Commercial Roofing In Peru Essay

2310 words - 10 pages

07/03/2014

Construction Industry Analysis

Stefano di Fabio

Christopher Anderson

Daniel Mujica

GEOGRAPHIC AREA:

Cooley Group assigned us to research the Latin American market and find business opportunities for their roofing products in this specific region. Therefore, we began our study by analyzing all 20 countries in Latin America. At first, we narrowed our selection by evaluating political risks. Due to recent political turmoil in Venezuela and Argentina, we decided to eliminate these nations from our selection. At the same time, countries with high economic-trade dependency with either Venezuela or ...view middle of the document...

As a result, the research showed that the most prominent nation was Peru- followed by Panama and Ecuador respectively. By conducting this research, we were able to realize the vast market opportunity that Cooley has in Peru. According to Business Monitor, Peru is planning to oversee more than $20.5 billion USD in infrastructure between 2011 and 2016. (Peru Infrastructure Report, 5)

INDUSTRY:

For the Peruvian market, we decided to focus in the infrastructure industry. Total investment for this industry in Peru is expected to grow at a 12% year-to-year rate from 2011 until 2016. At the same time, construction investment is estimated to increase at an 8.2% rate between 2013- 2017. (Peru Infrastrucutre Report, 5) Hence, most of the construction growth over the next years will be derived from strong demand for infrastructure due to economic development in the next decade. Ultimately, this will generate investors’ confidence in the Peruvian market and will increase foreign direct investment. Thus, we believe that infrastructure development has been one of the key factors in recent FDI growth- this can be supported by the results obtained from the previously mentioned macro-economic analysis, please refer to Appendix A for more information.

Furthermore, government incentives have become crucial for the country’s recent economic growth. The central bank approved a $3.5 billion USD stimulus plan in late 2011. (Peru Infrastructure Report, 9) The effects can now be seeing in public works projects- construction of hospitals, roads, and schools. In 2012 the government also invested $758 million USD in infrastructure, increasing infrastructure growth rates from 8.1% to 9.8% in 2013. Similarly, the government has been creating long –term growth plans. The most relevant during 2012/2013 period was the concession program of ProInversion valued at $10.4 billion USD. Also, the government is expected to launch more concessions during the upcoming years- the most anticipated ones are the PanAmericanHighway and several electric projects.

Product:

The global construction industry envelopes many different smaller industries that all contribute to construction as a whole. The industry that pertains to CooleyGroup is commercial building products. Within commercial building products, Cooley works mainly in roofing products, most notably the “single-ply roofing” niche market.

1. Single-ply roofing

This particular type of roofing has come into its own as the foremost selection for roofing products for heavy industrial, manufacturing, and infrastructural roofing such as airports. The idea is simple; these types of buildings need a strong solid roof that is going to last a long time (typically 20-25 years at least) and will stand up the harshest conditions. Single-ply roofing is a membrane made of very tensile fabric that is coated with either thermoplastic olefin (TPO) or polyvinyl chloride (PVC) to create a flexible membrane...

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