Sul, STX Promar Shipyard and Rio Tiete. Eight other ships are in the final bidding stage.

Today Brazil has the fourth largest order book in the world oil and ranked fifth in the ranking of orders for ships in general. A Brazilian naval industry, which had less than 2000 workers at the turn of the century, now employs almost 60,000 people.