This report is based on information provided by industry experts and importers. No exact figures are available on the size of the Uruguayan hardware market. However, all numbers listed in tables have been extracted from local databases used by the U.S. Commercial Service in Montevideo.
Uruguay has practically no local production of hardware products except for paint, shovels, spades, folding stairs, and carts. China is the main supplier of overall hardware products, followed by Brazil and the United States. Imports from China and Brazil are expected to continue predominating as most consumers show a trend toward inexpensive products. Since the Uruguayan market for hardware products is fairly saturated, market opportunities exist for U.S. firms offering innovative products at competitive prices.
Construction in Uruguay is one of the fastest growing sectors and contributes significantly to the country’s economy, approximately 7% of Uruguay’s GDP. The hand and power tool segment of the Uruguayan market is growing significantly and according to industry experts is expected to continue growing.
The Uruguayan market for hardware products includes hand and power tools.
8205 – Hand tools (including glass cutters), blow torches, vises, clamps, hammers screwdrivers, drilling tools, tools for cutting wood, among others.
8206- Other hand tools
8207- Interchangeable tools for hand tools, whether or not power operated for pressing, stamping, punching, tapping, threading, drilling, millings, etc.
8407- Pneumatic or hydraulic tools, tools with self-contained electric motor including saws, drills, grinders, polishers, sanders, electric scissors and hammer drills
China is the main supplier of hardware products to Uruguay, with a 40% market share, followed by Brazil (15%) and the United States (14%). Other countries include: Germany (6%), Argentina (4%) and Italy (3%). Growth potential is expected to continue since Uruguay is in a stage of overall economic growth, which has been sustained in recent years, and that has fueled a boom in the domestic construction sector.
The capital city of Montevideo and Punta del Este (Uruguay’s principal beach resort), are the most important areas for construction. The biggest increase has been in the construction of luxury apartment buildings. However, construction of upper-middle class homes and low-income housing has also grown significantly.
Lawn & Garden Equipment Sub-Sectors
The hand and power tools market is divided into large, medium and small equipment segments. Large equipment is used in construction projects; medium tools in electricity and sewerage work, and small tools for residential maintenance and repair work.
Power tools can be electric or pneumatic. Product categories include: drills, screwdrivers, staplers, nail guns, hammers, impact wrenches shears, polishers, sanders, circular jaws, jigsaws, chain saws and grinders. Hand tools include a wide variety of product such as: presses, guillotine shears, hammers, brushes, shovels, spades, rakes, hoes, forks, picks, and cutting tools (manual hedge shears/trimmers).
The hardware products sector is almost entirely import-based. In 2010, total Uruguayan imports for this sector were valued at USD 31.4 million, a growth of 69% over the previous year (total 2009 imports were USD 18.6 million). This resulted from an extended increase in imports that had fallen dramatically during the economic crisis of 1999-2002.
Imports of hardware products are expected to continue as in other industry sectors, given the lower manufacturing costs in Asia (mainly China), but also in Brazil and Argentina. Exports from these countries are expected to continue predominating in the hardware sector.
The majority of products are imported from China, Brazil and the United States. Other countries that supply the Uruguayan hardware market are: Argentina, Taiwan, Germany, Mexico, Spain, Italy, Chile, India and Japan. Many leading brands are present in the Uruguayan market, including: Black & Decker (U.S.), Stanley, Ryobi, Rust-Oleum, Norton, Irwin, and WD-40.
Uruguay is a founding member of MERCOSUR, the Southern Cone trading bloc, which also includes Argentina, Brazil and Paraguay. There are no import tariffs for items of MERCOSUR origin, which prompts strong competition primarily from Brazil and Argentina. Imports coming from MERCOSUR countries have tax incentives explaining the Brazil-Argentina combined 26% overall market share.
U.S. products are sometimes rated poorly when it comes to financing, which is an important sales factor in Uruguay. Price and quality are the two competitive factors that have a greatest bearing on the market.