Venezuela Infrastructure Report

Published 20 January 2015

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Venezuela Infrastructure Report

BMI View : Declining global oil prices, high levels of national debt and substantial inflation have all contributed to a further downgrading of our forecasts for Venezuela's ailing construction sector. Few new projects are coming to the pipeline and existing construction projects are often subject to extensive delays and rising debts as costs of key supplies increase. Venezuela continues to present an unattractive foreign investment environment, and there is little scope for future growth unless fundamental economic and political reforms are enacted.

2014 saw Venezuela's construction sector shrink by an estimated 9.1% and our expectations for 2015 are little better, with a contraction of 5.4% forecast due to the narrowing project pipeline and scarcity of funding. We do not expect to see the construction sector exit recession until 2018, at the earliest, when growth will come in at under 1%. Venezuela is developing relationships with key allies such as China and, increasingly, Iran which are providing opportunities for companies from these countries. However, outside of these projects there are few enticements for foreign investors.

Key Developments And Forecasts I nclude:

  • Capacity utilisation at the country's steel and cement plants is very low, leading to a shortage in basic building materials; production at state run steel company Sidor dropped to a new historic low in 2014 with just 1.3mn tonnes produced (out of 5mn tonnes capacity).

  • Extremely high inflation continues to distort industry data, while a shortage in construction materials combined with expensive imports, is eroding real growth - we are factoring in above 20% inflation through to 2018.

  • Due to continuing business closures, soaring inflation, and a downgrade to our oil forecasts we have revised down our real GDP growth forecasts for the next several years. We now forecast real GDP to contract by 2.0% in 2014, and expand by only 0.8% in 2015 and 1.9% in 2016.

  • The government has announced...

BMI Industry View
5
SWOT
6
Infrastructure SWOT
6
Industry Forecast
8
Construction and Infrastructure Forecast Scenario
8
Table: Construction And Infrastructure Industry Data (Venezuela 2013-2018)
8
Table: Construction And Infrastructure Industry Data (Venezuela 2019-2024)
9
Transport Infrastructure - Outlook And Overview
16
Table: Major Projects - Transport
20
Energy And Utilities Infrastructure - Outlook And Overview
21
Table: Energy & Utilities - Major Projects
25
Residential/Non-Residential Building - Outlook And Overview
28
Industry Risk Reward Index
30
Venezuela - Infrastructure Risk/Reward Index
30
Latin America - Infrastructure Risk/Reward Index
31
Table: Latin America Risk/Reward Index
35
Market Overview
36
Competitive Landscape
36
Company Profile
38
Salini Impregilo
38
Table: Current Projects In Venezuela
40
Odebrecht
41
Table: Venezuela Projects
44
Global Infrastructure Overview
46
Global Industry Overview
46
Table: Construction Industry Value, Real Terms, % Change
47
Table: BMI's Top 5 Markets
51
Methodology
53
Industry Forecast Methodology
53
Sector-Specific Methodology
54
Risk/Reward Index Methodology
58
Sector-Specific Methodology
59
Table: Infrastructure Risk/Reward Index Indicators
59
Table: Weighting Of Indicators
60

The Venezuela Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.

BMI's Venezuela Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Venezuelan infrastructure and construction industry.

Key Benefits

  • Benchmark BMI's independent infrastructure industry forecasts for Venezuela to test other views - a key input for successful budgetary and planning in the Venezuelan infrastructure market.
  • Target business opportunities and risks in the Venezuelan infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Venezuela.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:

Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).

Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.

The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).

BMI’s Infrastructure Risk Reward Index

BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and  demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.

Market Overview

An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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