Peru to see double-digit growth this year

Peru to see double-digit growth this year
Published: 20 April 2011

Peru’s infrastructure deficit is proving to be a boon for the local cement industry. The Peruvian Construction Chamber (Capeco) estimates a deficit of 1.2 million housing units at the start of 2011, similar to the past two years. The Association to Foment National Infrastructure (AFIN) claims Peru needs approximately US$38bn of investment in the next five years in energy, sanitation and transportation infrastructure to ensure annual economic growth of 6% or more.

The two deficits, on top of forecasts of more than US$56bn in new mining and energy projects through 2020, is providing a further boost for Peru’s local cement sector which is growing at a marked pace, according to the Association of Cement Producers (Asocem).

Peru’s construction sector expanded 18% through November, according to the National Statistics and Information Institute (INEI), while overall GDP boomed by 8.8%. Cement consumption in November 2010 jumped 22.9%, to 754,422t compared to the same month in 2009, figures from INEI showed.

Last year cement dispatched from the seven companies with factories in Peru reached 8.1Mt, or 15.1% more than 2009, according to Asocem.

Pablo Nano, a sector analyst in the economic research unit of the Peruvian branch of Canada’s Scotiabank, says the cement sector should expand by double digits in 2011. However, the bank’s research unit is forecasting expansion by 12% in the first quarter of 2011, slower than in the corresponding period of 2010. The slight decline is due primarily to a slowdown in government investment in infrastructure projects as president Alan García’s five-year term winds down.

Peru’s cement companies are operating at full capacity and all the major players are growing with new or expanded plants, reports Asocem. It claims that investment in new or expanded plants will top US$1bn over the next 12-18 months.

(Edited report: LatinFinance)