increasing exports of us wooden modular homes to ... · easily (woodworks, 2014; chiang, chan,...
TRANSCRIPT
CENTERFORFORESTPRODUCTSBUSINESSDEPARTMENTOFSUSTAINABLEBIOMATERIALS
IncreasingExportsofUSWoodenModularHomestoDeveloping
CountriesSystems.
GauravKakkarHenryJ.Quesada-Pineda
RobertL.Smith
PreparedfortheU.S.DepartmentofAgricultureFederal-StateMarketingImprovementProgram
GrantPeriod:September2014toSeptember2017
November2017
V I R G I N I A T E C H
i
TableofContents1. Acknowledgements.............................................................................................................................iii
2. Executivesummary.............................................................................................................................iv
3. Introduction.........................................................................................................................................5
3.1. Useofwoodinconstruction........................................................................................................6
3.2. Whatissystembuiltwoodconstruction......................................................................................7
3.3. TypesofSystembuiltconstruction..............................................................................................8
3.3.1. Prefabricatedsystems..........................................................................................................8
3.3.2. Panelizedsystems.................................................................................................................8
3.3.3. Modularsystems..................................................................................................................9
4. Literaturereview................................................................................................................................10
4.1. CurrentstateofindustryintheUnitedStates...........................................................................10
4.2. HousingmarketofdevelopingcountriesinSouthandCentralAmerica...................................14
4.3. SystemBuiltwoodconstruction:Driversforfuturegrowth......................................................17
4.4. Exportingsystembuiltwoodenhouses......................................................................................18
4.5. Barrierstotheindustrializationofwoodconstruction..............................................................23
5. Methodologicalaspects.....................................................................................................................27
5.1. Motivationforthisresearchproject..........................................................................................27
5.2. Objectives...................................................................................................................................28
5.3. Methodology..............................................................................................................................28
5.3.1. Objective1:Identifyincentivesandbarriersforsuccessfulimplementationofexportingprefabricatedwoodhomestodevelopingcountries.........................................................................29
5.3.2. Objective2:Identifyfactorsdifferentiatingexportingfirmsfromnon-exportingfirmsandbarriersofexportingsystembuiltwoodconstruction.......................................................................32
5.3.3. Objective3:Establishandvalidateexportassessmentmodelusingresourcesavailability,capabilityandexportventurestrategyinsystembuiltwoodconstructionindustry.........................36
5.3.4. Objective4:DevelopamarketingtrainingmanualforthesystembuiltwoodhousingmanufacturersintheUnitedStatestoexporttoselectedcountries.................................................43
6. Results:MarketopportunitiesforUrbanSocialhousinginPeru,ColombiaandEcuador.................45
6.1. Lima,Peru...................................................................................................................................45
ii
6.2. Bogota,Colombia.......................................................................................................................47
6.3. Quito,Ecuador............................................................................................................................51
6.4. Summaryoffindings...................................................................................................................53
6.5. Surveyresults.............................................................................................................................55
7. Thewayforward................................................................................................................................59
7.1. SpecificRecommendations........................................................................................................60
8. References..........................................................................................................................................64
9. Appendix............................................................................................................................................67
9.1. MeetingagendaforLima,Peru..................................................................................................67
9.2. MeetingagendaforQuito,Ecuador...........................................................................................70
9.3. MeetingagendaforBogota,Colombia......................................................................................76
iii
1. AcknowledgementsThisreportwasproducedunderthegrant14-FSMIP-VA-0014throughtheUSDepartmentofAgricultureandtheFederalStateMarketingImprovementProgram(FSMIP).TheworkwasalsopossiblethroughadditionalfundingandsupportbytheDepartmentofSustainableBiomaterialsandtheCenterofForestProductsBusinessatVirginiaTech.
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2. ExecutivesummarySustainablehousingisoneofthefundamentalnecessitiesforsocio-economicdevelopment.Yet
aconsiderablepopulationofthedevelopingworldislivinginsubstandardhouses.Ontheother
hand, developed countries like theUnited States have substantially improved the residential
constructionsectorbyengineeringnewmaterialsanddevelopingefficientsystems.
Thisstudyattemptstolinkthissupplycapacityofthesystembuiltwoodconstructionsectorin
theUnitedStatestourbanlow-incomehousingmarketsintheLatin-Americanregion.Expansion
to newmarkets and diversification to new products can rejuvenate this industry in the U.S.
Linking the manufacturer with potential buyers overseas would need efficient production,
logisticsandmarketingsystems.Thisresearchisfocusedonproductdevelopmentforbottom-
of-the pyramid buyers to give them an affordable yet sustainable alternative to traditional
systems.Interviewsandsurveytoolswereusedtoassesskeyaspectsofhousingdeficitsintarget
demographics of the South and Central American regions. System built wood construction
manufacturers in the U.S. were assessed to identify barriers and incentives for
internationalizationandhowtheydifferfromexportingtonon-exportingmanufacturerswithin
thesameindustry.Findingsindicatethatdevelopingproductsforsocialhousingprogramscan
provideaccesstopotentialuntappedmarkets.Lackofexistingwoodconstructioninsomeofthe
selectedmarketsindicatesthepossibilityofresistancetoacceptancebutalsoassuresnolocal
competition. The learnings can also contribute to opening of new markets for exports of
prefabricatedwoodenbuildingsinotherhousingsectors.
