(Adds details, background)
By Ana Mano and Flavia Bohone
SAO PAULO, March 9 Logistics company Santos
Brasil Participações SA has confirmed the termination
of a contract to move containers for the ESA consortium of
shipowners at the port of Santos effective May 1, according to a
statement sent to Reuters on Thursday.
Santos Brasil, the largest cargo operator in the country,
lost the ESA contract to Grupo Libra, the second largest,
according to two sources briefed on the matter.
Grupo Libra declined to comment. Santos Brasil said the
termination of the contract was "a normal market event."
Santos Brasil hares closed down 4.7 percent at 2.41 reais,
the steepest daily decline in more than a month, after having
fallen by more than 7 percent following the Reuters report.
With Thursday's drop, the stock reversed earlier
year-to-date gains and is now down 0.8 percent since the start
of the year.
The termination of the contract signals growing competition
at Santos, Latin America's largest port, as logistics operators
scramble in the face of a harsh economic downtown.
Libra's new ESA contract will entail the rehiring of
personnel to handle the additional cargo, one of the sources
said on condition of anonymity because the person is not
authorized to speak in public.
Libra had laid off workers amid Brazil's harshest recession
on record during the past two years.
Another source briefed on the matter said Libra's new
contract involves 150,000 containers per year at Santos. This is
equivalent to roughly 16 percent of Santos Brasil's entire
container movement at the country's busiest port in 2016,
according to public data.
Santos Brasil said shipowners in the ESA consortium include
shipowners such as Cosco Shipping Holdings Co Ltd
, Evergreen Marine Corp, Hapag-Lloyd AG
and Hamburg Süd, among others.
(Reporting by Ana Mano and Flavia Bohone; editing by Jonathan