Overseas opportunities: South America

Martín A. Gonzalez VidalIndustrial Engineer

South America• Capitals and major cities to start

businesses :

• Argentina:• Buenos Aires• Cordoba• Mendoza

• Brazil:• Brasilia• Fortaleza• Sao Paulo• Salvador• Rio de Janeiro

• Chile:• Santiago• Valparaíso

• Colombia:• Bogota• Bucaramanga• Cali• Medellin

• Peru:• Lima

• Venezuela:• Acarigua• Barquisimeto• Caracas• Valencia

The rest can be studied once established

Distance from the capitals and major cities between: Argentina, Brazil, Colombia &

Venezuela

Caracas – Brasilia: 3.530 KmCaracas – Rio de Janeiro: 4.420 KmCaracas – Sao Paulo: 4.275 Km

Caracas – Buenos Aires: 4.630 KmCaracas – Cordoba: 4.248 KmCaracas – Santiago: 4.750 Km

Caracas – Bogotá: 1.015 KmSao Paulo – Buenos Aires: 1.660 KmSao Paulo – Santiago: 2.540 Km

Malasia – Sao Paulo: 18.344 KmMalasia – Caracas: 14.836 Km

Points of interest for construction in South America

Argentina• Interest:

• Huge project to build a Rio de• Plata Business center and residences• (hotels, housing development, etc.• Grupo ENAS can be our representative in

Buenos Aires, also as the AL formwork is new in this country they need plenty of skill manpower.

• The construction sector has grown 14,53% by last 2010, and this year even there’s a presidential election the growth forecast is estimated at 20%

Brazil• Interest:

• 2014 Soccer World Cup• 2016 Olympics Games• Government investment for social

housing more than 650.000 units for this 2011

• Exitos can be our representative in there• Strong market currency against the U.S.

dollar.

Colombia• Interest:

• Public and private investment for housing of all kinds

• Civil construction for expansion of airports, railways and metro

• 90% of the population speaks English and are Spanish speakers (language used in all countries of the Americas, except USA, Canada and Brazil)

• The importation of products has low rates

Venezuela• Interest:

• Government will invest for this 2011 to build more than 150.000 housing• Direct contact with Venezuelan

government to start negotiation, and get easier the immigration for foreigners workers.

• Private Sector to build a huge shopping center, housings, and business towers.

AFF: Additional freight fee for the renewal of the mercantile marine (is levied at a rate of the ocean freight charges)CCF: Customs clearance fee (is applied at a rate of the FOB value)COF: Contribution to funding of social security (is levied at a rate of the duty paid value)STT: State tax (is levied at a standard rate of the duty paid value)PIS: Contribution to social integration programs (is levied at a rate of the duty paid value)VAT: Value added tax (is levied at a rate of the duty paid value)

Information from: http://mkaccdb.eu.int/mkaccdb2/indexPubli.htm

PRODUCT CODE : 8480.60

Country Duty VAT STT COF PIS AFF CCFArgentina 15,0 % 10,5 % 0,0 % 0,0 % 0,0 % 0,0 % 0,0 %Brazil 14,0 % 0,0 % 18,0 % 7,6 % 1,65 % 25,0 % 0,0 %Chile 6,0 % 19,0 % 0,0 % 0,0 % 0,0 % 0,0 % 0,0 %Colombia 10,0 % 16,0 % 0,0 % 0,0 % 0,0 % 0,0 % 1,2 %Peru 0,0 % 19,0 % 1,0 % 0,0 % 0,0 % 0,0 % 0,0 %Venezuela 10,0 % 12,0 % 0,0 % 0,0 % 0,0 % 0,0 % 1,0 %

Once established, the supply from South American countries is easier and cheaper, as there is a pact called “Comunidad Andina (CAN)" that allows a trade between countries with low costs of taxes and fees. The Andean Community, to a greater understanding, is very similar to the European Community which allows free trade between countries, as long as the country of origin and destination belong to this community, approximate cost of supply from Colombia to the main ports in South America are:

As I got Government staff friends inVenezuela, they can be help us to introduce cheaper the material and the manpower

Major suppliers of AL Systems to compete

1. PERI years earlier developed an aluminum formwork system is a hybrid between Wall Ties and Aluma Systems, and is currently being offered in different cities of Brazil, but did not want to enter so far in Colombia. In the major construction companies of Colombian, its comments that PERI has great prospects of growth from 2012 in Colombia, and they are looking primarily associated with a local company and then go it alone

2. MILLS, since 1997 came in Brazil and has introduced modular aluminum system with the help of NOE and later with Aluma Systems, then they have copied the system and make directly in Brazil. n mid-2011 once established in northern Brazil, border with Colombia and Venezuela, will begin track procedures for introducing the system in those countries.

3. FORSA is the only company in Colombia that manufactures and distributes modular formwork system of aluminum, even has two factories: one in Uruguay and one in Mexico. They have provided material for projects in Brazil, although employers report that their material is of poor quality and that have failed in the delivery date.

340-350 $/m2

380-390 $/m2

325-330 $/m2 320 - 340 $/m2

Considerations to take into account and recommendations

• Because those big companies (FORSA, MILLS & PERI) are based in South America, the deadline for a supply is between 10 and 25 days, which is why I consider important: that once we are established, we should develop a business plan to supply as faster as we can.

• To establish the company in Venezuela is easier because as I do have also the Venezuelan nationality I’ll use my rights to do it.

• I have dual nationality (the Spanish and Venezuelan), I do not need visa to enter any country in the Americas and even helps me a lot to build relationships, do business at any time.

• Now after China, South Americas countries are growing fast and Europe and Asia's countries are investing in there, so it’s the time to be established.

• Skilled manpower in Brazil is not a requirement (but we can still compete), however, in Venezuela, Colombia, Chile, Argentina is need as water to live, because cycles, and efficient production is far away compare to Asia.

Needs to introduce the products in the South American market

• I’m using DROPBOX to introduce to everybody the sammok brochures, videos, company profile, operation manuals, etc. So for installation I must have info to introduce as well.

• Request a training to closely know all the goods and services, even in works that are running now, so catch up with the know how of each system.

• In South America there’re often a senior construction engineers, and its nature from them to ask a lot about new technologies, products, materials, systems and services of each foreigner company, that’s why should I be prepared with all the possible information from Sammok:• I must be prepare to answer these, FAQs:

• What is the maintenance of the product?• What is the best performance in applications?:

• Number of times that can be reused?• What type of concrete should be used? "An additive is needed?• Can Sammok do a lease with option to buy?

Contacts I have in all South America:• Argentina

• Alfredo Baigorria:• He was a co-worker in IN Sistemas a couple of years ago, but now resides in her native country (Argentina) I spoke with him and I

have an email. He liked a lot the system (AL-Formwork). He had heard about this system, but he does not know directly, but he has a own construction company, so he’ll ask me for offered project as soon as he draw new ones.

• Eduardo Nacimento:• He´s a close friend of mine. He’s the owner of one of the three bigger construction companies in Argentina (GRUPO ENAS), also he´s

the president for the scaffolding commerce chamber of Buenos Aires. He also is a close friend for the bigger scaffolding company in Brazil (ROHR), both company: ENAS & ROHR are interested in invest in AL- System to open new business.

• Colombia• Massimiliano Boniello

• It is an Italian who lived in Venezuela, a close friend of mine, know much about traditional construction issues, he now lives in Bogota and he has a company established and registered under Tax Identification Card, which means we would lower the taxes to import. I think this country we need to study to be our establish site in South America, because Colombia is growing as much as Brazil. He also has plenty of constructors contacts.

• Monica Montoya• She is the CEO of ReMaster (Floor & Ceiling Solutions) in Colombia, but also coordinates the activities in Brazil, making it an

excellent contact for both countries. Their products are an advanced range of technology that the major builders will order their products. Even this negotiating entry into Venezuela through my aunt.

