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제목 | 베네수엘라 건설업 시장동향(2013.11) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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게시일 | 2015-11-20 | 국가 | 베네수엘라 | 작성자 | 오새봄(카라카스무역관) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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작성일자: 2013.11.21 작성자: 카라카스 무역관 Luis Beltran(lbeltran@kotra.or.kr)
1. Construction market in Venezuela
□ Analysis and forecasts for the construction market in Venezuela
○ Overall spending in the construction sector will grow at a compound annual growth rate(CAGR) of 3.2%, from US$4.4 billion in 2005 to US$6.1 billion in 2015. Recovery in the economy after the crisis of the last five years and the efforts of the government to improve the infrastructure to attract more investors will lead to growth in the construction sector.
○ Spending on residential construction will grow at a CAGR of 3.0%, from US$0.9 billion in 2005 to US$1.2 billion in 2015. This sector has shown a mixed trend of growth in the past; however, the government's attempt to provide housing to the entire population of Venezuela will facilitate growth in the residential construction sector.
○ Spending on nonresidential construction will grow at a CAGR of 3.3%, from US$3.5 billion in 2005 to US$4.8 billion in 2015. The government's initiative to improve and upgrade the infrastructure in Venezuela will drive growth in the nonresidential construction sector.
○ Venezuela is a high-risk country, with its construction risk scores significantly higher than the regional and the average world construction risk scores. The unstable and uncertain political system as well as the legal and institutional framework may hinder investment in the country. On the other hand, efforts by the government to improve the infrastructure for business opportunities will attract investment in the country.
○ Despite strong growth in 2012, and a number of infrastructure projects promised by the government, as well as a continuation of the housing construction program, which drove activity in 2012, we do not expect strong growth to be repeated in 2013. Indeed, factoring in base effects, high inflation, slowdown in production growth in oil, and waning momentum to pursue a social agenda following the election, we believe 2013 will be the start of a steep deceleration in growth. While there are a number of projects which, if progressed, would present upside potential, we believe the fundamental weakness will be exposed.
□ Fundamental Weaknesses Underlining Pessimism
○ The re-election of Huge Chavez for his third six-year term implies a continuation of economic mismanagement policies, which have been detrimental to the economy and business environment. Arbitrary decision making, anti-market policies and under investment in favor of populist spending has preventing investment in infrastructure over the past decade, and we expect continuation of the same over Chavez's next term.
○ Rising oil production will do little to help the government fund investment programs as much of its future oil production has been sold to China, with fund diverted to the social spending agenda enacted over 2012. Consequently, even though oil prices will remain elevated over the near term, and production is expected to increase, the government's fiscal position will not improve by the same level.
○ High inflation is eroding real growth and we expect this to be exacerbated over the short term. Our country risk team is anticipating currency devaluation in Q113, which will place greater upside pressure on the cost of imported building materials. We are factoring in inflation above 20% until 2016, which is driving our low real growth outlook over the period.
□ Projects moving forward present upside potential
○ Estimated 15.8% real growth in 2012 was predominantly driven by government construction of housing under the Great Housing Mission(GMVV). The program, launched in May 2011, hoped to build 350,000 houses in its first 18 months and eventually three million houses by 2019, and was implemented vigorously ahead of elections. As of September 2012, a total of 243,990 houses had been built since the launch of the mission, reaching 70% of the 18 month target. However, we do not expect this pace of homebuilding to continue into the next 18 months. Despite Chavez approving a further US$5bn for the program for the 2013~2014 period, the momentum prior to the election is likely to have dissipated and consequently we expect its contribution to headline growth to decline rapidly in 2013 and 2014.
