It is absurd: it means holding back Tenerife’s own development to yield to pressure from Las Palmas. The industrial gases and port supply sector in the Canary Islands has never been a tranquil environment. When a multinational with the resources of Nippon Gases—the Spanish subsidiary of Japan’s Nippon Sanso Holdings, linked to the Mitsubishi conglomerate—decides to restructure its subsidiary in Santa Cruz de Tenerife to compete in a traditionally closed market, the local ecosystem reacts immediately. It is a direct parallel with what happened in naval repair between Hidramar and Tenerife Shipyards: the arrival of an outside competitor in the Gran Canaria stronghold automatically generates friction with the dominant castes. The project has been blocked for almost six months after an investment of €40 million so as not to disturb the Sanhedrin of Las Palmas, while in Tenerife the PP continues to play along.
Comprehensive project from Granadilla
Nippon Sanso is coming to Tenerife with a long-term vision and a plan based in Granadilla de Abona for the production, manufacture, packaging, storage, transport, distribution, brokerage, marketing and sale of gases for industrial, food-related and any other uses, expressly including carbon dioxide, its derivatives, by-products and mixtures. Justin Corcho, the Japanese company’s chief executive, heads the new company based in Tenerife. In his view, “Europe urgently needs to speed up permitting, simplify administrative burdens and shorten processing times” because “today, energy and industrial projects that could improve competitiveness take years to approve, compared with much more agile processes in the US or Asia. Speed in permitting—for renewables, electrical infrastructure, renewable gases or plant modernization—becomes a competitive factor in its own right.”
Energy costs and pressure in Europe
He explains that “Europe, by contrast, bears higher costs arising from the Emissions Trading System, or ETS, higher energy taxation and dependence on imported raw materials. All of this puts pressure on the competitiveness of industries exposed to global trade, especially those competing directly with regions where energy is more affordable and stable.”
Global strength versus the island blockade
Unlike an independent local distributor, Nippon Gases operates in another global league. With a 12% share of the European market and its own logistics network, the company has sufficient backing to withstand the commercial pressure generated from the Port of Tenerife. If the Japanese multinational decides to use its Tenerife subsidiary as a logistical spearhead to meet the Canary Islands’ naval and repair demand, the usual obstacles created by local pressure groups will not be enough to stop its entry. The real battle will be fought over the support, volume and logistics costs that it can build from Tenerife to break the blockade in Las Palmas.
The influence network from Gran Canaria in Tenerife
The obstacle facing the Japanese company comes from Las Palmas, where pressure is being applied to prevent a decline in local GDP by blocking any external industrial advance. In this scenario, the rival Nippon Gases must overcome is Carburos Metálicos, a subsidiary of US-based Air Products. The North American multinational not only has a long-established physical presence beside the docks and in Salinetas, but is also fully integrated into the province’s business power network. Carburos enjoys the support of Astican’s employers’ association—the Greek Laskaridis group—is part of the Canary Islands Maritime Cluster, an entity that receives public funding, and shares alliances within Asinca, the industrial employers’ association where Las Palmas’ major beverage and soft-drink manufacturers are aligned.
In the archipelago’s business culture, where port logistics and the industrial supply chain have historically been divided among a handful of deeply established groups, the arrival of a competitor from Tenerife would trigger a counterattack on several fronts. While Carburos Metálicos enjoys a consolidated physical position in the port-influence areas and the tactical advantage of its connection to Telde, any advance by Nippon Gases will have to overcome bureaucratic obstacles, inter-island transport authorizations for dangerous goods and storage space. The local industrial and port lobby will not facilitate the granting of plots or cargo-handling permits that would allow the Tenerife subsidiary to operate freely at the docks, even in Tenerife.
Contract protection, pricing and pressure from Asinca
The status quo at the Port of La Luz has traditionally been defended by blocking major customers before they hear outside offers. The aim is to prevent shipyards, shipping agents and the manufacturing industry from trying the alternative arriving from Tenerife. The case of the halted plant in Telde and the rapid zero-rate tax exemption under the Canary Islands’ AIEM regime decreed by the regional government for gas imports were justified under the protection of a “strategic sector.” Alignment between the regional government and the industrial lobby makes the regulatory and media environment hostile to any operator without local roots seeking to break the current supply-chain hegemony.
The article Are they also going to blacklist Nippon Sanso in Tenerife for threatening port business in Las Palmas? was first published on canarymaritime.com.
