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Private Construction Expands 46% in Nicaragua, Fueled by Mega-Projects

Article Summary:

Private construction expanded 46.8% in the first quarter of this year, according to the latest report of the Central Bank of Nicaragua (BCN). Despite the reality that the country only produces sand and cement, the construction sector is set to explode as the government has plans for several mega projects, including a dry canal.

Photo Credit: Ben Witte

Original Article Text From Prensa Nicaragua via Google Translate :

Inject Capital Providers

Nicaragua produces only sand and cement. The rest of building materials imported. Despite this, the sector ensures supplier of these goods be ready to supply mega projects announced by the Government, including the dry canal. The stability in the price of materials has further encouraged the sector currently is betting Self-investment to expand its production capabilities and operation.

Mexican cement (Cemex) makes an investment of $ 5.8 million to expand its operational capacity, in the same vein as the company made Industrial Concrete Products (Proinco, SA), with 3.2 million and the company Cementos and Derivatives SA (CEDESA), with $ 600,000.

The president of the Nicaraguan Chamber of Construction (CNC), Benjamin Spears, describes the boom: “There are several companies that are investing themselves and apart from that banks have opened new materials, new dealers. Wine three months ago a Guatemalan company called PreCon and will supply blocks and pavers to market. ”

Private construction expanded in the first quarter of this year 46.8 percent, according to the latest report of the Central Bank of Nicaragua (BCN). However, in June the indicator that measures the level of production of construction materials reflected a slower growth of 6.6 percent (12.5 percent in June 2011), according to the Monthly Index of Economic Activity (MIEA).

Spears said they hope to close this year with a growth of over 20 percent. Among the projects that are pushing providers to invest materials also figure Military Hospital, “which is the largest building that will have Nicaragua,” expanding several roads as the road that directly connects Managua to Granada, which ” will be a road to get into concrete. ”

“All these utility companies are getting ready,” says Spears.

Dolores Prado, country manager of Holcim Nicaragua ratified the dynamism in the sector mainly in the area of ​​infrastructure in general. “For example, in the Atlantic Center and we are currently building four bridges. It is also investing in roads, streets, avenues, renewable energy projects and social housing. ”

In fact this year Holcim estimated growth of about 17 percent. “The social housing have contributed to the growth of the industry, as these homes generate additional infrastructure works on the developments and improvements in dwellings acquired. We believe this is an important engine for growth in construction, “he says.

Providers are investing in their production capacities. Francisco Silva Lazo, CEO Mexichem, Amanco in Nicaragua, said that “if tomorrow will run one of these mega projects would move us throughout our logistics to supply them.” Indeed said the company, whose headquarters are in Mexico, is making an investment of four million in its plant in Costa Rica with, it would be a direct supplier to Nicaragua.

“We are investing in new mills, cutting edge technology and we are expanding capacity,” specified. That company with presence in 14 countries in Latin America and 29 in Europe and Asia, provides PVC materials.

This enthusiasm enjoying not escape the building Distribuidora SA Building Material (Dimaco). Its general manager, Camilo Lopez, says that in a globalized world like today there is the advantage that in a matter of days can be imported from anywhere in the world construction materials.

Lopez acknowledged that the country would need to import machinery to develop the projects, as they will not be an obstacle to ensuring the availability of the same. For example, says that if you build the dry canal certainly dramatically raise external purchasing products such as steel and machinery.

Stable prices
And that building is not only this year has a good performance in their growth indicators has also been favored by the relative stability in the price of building materials: wood and ceilings, cement and derivatives, and sanitary floor, metal , among others. At least this is what I say representatives of this sector and Central Bank data of Nicaragua (BCN) until July 2012.

The Price Index of Construction Materials (IPMC) Global reflects that between January and July this year this indicator has experienced a variation of 19.9 points, from 986.6 to 1006.5 points, respectively.

The Nicaraguan Chamber of Construction estimates that on average prices of materials have increased less than five percent. However, note that there are some products that are up to ten percent.

What is certain is that while there have been increases in the prices of construction materials, the industry refers to stability is that these increases were minor compared to the last two years.

In this sense, the country manager of Holcim Nicaragua indicates that although here there has been an inflation of three percent (2.72 percent through August, according to the NCB), a nine percent increase in the price of energy and fuels 4.7 percent, “Holcim, in order to maintain your product accessible to all Nicaraguans, has increased the price well below our cost increases and this alone has increased three percent from a year past. ”

The representative added that they hope to keep Holcim cement prices stable, “unless there is another sharp increase in energy or fuel.”

Link to Original Article:

From Prensa Nicaragua

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