○ The government's Railway Development Plan is seeing billions of dollars invested into new railway projects. The largest is the US$7.5bn project being built by China Railway Engineering. The 468km rail line linking Anaco, in Anzoategui and Tinaco in Cojedes was 20% complete as of September 2012. Also under construction is the EUR3.3bn Puerto Cabello - La Encrucijada railway line, which was 67% complete as of September 2012. The railway is being built by Impregilo and Ghella, and is due to be completed in 2014. The consortium is also building two new lines between the cities of San Juan de Los Morros and San Fernando de Apure, and the cities of Chaguaramas and Cabruta.
○ The government is reportedly investing US$6bn to addressing Venezuela's practically defunct electricity sector. The largest project under construction is the US$6.6bn Tocoma hydropower project (also known as Manuel Piar), which will have a capacity of 2,160MW.
○ Venezuela's housing deficit stands at around two million, a figure that has grown in the wake of severe flooding and mudslides in December 2010, which left 25,000 people homeless. Since President Hugo Chavez came to power, housing construction has slowed and an annual average of 44,285 homes have been built, compared with 69,528 on average per year between 1990 and 1998. It is estimated that 200,000 homes need to be build per year to plug the gap, according to the Venezuelan Construction Chamber.
○ The primary response to shortfalls in home building has been to expropriate and nationalize, as Chávez seeks to deflect the blame for the government's consistent failure to effectively tackle the housing shortage. Pledges have been made to tackle the shortages, however they have only started to show results in 2012, as the elections in October placed added pressure on the government to address the issue.
○ In what can be seen as an attempt to show he is doing something to tackle an issue that is eroding his popularity, Chavez has embarked on a wave of nationalizations targeting the construction sector. Following early November 2010's nationalization of steel producer Siderurgica del Turbio SA (Sidetur), which produces 40% of the country's steel rods, and six other construction companies, Chavez has nationalized aluminum producer Aluminio de Venezuela(Alven) and has expropriated large swathes of flat privately-owned land around Caracas and Vargas on which to build housing.
○ The nationalization of building material producers is unlikely to have the desired effect if precedent is anything to go by. In 2008, cement producers and steel company Sidorwere among the first companies to be expropriated. The three major cement producers - Cemex, Lafarge and Holcim - all had local assets expropriated and the local subsidiary of Latin American steel producer Terniumwas nationalized.
○ At the time, Chavez blamed rising cement prices for exacerbating the chronic housing shortage. However, the housing shortages are now even more overwhelming; at the same time, the output of Cemex's expropriated assets has actually fallen by 20%, according to local consultancy Ecoanalit, cited by the FT. In addition, steel shortages since the expropriation of Sidor have increased substantially, with the company estimating steel production of 2.2mn tonnes in 2010, compared to 4.3mn tonnes in 2007, as cited by Bloomberg.
○ Whereas previously, pricing was inhibiting housing projects, it is now supply, which is proving the major obstacle. The problem is being exacerbated by severe electricity shortages and in late 2009 and 2010 power rationing was extended to building material producers. Cement production fell 40% year-on-year (y-o-y) in the second half of 2009, and the production of steel rods declined by 20% y-o-y in September 2010, according to data cited by Bloomberg.
○ Despite these fundamental problems in the construction industry, the administration has managed to improve its track record on housing construction in 2011 and 2012. Overall construction sector growth has been driven predominantly by investment into the housing sector ahead of elections, which took place in October 2012. The Great Housing Mission(GMVV), launched in May 2011, has seen President Hugo Chavez finally following through on plans to address the crippling housing deficit. The program, which is hoping to build 350,000 houses in its first 18 months and eventually three million houses by 2019, was implemented vigorously ahead of elections. As of September 2012, a total of 243,990 houses had been built since the launch of the mission, reaching 70% of the 18 month target.
○ We do not expect this pace of homebuilding to continue. Despite Chavez approving a further US$5bn for the program over the 2013~2014 period, the momentum prior to the election is likely to have dissipated. We are therefore expecting homebuilding to contribute less to headline construction growth in 2013 and 2014, thus representing the primary reason for the sharp deceleration in growth. Further, the level of funding needed to sustain the investment is somewhat unsustainable (70% of the houses are being built by the public sector). This is especially true given the fact the country has committed around half of current oil production to China through oil for loan deals, therefore hitting future oil revenues despite increased production potential. Indeed, Venezuela has mortgaged future oil production for social spending today and as a result will fail to benefit as heavily from an expected ramp up in oil production over the medium term.
