Global shipping firm bets on Paraguay

Fabián Sesto, President of Imperial Shipping Paraguay

Fabián Sesto, President of Imperial Shipping Paraguay, talks to Leading Edge about the company’s decision to invest in Paraguay




Leading Edge (LE): What led Imperial to invest in Paraguay?
Fabián Sesto (FS): Until fairly recently, Paraguay was either little known on the world stage or that which was known about it was not entirely positive. What Imperial sees in Paraguay is an economy that has shown years of continued stability and growth. We saw clear signs that the country was different; that it was better than the general view held of it. Its public institutions have also always been very respectful of private enterprise. There are many opportunities for growth in South America.

LE: How can the country get the most out of its Hidrovía waterway project?
FS: The country can and must continue to grow. In order for that to happen, the government has to provide the necessary tools. What is now evident is that there is a clear plan and course of action laid out for the country. One example of this are the agreements for surveying and then dredging part of the Paraguay River.
Our idea is to try and copy our European model with regards to logistics, storage, preassembly and redistribution, covering our clients’ logistical needs from point to point. By this I mean dry loads, liquids, general loads, food, car parts, fuels and gas, and so on. The most critical factor is that the Hidrovía Agreement should act as an agreement for all five countries, which is currently not the case. Argentina’s previous government placed many restrictions on the Paraguayan fleet, in terms of both ports and shipping. This also affected Uruguay and ended up increasing production costs.

The authorities are ready to offer solutions to any pitfalls which may be encountered by those investors considered beneficial to the country

The canal and its dredging must be optimised. This requires intelligent investment because it is a means of reducing costs. If a country achieves greater year-round load capacity, it can offer a better freight at a lower cost to producers. These producers will then have the confidence to increase their production and this will enable us to grow as they do.
The third point is to adapt the current fleet to international standard regulations. The government is now in the process of obtaining certification for the Paraguayan fleet (the third-largest river fleet in the world with nearly three thousand vessels) certified by International Association of Classification Societies (IACS). All producers expect their cargo to reach its destination on time and in perfect condition, which is why it is very important for the Paraguayan fleet to be operating at the necessary level. This classification will guarantee quality standards for vessels that will provide world-class logistics, ensuring that merchandise is suitably stored and delivered on time and in perfect condition. This is crucial for ensuring growth in the sector, and as a result, in the region.

LE: What do you think are the determining factors when it comes to investing in Paraguay?

FS: One requirement for long-term deals needing intensive capital investment, as is the case here, is that there is clear planning and direction at government level. That means that the authorities are not only thinking about what the country’s needs will be during their time in power, but that they are also building the foundations for the long term. This entails creating a strategic plan for future development, with institutional consensus in order to guarantee its continuity beyond the current government. We now believe this to be the case in Paraguay, and it is reflected in our dealings with the heads of different government institutions.
The country’s recent past serves as evidence of an enviable stability and respect for private investment. Another important point is transparency. Nowadays any problem or irregularity can be openly discussed with the government, which does its utmost to solve it immediately. The authorities are ready to listen to problems and offer solutions to any pitfalls which may be encountered by investors. That creates confidence when deciding how and where to invest.