São Paulo – A survey conducted by the Brazilian Export and Investment Promotion Agency (Apex) reveals that Saudi Arabia, the United Arab Emirates and Qatar are the most attractive markets for Brazilian manufacturers of construction and house building material, out of the countries that are part of the Gulf Cooperation Council. The bloc also comprises Bahrain, Kuwait and Oman.
The survey informs that even though the United Arab Emirates have been the centre of attention when it comes to business in recent years, Qatar and Saudi Arabia have stood out more during the crisis. “Qatar stands out mostly due to its extraordinary growth. Saudi Arabia stands out for the robustness of its economy: the value of construction contracts in the country has grown 230% in the first six months of 2009,” the report points out.
The Apex survey also shows that important actions are being taken by governments in the Gulf region that will boost the construction industry even further. Among them: the government of Qatar will grant nearly US$ 900 million in loans to citizens of the country, by means of the Qatar Development Bank. The objective is to revive the real estate sector.
In Bahrain, the highlight is the construction of 600 new houses, which will count on private sector funding. Recently, the local government has made an invitation for private companies to participate in the action.
Another important aspect is the issue of transportation. In Oman, the Turkish construction company Makyol signed a US$ 325.5 million deal to build 126 kilometres of roads. Another large work in the region is the Qatar-Bahrain Friendship Bridge, with 40 kilometres of length, scheduled to start in 2010 at a cost of US$ 3 billion. The two countries have already set aside US$ 500 million of their budgets for the project.
Brazil
With regard to Brazilian construction material exports to the Gulf countries, the survey shows a retraction of 36.6% from January to July 2008 compared with the same period of 2009, a rate higher than that of total sector exports to the world, which was 24.35% during the same period. To Kuwait and Qatar, however, exports from Brazil showed positive results, having grown 42.2% to the former and 13.5% to the latter.
Apex Brasil analyst Ulisses Pimenta underscores that, despite these not-too-favourable results, in 2010, the Gulf countries are going to resume reasonable levels of growth, such as Qatar, which should grow 10%, and the United Arab Emirates and Saudi Arabia, which should grow approximately 4% each, according to data supplied by the International Monetary Fund (IMF).
He singles out the markets of the United Arab Emirates and Saudi Arabia as being important for Brazilian exports. The former, because it acts as a re-export hub to other countries in the region, and the latter, due to its large population and high birth rate, which are factors that favour the construction industry.
To Pimenta, access to Arab markets is a long-term issue. “You do not break into a market overnight, you must become acquainted with it first.” The analyst also calls attention to the strength of the domestic market in the Gulf countries, which has helped them to better withstand the crisis.
With regard to opportunities for Brazilian construction companies, Pimenta emphasizes the importance of investing in the region. “It is important for Brazil to invest in civil construction. It is a dynamic sector with lots of demand. Brazil needs to place its products on that market,” he finishes off.
*Translated by Gabriel Pomerancblum
