Construction Equipment/Machinery Sector

An Expert's View about Mining, Quarrying and Construction Machinery in Uruguay

Posted on: 30 Dec 2011

Overview

The construction machinery market in Uruguay depends predominantly on imports. In 2011, total imports were valued at US$ 290 million. Brazil held a 34% market share, with US$ 152 million worth of exports, followed by China (13%), Argentina (12%), the United States (10%), and other countries (31%). Investment in heavy equipment is likely to continue over the next few years to support important growth in infrastructure construction activity.

Construction is one of Uruguay’s most promising sectors. The capital city of Montevideo and resort of Punta del Este are the most important areas for construction. The biggest increase was in the construction of luxury apartment buildings. However, construction of high-end middle-class and lower-level buildings also grew significantly.

The major construction-related projects in the pipeline are:

- Shopping malls

- Hotels/Casinos

- Residential Construction

- Port Projects

- New Jails

- Convention Center in Punta del Este

- Industrial, Science and Technology, Business and Service Parks

- New Pulp Mill Project in Punta Pereira (Colonia)

Brazil is the main supplier of construction equipment and machinery to Uruguay, with a 34% market share, and Uruguay’s northern neighbor dominates the heavy equipment segments (bulldozers, levelers, scrapers, and excavators). The major U.S. manufacturers currently present in the Uruguayan market are Caterpillar, Case, New Holland, John Deere, and Ingersoll-Rand among others.

Currently, the Construction sector employs around 55,000 people. It is estimated this figure could reach 60,000 by 2012. Cost of construction per square meter can vary from (US$ 1,400 to US$ 4,000) depending on site conditions, local regulations, and the availability of qualified workers. Construction in Uruguay has historically used traditional materials (concrete and bricks), but lately new construction technologies and methods have emerged.

Import Market

The construction equipment/machinery sector is import-based. In 2011, total Uruguayan imports for this sector were valued at US$ 290 million, a growth of 18% over the US$ 245 million imported in 2010.

U.S. manufacturers of heavy construction equipment have an important presence in the Uruguayan market. They enjoy a good market image, particularly those that have been operating either through wholly-owned subsidiaries or Uruguayan agents for many years.

Competition

U.S. companies face major competition from Brazil, China and Argentina. Most products manufactured in Brazil and Argentina enter Uruguay duty-free under MERCOSUR rules.

Pricing remains an important factor that influences the purchasing decision of the majority of end-users in Uruguay. However, the large construction companies also take into consideration factors such as quality and reliability of after-sale service and product warranties. U.S. manufactured products are regarded as high in quality but occasionally lose price competitiveness vis-à-vis regional products. Also, they are sometimes rated poorly when it comes to financing, which is an important factor for sales in Uruguay.

End-Users

End-users of construction equipment include both public sector enterprises and private sector contractors. They are involved in private and public funded projects, such as infrastructure improvements as well as residential and non- residential developments.

Among the top construction industry players are:

Saceem – www.saceem.com.uy

Stiler S.A. – www.stiler.com.uy

Norte Construcciones – www.norteconstrucciones.com.uy

Teyma Uruguay S.A. – www.teyma.com.uy

Campiglia Construcciones – www.campiglia.com

CIEMSA – www.ciemsa.com.uy

Engineering Companies: CSI Ingenieros – www.csi.com.uy

Read the full market research report
 


Posted: 30 December 2011