Rakennusalan mahdollisuudet Latinalaisessa Amerikassa 25.5.2010 Finpro Finpro Heta Pyhälahti Region Americas
Content Latin American countries and Construction ti sectors Reconstruction in Chile Timber Housing in Chile
Latin America / Finpro ry / 3
Americas Economies in 2008 compared to some of Finland's trading partners 300 Russia USA Brazil 200 Mexico Population (m millions) 100 50 Colombia Argentina Germany Canada Venezuela 25 Panamá Chile Czech R. Finland 0 10,000 15,000 20,000 30,000 40,000 50,000 Source: CIA World Factbook GDP/capita (USD) / 4 Finpro ry / 4
Construction Regional Comparison Total Construction Outlook: Regional Comparison CompoundAnnual Growth: 2009-2014 5
GDP growth forecast for years 2010-2011 Growth in GDP in percentage % Source: BofA Merril and Lynch Global l Research Source: World Bank Finpro 6
Stable macro economics Stock of Foreign Direct Investment at home (US $ billion) 2008 Source: CIA Fact Book, UNCTAD, Mexican Economy Ministry, Mexican Statistics Agency, Mexican Central Bank 7
Credit rankings in Latin America / Finpro ry / 8
Construction Growth in LA 2010 Construction Growth Allocation in Major Latin American Countries 9
Construction spendings Total Construction Spending by Country: Total real construction spending in Latin America is slated to grow by 2.9 % this year. 10
Federative Republic of Brazil Area: 8,511,965 km 2 Population: 199 million Capital: Brasilia Official language: Portuguese Religion: Catholic (74%) Exploiting vast natural resources and a large labor pool, it is South America's leading economic power and a regional leader. Advantages in competitiveness such as productivity, low wages, and low price level of raw materials Main industries include petrochemical, automotive, ti aeronautical, steel, agriculture, pulp and mining BRICK country Growth is largely based on foreign trade and local mass consumption Average GDP growth 2004-07 4,5%
Construction sector in Brazil Forecasts for Construction industry in Brazil 2010f 88.37 US$bn 2011f 99.58 US$bn Brazil is to be Latin America largest construction market Brazil represents 49% of Latin America in 2009 and is expected to double its volume and to represent 58% by 2020 Non-residential and infrastructure construction growth is high Brazil infrastructure will further remain high as a result of World Cup 2014, Summer Olympics 2016 Pertrobras offshore investments
Mexico Construction and Infrastructure The total infrastructure and construction sector in Mexico in 2010 is around 42 Billion USD Mexico has a deficit of 6 million houses The private sector estimates t to build 1 million new homes each year Complete villages, consisting of 500-7000 apartments with infra are constructed The infrastructure market in 2010 will be 20 Billion USD (50 % roads, 40 % railways, 5 % ports and 5 % airports) Energy and utilities infrastructure investment is around 5 Billion USD (Gas 39%, oil 20%, coal 20%, hydro 12% and nuclear 4%, renewable energy 3%) Water and sanitation infrastructure is around 3 Billion USD
Colombia Construction and Infrastructure The total infrastructure and construction sector in Colombia in 2010 is around 25 Billion USD Road investments in 2010 are around 4 Billion USD There are large investments t in ports 500 million annually Cartagena port capacity will be doubled in next years, 55 million USD of Finnish technology in the port Energy generation composition is 66 % hydropower, 21% gas, 12 % carbon, renewable energy 1 % There are in planning phase to be tendered 7 hydro-electric plants and 2 coal plants. Investments amount to 500 million / year Water infrastructure investments are 2 Billion USD
Oriental Republic of Uruguay Area: 176,220 sq km Population: 3,5 million Capital: Montevideo (1.3 million) Official language: Spanish Religion: i Catholic (66%) Uruguay has applied major transformative policies to promote the opening and liberalization of the economy, and creating stability through the balancing of government budgets. Has an overall international financial atmosphere. Known for economic political and Known for economic, political and social stability.
