Tuesday, June 6, 2023

Completion: Opportunities generated in a favorable context for construction

Since the pandemic began, they have sought to improve their space. Although the budget is not the same as in 2020-2021, when there was more liquidity because the grants were awarded and the money was released from the hand. AFP y CTSthere is always the intention to buy better finished.

This is not a separate case from reality, since the business ended up projecting a favorable performance this year, though The construction sector is trying to stay afloat after a first quarter in the red with a growth projection of only 0.5% this year..

Promart and Sodimac are optimistic about the growth of the sector this year. We observe that the categories linked to renovation are strengthened, as well as what is necessary for the repair, maintenance and decoration of the houses are maintained. We are confident that in the rest of the year we will continue with a positive trend”comment Ramón Ponce de León, Manager of Sodimac and Master Peru.

“We remain optimistic about the outlook for the coming months. We know that the results obtained during the first quarter of the year could be better, and that is our goal for the coming months”add Hernán Ortiz, manager of the commercial area division Promart.

Ortiz remembers that the last years have been very good for the category, in fact, the average sales in the years after the start of the pandemic exceeded the sales recorded before 2020 by more than 50%.

Rivelsa, which has three business areas: residential, commercial projects and distribution, also predicts a good year. Kimberly García, Rivelsa Project Managerpoints out that its main clients are architectural studios, construction and real estate companies, and by 2023 they want to increase themselves in residential, school and hospital projects.

HIM TOO: Housing sales: the districts of Lima where the demand is growing and in which it is decreasing.

Despite the turbulent start, there is optimism

Ortiz and Ponce de León agreed that the first quarter was difficult in the context of protests and rain. Moreover, Daniel Documet, Sales Manager National Ceramics Saint Lawrencesaid that they already anticipate a slowdown in the category in this period, so they are prepared for it.

In addition to the impact of climate factors and social conflicts, García says, are high interest rates: “One of the factors in the slow pace of construction was interest rate in the mortgages, they were on the increase for 2 years, people did not venture to buy houses at the previous year’s rate (and this affects the intention to expand reserves)”.

However, after 20 months of growth, he added, interest rates appear to have stabilized; which gives a good sign that home buying could pick up its pace and therefore the constructions will be activated with greater force.

The purchase of completion is due to the reactivation of different projectsFor example, this year the hotel industry has just woken up, it contracted because of the health emergency that we experienced. After the pandemic, we see that different families choose to improve their lifestyle, therefore, when they improve their homes, they need to remodel them and bet on different styles.details.

Moreover, self-construction is a phenomenon that continues to grow in the country, “so the renovation, improvement or repair will continue”, Ortiz said. Management reported earlier this year self-construction was a support for the great suppliers of materials and was reflected in the finished areas.

For example, it is important to note that the The main driver of the coating category is self-constructionrepresenting more than 80% of consumption, notes Documet. “Although it is true, the construction sector serves as a reference, great opportunity for San Lorenzo to focus on these independent projects”he emphasized.

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What performance do you see in your companies by 2023?

Although there is optimism among the actors consulted, how is it reflected in the projections for this year?

The representative in San Lorenzo aims to grow in double digits between the local market and export. And, he considers it essential to accompany the efforts of the company with investment, for this reason will expand the Lurín plants and with that their productive capacity will increase by 10%..

“With this expansion, our Lurín plant is on its way to becoming one of the most important centers of ceramic production and innovation in Lamosa (…)”narra Documet.

Henry Wertheimer, CEO of Pisopak, He says that the company managed to sail through the first part of the year, supported -in part- by launching new products, such as wall panels and porcelain tiles. Moreover, The implementation of the e-commerce channel was a key factor; and add to this, they recorded double digit growth in them exports through new markets where they entered: Brazil and Mexico.

“We maintain our projection of double-digit growth. In this sense, the introduction of new products and comprehensive service offerings for our clients’ projects are two key initiatives to promote the company’s growth.“, said Wertheimer.

HIM TOO: The areas of Lima where the investment in a property recovers faster.

Sodimac and Promart also predict a good 2023. So much so that in the case of Sodimac, says Ponce de León, 11 stores throughout the country were modified last year to sell apartments in a new showroom area, which allowed them to grow in these stores in more. than 10%, and this year three more stores will be modified.

In addition, he explained that this year they are committed to continue promoting displays in stores. AND Its strategy seeks that the product categories have matrices with different price levels; as well as addressing the speed factor that weighs on customers (delivery in less time).

