Private investors have laid the foundations for Asunción to become a major shipping and logistics hub at the heart of the Paraná waterway, which caters to the growing imports and exports sectors of some of South America's biggest agricultural areas. These include south Brazil, Paraguay, Uruguay and Argentina.

Local shipping companies Navemar and Compañía Marítima Paraguaya have teamed up to launch a new $40m, 19-hectare container terminal on the Paraná river 4 kilometres south of Asunción. The new terminal, called Terport Villeta, started operations in October 2018 with an initial capacity to handle some 100,000 containers a year and its sponsors are now looking for new investors to develop an adjacent 150-hectare logistics park.

“The Paraguayan distribution sector is very unorganised,” says Ricardo dos Santos, general manager at Terport. “Even big exporters of beef may have different small warehouses or processing facilities scattered around. They are very small facilities that lead to big inefficiencies in distribution and exports. We see a lot of opportunities in terms of gaining in efficiency from consolidating all these different centres in one major centre in the logistics park. The main focus of the park will be logistics, but also manufacturing for both heavy and light industries.”

Latam star

Despite major political unrest, Paraguay's economy has still outperformed other South American countries by growing at an average of 5.1% per year since 2010, against a regional average of 3.4%, according to World Bank figures. An expansion in exports has been the main driver of this growth, as total shipments of local productions abroad reached more than $9bn in 2018, from $8.7bn a year earlier, of which 59% are agribusiness related, according to central bank figures.

Paraguay is the world's fourth largest exporter of soya beans, the seventh largest meat exporter, and the largest for organic sugar. Beyond agriculture it is one of the world's largest exporters of electricity. Most of these exports are transported on the Paraná waterway northbound towards Brazil, or southbound to the port of Montevideo and Buenos Aires, and on to client countries across the globe.

Good to grow

Terport now expects the business case for the logistics park to strengthen as operations at the new container terminal gain traction.

“The Paraguayan economy is still growing steadily and for every point of GDP growth, container traffic grows by three points,” says Mr dos Santos. “Looking forward, the economy is expected to grow at about 5.5% per year for the foreseeable future, which means annual container traffic will grow at about 10% to 12%.

“Besides, there are many manufacturing facilities that are in the process of being installed locally, especially to serve the Brazilian market – raw goods from Asia come upstream along the Paraná river, get processed in Paraguay and the final product, from automotive component to clothing, is exported to Brazil.”

The country's 10/10/10 fiscal proposition may be an extra incentive for potential investors – comprising 10% corporate tax rate, 10% VAT rate and 10% individual income tax. Terport is now sounding out potential partners for the development of the logistics park as it reaches out to medium-sized logistics operators that have a focus on Latin America and plenty of experience with these sorts of projects, according to Mr dos Santos. The company wants to be in a position to start selling plots of lands within the logistics park by September 2019.