BRAZIL (From news reports) -- The Chilean pulp and paper producer CMPC is set to kick off an investment of 1.5 billion (bn) reais (US$280 million) for the construction of a port terminal in the Brazilian state of Rio Grande do Sul.

The construction of the port terminal is part of a company program called Projeto Natureza, which includes the construction of a new pulp mill in Barra do Ribeiro, with a total investment of more than 27bn reais.

The terminal, related to a 25-year concession contract, will include two berths for ship docking, two berths for barges and a warehouse with a static capacity of 194.000t of pulp, according to the state government, in a statement.

The construction of the terminal will be carried out through a joint venture between CMPC and Neltume Ports.

CMPC's investment is part of a growing movement of investments in Brazil's port infrastructure, amid companies' increasing needs to reduce logistics costs in the face of a more challenging foreign trade scenario.

"We are living in an international environment marked by growing trade tensions and, to mitigate such effects, we need to ensure competitiveness for our companies, and one of the essential tasks for this is to invest in infrastructure to reduce exporters' logistics costs," said José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), to BNamericas.

The improvement in port infrastructure also depends on the expectation of expanding activity.

Brazil is expected to record a trade surplus this year of US$76bn, compared to US$68bn recorded in 2025, according to AEB projections.

In addition, in the long term, Brazilian foreign trade activity tends to accelerate amid the free trade agreement recently signed between Mercosur, a trade bloc made up of Argentina, Brazil, Paraguay and Uruguay, and the European Union, as well as other agreements.

"The trend is that, once we have progress on the trade agreement between Mercosur and the European Union, other similar agreements that were already under negotiation will now move forward, such as, for example, with Canada, with the United Kingdom, with Japan, among others," said Welber Barral, former foreign trade secretary of the Brazilian government, to BNamericas.

With such agreements, port projects and contracts are proliferating. Currently, the Brazilian government is working on structuring the auction for the lease of the Tecon 10 container terminal in the port of Santos, the busiest in the country, with estimated investments of 6.45bn reais.

In parallel, the National Waterway Transportation Agency (ANTAQ) will hold the auction of four port terminals on February 26. In total, the assets are expected to generate investments of 229mn reais. The block of terminals is located in Macapá (AP), Natal (RN), Porto Alegre (RS) and Recife (PE). These ports concentrate the handling of grains, bulk cargo, minerals and passengers.