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3. Introduction
TheconstructionindustryintheUnitedStatesisoneofthemajorindustriesinthecountry.In
2014, thesectoraccounted for3.8percentof theannualGrossDomesticProduct (Bureauof
EconomicAnalysis,2016).Overthepast15years,thesectorhasexperiencedfluctuationsand
endured a challenging time. Starting with a decent share of 4.5% in the year 2000, the
constructionsectorexperiencedafrenzygrowthwithflourishingoftheUSeconomyuntil2006.
ThesectorwasbadlyhitduringtheDecember2007-June2009recessionwithanetemployment
declineof19.8percent(Hadi,2011).Thelossof1.5millionjobswasthelargestdeclineamongst
thenon-farmindustries.Residentialconstructionwasthemostbadlyhitwiththeeffectstarting
almostayearbeforethestartoftheactualrecession.Themarketandconditionoftheresidential
industryhasimprovedeversincebutthisimprovementiscomingataconsiderablyslowerpace
(U.S.CensusBureau,2016).Asaresult,thecompaniesinthissectorneedtopreparethemselves
tofaceanysimilarmarketdisruptioninthefuture.Thedevelopmentofarobustbusinessmodel
withdiversemarketpenetrationcouldbeoneoftheoptionstogrowandprepareforanysimilar
catastrophe(Baack,Harris,&Baack,2013).
Basedonthemethodofbuilding,thewoodresidentialconstructionsectorintheU.S.isdivided
into two sectors namely the site-built and the factory built (also called system built) home
industries.Thereisaconsiderabledifferenceintheshareofmarketbetweenthesesectors.Site-
builtresidentialconstructionessentiallydominatesthemarketcontrollingashighasa97%ofthe
marketsharein2014(U.S.CensusBureau,2016).Figure1showsthetrendofnewsinglefamily
homescompletedintheU.S.overaperiodof12years(1992-2014).
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Figure1NewSingleFamilyHomesCompletedinUnitedStates(1992-2014)
Inordertobetterinterprettheabovegraph,theaxisaresplitintotwogroups.Theaxisonthe
leftshowsthenumber(inthousands)ofthecompletedtotalandsite-builthouses.Theaxison
therightshowsthenumber(inthousands)ofthecompletedfactorybuilt(modular,panelized
andprecut)houses.Despitebeingtechnologicalmature,thefactorybuiltsectorhasyettomake
itsmarkintheresidentialconstructionmarketasdepictedinFigure1.Thisindicatesaneedand
possibleopportunityforthefactorybuiltsectortogrowandimproveitscontribution.Several
studies(Apgar,Calder,Collins,&Duda,2002;Bady,1996;Wherry,2009)suggestedaninherent
potentialinthefactorybuiltsectorforincreasingitsmarketshare.
3.1. UseofwoodinconstructionSixtypercentoftherawmaterialsextractedfromearthareusedinconstruction(Bribian,Capilla,
&Uson, 2011). From this volume, buildings represent 40% and the rest is infrastructure like
roads,bridges,andothers.Thesectoralonecontributesasubstantialshareinglobalresource
consumption.Butthisalsomeansthatthereisapossibleopportunitytoinnovateandimprove
thisusagebecauseconsumptionofnonrenewableandnon-replenishableresourcescanleadto
010203040
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devastatingeffectsontheenvironment.Woodisextensivelyusedasaconstructionmaterialin
manyparts of theworld becauseof its availability, cost, easeofworking, renewable nature,
attractive appearance, performance, and serviceability if built andmaintained properly. The
ConsortiumforResearchonRenewableIndustrialMaterials(CORRIM)groupshowedusingLife
CycleAssessment(LCA)ofwood,steelandconcreteframeshowingthatthenetCO2emissions
avoidedwhenusingwoodconstructionwas55metrictonswhilesteelandconcretehadahigher
carbon footprint with additional net CO2 emissions of 185 and 167metric tons respectively
(CORRIM,2004).Withresponsibleforestmanagementpracticesassuringasustainablesupply,
wood has been proven to be a better choice of constructionmaterial (Smith, 2010). Certain
concernslikefire,structuraldurabilityandmoisturedamagealwaysputwoodconstructioninan
inferiorspot.Badheatconductingnatureofwoodanduseofproperfirepreventionstructural
andnon-structural components in constructionassuresenoughsafety (Smith,2010).Building
design according to performance codes and timelymaintenance can assure better structural
performanceandpreventionfromanymoisturedamage.
3.2. WhatissystembuiltwoodconstructionConstructiontechnologyistheprocessofconstructingorbuildingaproduct,commonlyknown
asastructureandusingdifferentmaterials,methods,andequipment(Carswell,2012).Different
structurescanbeconstructeddependinguponthetypeofmaterialormethodbeingemployed.
