Package strengthens investment in popular product
Gazeta Mercantil 03/25/2009
The expectations around the housing package that is about to be announced by the Government strengthened the investment in a niche to which the construction industry was already aiming at: the low income market. After a year in which thousands of families moved up to the middle class, and of a crisis that must cause many people to reduce their expenses, the manufacturers of building materials have been investing in new lines of popular products to increase their portfolio. Deca, a producer of bathroom faucets and fixtures, for instance, is increasing the line aimed to such public; result of the performance achieved last year when it entered into a partnership with the building company MRV Engenharia, specialized in popular real estate, to develop items of lower cost for such undertakings. It was also because of the bet in the basic line that it won a public bid of the Government of the State of São Paulo, through the Housing and Urban Development Company (CDHU, in Portuguese), to furnish a project of 43 thousand new houses. A Company that has always tried to strengthen its mark through design and high quality standard, Deca now tries to increase the same outlines to cheaper products.
Also in the market of paints - that had a 15% fall in the sales in the first two months, according to the Brazilian Paint Manufacturers Association (Abrafati) - it is in the low income segment that the sector is hanging on to. Regulated by the Brazilian Technical Standards Association (ABNT) in the last years, the paint was divided into three classifications: economic, standard and premium, with prices that go, in average, from R$ 50 (US$ 21.7) to R$ 220 (US$ 95.7) per 18-liter can. According to Ferreira, the participation of the economic class in the sales increased from 35%, a year ago, to 40% today. Premium takes other 40%; and standard, 20%. At Universo, a São Paulo company, the investments in the last years were to increase the operations in the premium segment, in which it was not strong. The economic line, however, still represents 40% of the sales and it will be one of the drivers of the sales this year.