Growth in Latin America's building product imports to continue
By Daryl Delano -- Industrial Distribution, 1/1/1999
Despite current concerns about the possibility of Latin American nations catching the "Asian flu," it still appears as if economic growth throughout most of the region (oil-rich Venezuela being the most significant exception) will be reasonably strong in 1999. This should mean continued good opportunities for building product, construction equipment, and construction engineering and management firms in the region.Best Market Reports are snapshots of a given market segment as described by Commercial Service and U.S. Department of State officials stationed overseas. These brief reports are summaries culled from much longer reports that are submitted by most U.S. embassies as part of their annual reporting duties. Commercial officers in the embassies are instructed to describe the best market segments for U.S. exporters (hence the "BMR" designation).
Following is a summary of what this information tells us about market opportunities for building products in Argentina, Brazil and Chile. More detailed information on the commercial market in each of these countries can be obtained by contacting the U.S. Department of Commerce Export Assistance Center.
Argentina
The Argentine building and construction industry has experienced moderate but consistent growth since 1991. The construction financing sector-fueled by the creation of private pension funds is growing very rapidly.
Local producers largely supply the Argentine construction market, but products and building methods generally lag behind in technology and quality. The cost of building products and supplies is high compared with the U.S. and other industrialized countries. Prices have been gradually coming down for items such as carpentry, coatings, wood and metallic structures, kitchen and sanitary equipment, adhesives, and hardware -- forced down by competition from overseas suppliers.
Imports currently only satisfy about 16% of total demand, and consist primarily of products for the high-end consumer bracket. The most frequently imported items are tiles, high-quality doors and windows, insulated windows, saunas and shower boxes.
The market is open to overseas suppliers and there are few trade barriers. However, U.S. suppliers should be aware that since the start of the MERCOSUR customs agreement, imports from member countries, primarily Brazil, enter Argentina duty-free.
Brazil
Imported building and construction products still hold just a small (less than 5%) market share in Brazil, but have been growing consistently since the market was opened in 1990. Brazilian builders and consumers are looking for higher quality products and services than are currently available locally. This environment, of course, offers excellent opportunities to U.S. building product suppliers.
U.S. embassy staff has identified the best prospects for U.S. manufacturers of building products to be roofing/siding materials, floor coverings, masonry products, and power & hand tools.
Chile
The Chilean market for building materials is steadily growing at 10% a year. The domestic industry is large, and its products are widely used in low and middle-income housing construction. For high-income construction, imported building products are enjoying increasingly strong demand.
Prefabricated houses are becoming increasingly attractive to Chilean customers; they currently constitute about 11% of all building product imports. Best opportunities for U.S. exporters are seen to be in the following product categories: pipes and fittings, valves, insulation products, ceramic tiles, mirrors and flat glass, and elevators.
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