• Brazil:• Thiago Torelo

• A good friend of the university here in Spain, his father owns a soccer team in Brazil, called "São Caetano, including his uncle is a judge for Life in Brazil and has many contacts in the government. He has no experience in construction, but we can get many contacts for builders, in Brazil In Sistemas have two technical commercials, I’m sure I can change their minds and take them to work with us.

• Ricardo Ventanila• It has a consulting company with great influence in the construction sector (Purchases of materials, projects and management

improvement and renovation of the entire contract). It has a number of contacts in the major cities of Brazil, and is willing to negotiate with us for purchases of materials either for supply or for specific contracts.

• Luciano Calvis & Andre Nogueira:• Both of them are ex-co workers from my actual job, they’re brazilian guys which are technical commercial living at Sao Paulo, they

have plenty of contact in the whole construction market of Brazil as: Odebrecth, BairroNovo, Schahin, Hocthief, Mendes Junior, etc. They can search and get any kind of projects.

Contacts I have in all South America:• Peru

• Santiago Hidalgo• I met him in BAUMA (international construction trade fair) this year in Germany, is the international export manager from ULMA, its current location

is in Peru but also takes Central America control. ULMA does not own AL-formwork neither plan to design or develop it, so what I said is that if ULMA get a project with this kind of requirements he will recommend us, in fact I will receive shortly an offer from Panama because ULMA has not been able to bid. As ULMA has several branches in South America he’ll speak with each of the managers to submit the system of aluminum and see if they are interested in becoming our suppliers or distributors.

• Venezuela• Gisela Vidal

• She is my aunt and works directly for the Venezuelan government, is a civil engineer and belongs to an American firm of engineering and construction company that owns 30% of the Venezuelan market

• José A. Oliveira• He is general manager Oliveira buildings, holds more than 40% of construction projects social housing and private housing with internal shopping

centers.

• Enzo Scaranno• He´s the mayor of one of the biggest and rich city of Carabobo state. He owns plenty of land which can be used to built. He is able

to help us with the visas, taxes, importations, etc.

Some of the most influential companies in the real estate and construction in South America

Schahin is today a solid and diversified group, active in the main sectors of Brazil’s development: Engineering, Real Estate Development, Telecommunications, Oil and Gas, Energy and Finance (Banking, Brokerage, and Financial services).

with the objective of aiding our customers to explore the enormous existent potential in the purchases of indirect materials and services, turning them more competitive in the market or simply increasing their profitabilities

A company with high level of influence in the Brazilian government, acting in real estate in a planned and consistent in different branches of the real estate market - residential, business, commercial, tourism and leisure, one of the biggest

HOCHTIEF's portfolio in Brazil offers Engineering, Construction and Facility Management services to operate throughout the entire project life cycle.

Mendes Júnior is a company that has been in business since 1953 in the heavy construction market in Brazil and abroad, developing projects in the segments of road and highway construction, railway, subway, port, hydroelectric, thermo electrical, petroleum and gas, ducts, urban sanitation, irrigation channels and industrial maintenance onshore and offshore

A company that designs, manufactures and installs windows, metallic structures and formworks, with high technological level to give response to the needs, expectations and desires of our clients. We give services of support to our clients, rom the basic engineering in the projects up to the rent of equipments.

A service company dedicated to the development of construction and infrastructure projects, in aims to transform our physical environment while generating progress that equitably benefits the community, our shareholders, clients, employees and suppliers.

Design, construction, management and sale of real estate projects that stand between the towers of apartments, houses in open and closed housing complexes and citadels.

The Core Business is the Project Management and Construction of industrial and commercial housing. Also our Construction business line is widely recognized by leading multinational and national companies for the design and construction of private projects by the system of delegated administration.

Dynamic company in the area of design and engineering projects and construction that offers customers an excellent service based on win-win philosophy, expressed through the principles of mutual trust, ethics, quality, creativity and accountability at all commitments.

Some of the most influential companies in the real estate and construction in South America

THANK YOU !