Uruguay Infrastructure not sufficient for demands of growing production and export, investments: New ports Bridges and roads Railway Industry investments Small country but: New forest industry investments Finnish know how and players are very welcome
Argentine Republic Area: 2,766,890 km 2 Population: 41 million Capital: Buenos Aires (12 million) Official language: Spanish Religion: Catholic (92%) Argentina is the third biggest economy in the region. Rich in natural resources Important agricultural sector, a diversified industry, large IT sector and a strong service sector High literacy and educational levels in the country Argentina needs to stabilize its political scene, attract foreign investment, invest in the basic infrastructure and modernize its production capacity
Argentina Forecasts for construction industry 2010f 18.87 US$bn 2011f 21.83 US$bn Infrastructure projects: metro, railway, energy - more needs than money Real Estate market target for investments Partner with import knowledge and Good connections very important
Republic of Peru Area: 1,285,216 km 2 Population: 29,546,963 million Capital: Lima (7,6 million) Official language: Spanish Religion: Catholic (81%) Known for its aggressive trade liberalization policies i during the last years led by by President Garcia. Peru was the most growing Latin American economy in 2009 (1%) during the financial i crisis. In 2007 and 2008, the economy grew by 9 % per year, ranking among the fastest growing economies in the world. The Peruvian economy is expected to grow 3,8 % in 2010 and 5,1 % by year 2011. New FTA agreement with EU
Peru Forecasts for Construction industry 2010f 4.29 US$bn 2011f 4.95 US$bn Plans to invest 30 milliard USD in infrastructure Ports Airports Housing Energy Roads and high ways Infrastructure in urban areas : water treatment etc. Mining industry
Republic of Chile Area: 756 950 km 2 Population: 16.6 million Capital: Santiago (6,5 million) Official language: Spanish Religion: Catholic (89%) Political and social stability Least corrupt in Latin America Economic liberalization and very open market policies The Chilean economy is experiencing strong, stable growth Chile was accepted to OECD member 2009 Promotes herself as a platform to the rest of Latin America Exports: mining, forestry, salmon and wine. Free Trade Agreements with 56 countries Import Duties: 0% because of FTA with EU.
Chile before earthquake
Housing Hospitals Schools Reconstruction in Chile Infrastructure t Bridges High ways PPP Water purification plants Energy sector Telecom
Financing programs of reconstruction - Housing Reconstruction will be finance by Chilean government and their own financing program - not by international organizations Several programs for reconstruction by MINVU (Ministry of Housing and Urban Development) 1. Reconstruction in new areas with new houses 2. Reconstruction in old urban areas with new houses 3. Reparation of apartments and houses Families are going to get a voucher for paying their new house, so the support is not going to go to e.g. construction ti companies, but directly to families This support voucher depend on family income class and region where they live
Interest for New Solutions in Housing New earthquake resistant houses are welcome Ministry has interest to promote housing with wooden structures, metal structures, self supporting wall elements They are interested to find new innovative solutions for housing for example: energy efficient solutions, energy solutions There are requirements for houses in reconstruction projects Traditional Chilean houses are designed according to Chilean norms, separate approval not needed Non traditional houses should be recalculated according to Chilean norms and tested in certificated Chilean laboratories
Players in reconstruction - housing Regional service offices of ministry Architects EGIS (Entidades de gestion inmobiliaria social) Work as project consulting for social housing project, bring all the players together For reconstruction projects, they should be certified before June 2008 Construction companies Should be certified by MINVU Suppliers of prefabricated houses, supplier of products Co-operation with construction companies Suppliers should have representative in Chile Systems and products should fulfill technical aspects as well as pass through import restrictions (health requirements) Information about options for families Regional housing fairs are organized for presenting solutions to families who need to buy a new house after earthquake Web page arranged by the ministry for presenting solutions: http://viviendadefinitiva.minvu.cl/proyectos/seleccione?page=0
Housing in Chile
Chile: Free-time Housing Secondary & tertiary homes are a status symbol in the Chilean society Function of holiday and long-weekend getaway homes Some but not all built with timber Beach houses are concentrated in the central regions (Regions V VI) Lakeside cottages are situated in the southern regions (Regions VII X) The richest quintile of the population concentrates 51% of the national income (2007) Upper and upper middle classes can afford to pay for luxury in tourism Over 70 000 Chilean families with investment assets over USD $100 000 (2005) Ski resorts and golf/country clubs profile themselves with timber houses Pucon and Puerto Varas wooden image Nature hotels Market quick check in LA /2.10.09/ Finpro 28 Sources: El Mercurio, INE survey on household income 2006-2007
Freetime housing Cabanas 29
Continuation Could this be a business opportunity for your company? Short run long run? Are you interested to participate a delegation in August September to Chile? Thank you! Heta Pyhälahti, Head of Trade Center Finpro Chile and Argentina Heta.pyhalahti@finpro.fi Phone +56 98 289 9795 www.finpro.fi