The construction sector in Brazil is a key contributor to GDP growth, with large cities located in all regions and a vast workforce available to operate in a rapidly expanding market. The construction market in Brazil offers key opportunities for the foreign multinational company expanding into Latin America.
The construction sector is not only responsible for construction operations alone, but for an entire chain connecting different types of service providers and suppliers. We explore opportunities emerging in the Brazilian construction market for businesses.
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Why do business in Brazil’s construction sector?
Brazil has one of the most skilled workforces in Latin America. In addition, it’s the region’s largest economy with the largest population. These elements present an ideal hub for expanding companies to develop their business in the region. From Brazil, companies then have the option for further expansion or trade with other key players in Latin America.
Therefore, the time has come to seek the best way to take advantage of the opportunity to operate in the construction sector in Brazil. Thus, companies looking to invest in this market must have the help of specialists and deep knowledge about the Brazilian business environment.
Architecture and Engineering
The streets of Brazilian cities like São Paulo and Rio de Janeiro display several modern and newly constructed buildings. But what is behind the final result?
The development of large construction projects in Brazil are based on innovative ideas from architects and engineers. However, in order to carry out such projects, there is a need for teamwork that only large architectural and engineering firms can carry out. And, with the increase in demand and the need for specialized and trained professionals and offices, the arrival of foreign offices in Brazil is already taking place.
Projects related to smart cities and buildings with sustainable appeal depend on specific technical knowledge. Cities like New York and London are home to a number of cutting-edge architecture and engineering firms that can expand their business to Brazil, since Brazil has a large market to be explored in this area.
Logistics
Logistics is another industry with enormous potential for performance in the construction sector in Brazil. Conducting engineering operations requires the implementation of a robust logistics plan that will support the construction work itself and issues that concern transportation and other facilities in the surrounding region.
Especially in large cities, the concern with logistical aspects in a construction project in Brazil requires trained professionals to work on issues related to the delivery of materials, traffic in the region and possible circulation restrictions, peak hours, among other relevant points.
Companies with deep knowledge in logistics in the field of construction that can address some of these challenges will have a competitive advantage over many of the current players in the Brazilian market.
Building materials
There are several opportunities to explore in the supply (manufacture and/or import) and sale of building materials in Brazil. Construction projects require the supply of a significant and varied range of products, which may include more specialized items.
There are several products that are subject to import by companies operating in Brazil’s construction industry. This includes raw material, such as steel, and products used in the finishing of a construction work, such as locks, taps, electrical switches and showers. Suppliers of these materials should consider their prospects in the largest economy in Latin America with a healthy construction market.
Solar energy
Increasingly, developments in the provision of heating in Brazil require supplies of solar energy. Brazil has a favorable weather condition for this type of technology, which has been consolidating for the past 15 years. One advantage of Brazilian solar construction projects, compared to the European or North American markets, is the fact that solar energy can be used in almost any region of Brazil during all 12 months of the year.
Consequently, the field is subdivided into the import and manufacture of parts and equipment, as well as the provision of maintenance and technical assistance services.
Another important and extremely attractive issue in the solar energy market is the fact that it brings great savings to the end consumer, which can reduce up to 95% of the electricity bill, compared to what would be paid in conventional heating systems.
Despite offering great business opportunities in solar energy production, Brazil still has very few big players in this market. For this reason, foreign companies have started to look at the Brazilian market as a possibility to pursue great construction projects in solar energy.
Information Technology
Information technology is a growing market in the construction sector in Brazil. In practically all phases of a project, it is necessary to use some specific IT software.
With detailed project scopes and the need to seek precise results, the use of 3D printers is increasingly common in Brazilian construction works. This type of technology is still scarcely used at a large scale, presenting a great opportunity for companies that have knowledge of this type of tool.
Another type of technology that is expanding in the construction sector is the integration of systems to make buildings more “intelligent”. IT intelligence optimizes and manages the systems of a building, just like an ERP software (Enterprise Resource Planning). This makes it easier and more functional to manage the structure of a building, including electrical, telecommunications, cabling and access elements.
For all these reasons, IT companies with specialization in construction will have a great chance of finding a market that is little explored and growing.
Enter the construction sector in Brazil with the help of local legal experts
Before you start doing business in Brazil, you should find the best accounting and legal experts for local support. With the right market entry strategy, your Brazilian expansion can achieve long-term success.
At Biz Latin Hub, our Brazil team offers comprehensive market entry and back-office services. We provide customized business solutions to suit your needs. To find out more, contact our Brazilian business experts here at Biz Latin Hub.
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