Promart, for its part, has added new stores in all countries and has already reached number 35 last February.

In the case of Rivelsa, in the first half of this 2023, for the project channels, it is necessary to increase a mixture of toilets. “The key to achieving the goals proposed in 2023 is winning stock and range of prices to cover new and current project guarantees“, stress.

HIM TOO: Builders now anticipate a drop in the supply of new real estate this year.

What is the most requested ending?

Executives consulted emphasize the preference for porcelain and ceramic tiles. For example, Promart sees that its customers are looking for first price porcelain tile floors, but national ceramic factories in smaller formats are also widely accepted by the public due to their low prices.

Sodimac is following the same line. “The products with the greatest demand are porcelain wall and floor tiles with a lot of trends in large formats such as rectangular porcelain tiles, 0.6 x 1.2 plates and 1.20 x 20” wooden planks.said Ponce de Leon.

In the case of San Lorenzo, for flat, the products most purchased by consumers are formats 20×61, 45×45 and 60×60; and on the walls are the formats 27×45 and 30×60, specify Document. But they also identified a trend for large format.

These are not the only products. Pisopak’s Wertheimer talks about flexible coating businesssuch as SPC and LVT vinyl flooring. “Today they are a popular choice in the construction industry, due to their durability, ease of maintenance and adaptability of design. It is important to emphasize that the trend towards these floors is also driven by the commitment to the environment, because most most of these materials are produced with recycled components.” mentioned.

HIM TOO: Construction would fall in March for the third month in a row, Capeco estimates.

In the same sense, Rivelsa, which serves three areas, seen as the most demanded products sanitary appliances in accordance with the construction and certification of LEED and Green Bond Housing.

In addition, García points out, they close in 2022 and a 35% growth in sales of porcelain and ceramics compared to 2021. He says that in 2023 there is a tendency to change the use of natural stone (quartz, granite or marble) for bathrooms and kitchen counters, being replaced and improved with large-format porcelain tiles.

“For our institutional projects, we grew 10% in 2022 compared to 2021, with World Dryer hand dryer products and Leyees stainless steel accessories, these types of products appear in shopping centers, restaurants and hospitals.”details.

Sodimac, in the bathroom, points out that those with a hidden siphon ask; and When it comes to installing flooring quickly, the trend is to click vinyl flooring. Ponce de León adds that given the situation, they produced a considerable amount of special purchases negotiated directly with the manufacturer; in order to have quality products at a better market price.

Promart adds that traditional construction continues to demand more, despite this, Dry construction has grown in double digits year after year.

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The purchase channel is complete

For Daniel Documet from San Lorenzo, a problem to consider is that buying behavior varies according to the channel. For example, it is detailed that in Peru, The traditional channel continues to be the most important, with several clusters at the national level and very diverse offer both in designs and sizes, especially in national products.

The second most important channel is the home centerwhere the offer is also very varied and where, in the case of the company, they sought to build strategic alliances with them. Finally, there are specialty stores whose offers focus on higher value products aimed primarily at consumers with a higher average ticket.

In a transversal way, the e-commerce factor appears. For example, Sheila Reeves, Ripley’s E-Commerce Managersaid that for two years they have focused on strengthening the platform with almost 300 sellers and brands in the field home improvement.

By the end of 2022, this item has grown by more than 50% compared to 2021, and the first quarter of this year continues with a double-digit growth trend, says Reeves.

“Although other new categories in the Ripley’s market, such as automobiles and pets, are expected to have strong growth, For home improvement we seek to have a share of sales of 14% in our marketgrowing by 2 points in share compared to the previous year”, pointed out.

Tools, air conditioners, bathroom and kitchen accessories and finishes are more in demand, especially the latter, which was the category that grew the most in 2022.

pipe. Guadalupe Rosazza consultant specialized in the construction sector in TMS, He commented that pipes have a greater penetration in hardware stores than in construction warehouses. “Regarding sales, although there are two brands that stand out: Trebol with 18%, Matusita with 13%, there are many participants. Among these are Italgrif, CIMVAL, Favinsur, C&A, Vainsa. In addition, Chinese brands have grown. We have almost 17 or 18% of Chinese brands”, details. He explained that self-construction in Peru is important and low-income consumers want similar products that can be accessed by higher-income buyers. “Then they gained access through Chinese brands and their growth was strong”referred to.

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