Commercial Roofing in Peru Essay

2272 Words Mar 8th, 2014 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 Argentina were removed from our consideration
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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,

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