The construction sector has been faced with several challenges since the arrival of the pandemic. The price of inputs has been escalating since the logistics chain began to undergo changes due to the ravages in China, and although it has been recovering little by little, it is still far from reaching pre-pandemic levels.
(Homes in Providencia: this is what the consortium that built them says).
In addition, the exchange rate that has shown a devaluation of the peso against the dollar, which has added pressure on the cost basket of builders.
With all this panorama, companies have begun to tighten their belts to avoid a greater impact on their profit margin.
Marval is a clear example of this situation, for this reason, like other companies, they have reconfigured their business model.
In an interview with Portafolio, Sergio Marín Valencia, the company’s general manager, said that they are analyzing entering new markets, such as category 4, 5 and 6 municipalities and offering prefabricated homes in rural areas, as well as how cost optimization plays an essential role for the company.
How is the company doing with inputs that continue to rise in price? What are the materials that have touched the pocket of the firm the most?
We have seen that materials for housing construction such as steel, PVC, products derived from resins, coatings (wall and floor veneers), sanitary ware, cement and concrete have had a known rise in the market and has reached 80% in some products.
(Marval achieves a sustainability certificate for the Baviera project).
This is the result of the scarcity of commodities in the world and complemented by the increase in the exchange rate and labor.
All this translates into a 26% increase in the direct cost of housing production.
And how does this translate into the profit margin?
For this reason, in some projects that we have in development, there is no profitability and in some, there are no fees, this is aggravated by the high costs of funding the construction loan.
At Marval we are confident that inflation began to subside in the middle of this year, which will help improve this situation.
What strategies have you implemented to optimize costs?
Thinking about this, we are working every day to industrialize ourselves more to increase the productivity of the company.
Will the VIS offer go down?
In VIS housing we are already seeing a lower offer and fewer launches; it also launched the boost or slowdown given by the National Development Plan.
What planes will arrive in 2023, will they reach new cities?
In this 2023 we work to maintain the dynamics in the five regions and the 13 municipalities in which we participate, and we will launch new projects with sustainable characteristics that generate value and conscious urbanism.
Additionally, we are studying the regulations and the market to evaluate a participation in category 4, 5 and 6 municipalities. On the other hand, we are evaluating new construction systems such as prefabricated for rural housing.
What is your bet this year in terms of apartments?
Regarding housing designs, we are innovating to respond to the new generations of homes that have fewer members.
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Likewise, we design new proposals for single-person homes, families with pets and couples, who are groups that demand homes with different characteristics, want to make savings and homes with sustainability and innovation.
What new challenges come to the sector?
The biggest challenge we face as a sector is inflation and the dynamics of the economy.
This situation requires teamwork with all our stakeholders.
For these new challenges, the messages that the Government can generate to producers and plaintiffs are important and thus build trust.
How do you see the change from deindexing VIS housing to UVT or another mechanism? What implications would it bring?
In this regard, we consider that it is not convenient to de-index the Social Interest Housing (VIS) in this way from minimum wages or the amount due to the disproportionate increases in the costs of raw materials and labor that we have had, this will produce a imbalance of VIS by 12 points, this rule change would create a disincentive to bid.
PAULA GALEANO BALAGUERA