○ Rate of economic growth during the past 5 years and forecast
Source: Banco Central de Venezuela(BCV)
○ Economic growth
(% unless otherwise indicated)
Source: Banco Central de Venezuela(BCV)
○ Distribution rate of dwelling in Venezuela and income level
○ Priority Indicators
Source: National Statistics Institute
Type of Dwellings
○ There are no climate, disaster, security, sanitation, society, cultural, religious barriers concerning households that should be considered in Venezuela.
2. Current state of Foreign Construction Companies in developing
○ The construction industry followed a pattern similar to that of other Venezuelan industries, flourishing during the 1970s as the result of huge government expenditure on physical infrastructure, but contracting severely during the 1980s as the economy waned. Construction employed about 8 percent of the labor force in 1988 and contributed about 5% of GDP. After reaching a low in both output and employment by 1985, the construction industry rebounded somewhat by 1987 as a result of new government investments, increased foreign investment, and liberalization of some rent-control policies. The country produced a wide range of inputs--such as wood, cement, basic metals, and industrial minerals--for construction activity. Venezuelan construction firms displayed high levels of technical capability and erected many of the nation's complex, heavy industry structures.
○ Although many private construction firms ranked among the country's largest companies, the government played an increasingly more prominent role in the sector by the 1980s. The public sector accounted for 77% of construction in 1988, compared with 32% in 1978. State-owned enterprises fulfilled a substantial portion of the government's construction activity. Most public-sector construction responded to the needs of PDVSA, various power companies, and the corporations providing sanitation services.
○ After a frenzy of building in the 1970s, the country still faced an enormous deficit in urban housing in the 1980s. Accelerated urban migration forced millions of Caracas residents to live in ranchos(shacks), or squatter settlements, made from scrap materials, largely because of the lack of formal housing. As new home starts fell from 35,000 to 15,000 between 1982 and 1983, the Ministry of Urban Development (Ministerio de Desarrollo Urbano--Mindur) and the National Housing Institute (Instituto Nacional de la Vivienda--Inavi) became increasingly involved in residential construction. In 1985 public-sector housing construction exceeded that of the private sector for the first time; private firms, however, produced five times as many single-family homes. One obstacle to more rapid growth in housing was restrictive interest rate policies, which threatened to dry up future mortgage financing.
3. Construction Companies in Venezuela
□ Korean companies
○ Hyundai E&C Construction - Hyundai Engineering & Construction Co., Ltd(HDEC), with the Chinese Wilson Engineering have been retained to extend and streamline a refinery in Venezuela, for a total value of $ 2.9 billion US Dollars. The project to expand Puerto La Cruz refinery is scheduled for 42 months. PDVSA already gave the order for the works.
○ Daewoo Construction & STX construction - Daewoo and STX Construction also have obtained order that Pdvsa gave for a basic design of facilities for oil exportation in Venezuela. This project is composed of construction of oil storage tanks, delivering equipment, docking facilities in Orinoco Oil Belt, a total value of $ 10 billion US Dollars.
□ Foreign Companies
○ Rusia, China, Belarus participate in residential construction - In Caracas, 23,786 apartments are being constructed by Rusian companies for the sake of governmental dwelling project. In this project China will construct 13,000 and Belarus will 3,000. Venezuelan government invests $ 892 million in this project.
4. Current state of construction materials infrastructure
○ Currently steel is produced in Venezuelan SIDOR Corporation. Their production levels are always low and due to overhauling construction boom encountered during 2007~2013, the production is insufficient to meet demand.
○ SIDOR has also suffered several union labor disputes which usually shut down their production sometimes for 2 or even 3 weeks.
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