Overtime,theconstructionindustryintheUnitedStateshasgrownanddifferentiateditselfinto
differentindependentbutfunctionalcategories.Thistransformationintheconstructionindustry
hasbeenrelativelyslowerascomparedtootherareasofengineeringandtechnology(Gianino,
2005).Thecentraltopicofanalysisforthisstudyisthesystembuiltwoodbuildingsconstructed
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majorlyinthecontrolledenvironmentofafacility.Thisisalsoknownasoff-siteconstructionor
factory built construction. Depending upon the extent of prefabrication, these off-site
manufacturedsystemscanvaryfromjustpre-cutandprefabricatedcomponentstopanelized
leadinguptofullyadvancedvolumetricmodularsystems.Factorymanufacturedcomponentsin
thesesystemsreplacesomeoftheon-sitelaborbuiltstructures.Theprocessismainlyfeasiblein
repetitive components of houses like, walls, floors, doors, and windows, etc. When these
structuresareassembledonthesite,itcanbeveryeffectiveinsavingtime.Thefollowingsection
discussesdifferenttypesofconstructionsystemsinthiscategory.
3.3. TypesofSystembuiltconstructionThisreportintroduces3differenttypesofmanufacturingtechniquesusedintheUnitedStates
forresidentialwoodconstruction.
3.3.1. PrefabricatedsystemsThisisthemostbasictypeofoff-sitefactorymanufacturingofbuildingcomponents.Thissystem
evolvedwith thewidespreadof lumbermillswhichstarted to supplyprocesseddimensional
lumbertothebuilders.Allofthecutting,dryingandprocessingisdoneinacentrallocationand
thensuppliedtothebuilderontheconstructionsite.Thebuilderwouldthenusethesetomake
walls, floors or roof systems. This system further gainedpopularitywith thedevelopmentof
engineeredwoodproducts likeStructural InsulatedPanels(SIP),trusses, I-joists(WoodWorks,
2014;WRAP,2007),etc.,whichrequiredmechanizedmanufacturingbyskilledlaborandcannot
bedoneeasilyontheconstructionsite.
3.3.2. PanelizedsystemsWith further development in factory manufacturing of wood products, the wood products
industry moved to assembling the prefabricated products into larger panels or complete
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assemblies.Thesepanelizedsystemscanbeengineeredaccordingtoconstructiondesign.Useof
computeraideddesignfurtherhelpsthemanufacturerstomanufactureexactdimensionsquite
easily(WoodWorks,2014;Chiang,Chan,&Lok,2006).Usingpanelizedsystems,completewall
panels,floor,androofsystemscanbedeliveredtotheconstructionsitereadyforassemblyand
installation.Somesystemscomeevenwithplumbingandelectric fittingssothat factorybuilt
systemsarenottampered.
3.3.3. ModularsystemsThisisthemostadvancedbuildingsysteminwhichtheentirehouseisdividedintoindependent
modulesduringthedesign.Thesemodulesarethenbuiltinafactoryonaproductionlinelike
anyothermanufacturingprocess.Controlledenvironment,skilledlabor,anduseofautomation
inconstructionmakethisoff-sitemanufacturingveryquickascomparedtoon-siteconstruction.
Thesemodulesarefittedwithalltheutilityfittingsandinsulatedproperlybeforetheyleavethe
facility.Somemodulesmightevencomewithinteriorfinishinglikecarpeting,kitchencabinets
andshelves,etc.Acompletemoduleistransportedtothejobsitewhereitwouldbeconnected
and sealedwith the rest of the structure to complete the building. This type of the building
systemhasamaximumamountofprefabricationrangingupto95%ofthetotalconstruction
workdoneoff-site.Inordertoassuresufficientsafetyanddurability,themodulesareinspected
at factoryduringconstructionandon-siteatthetimeof installationaswell.Thismethodcan
completeaproject inhalf thetimeascomparedto traditionalstickbuilton-siteconstruction
(WoodWorks,2014;Blismas,Pasquire,&Gibb,2006).
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4. Literaturereview
4.1. CurrentstateofindustryintheUnitedStatesTheresidentialhomeconstructionindustryintheUnitedStatesisextremelyscatteredbynature
(ProBuilder,2016).Thetop20giantconstructioncompaniesintheresidentialsectoraccounted
foronly17percentofthemarketshares.Thebottom100companiestogetheraccountedforonly
2%ofthemarketshares.Seventypercentofthemarketwasoperatedbythenon-giantsmall
companies(Figure2).Thisshowsthatthemajorityofthemarketisbeingoperatedbysmalland
mediumcompanies.
Figure2HousingGiantsMarketShare,2016
ProBuilder (2016) also highlights major challenges and opportunities identified by the giant
residential construction companies. Table 1 summarizes their findings in each of the two
categories along with the proportion of responses. Lack of skilled labor and increased
competition indicate that the construction companies need to diversify andmechanize their
process in order to stay competitive. This alsomeans that companies need tomove to new
Giants1to2017%
Giants21to757%
Giants76to1504%
Giants151to2252%
Giants226to2520.31%
Non-giants70%
11
market segmentswhich isalso seenasanopportunitybymostof themajor companies.The
companiesalsofeelthatitisimportanttoimprovetheoperationalefficienciesintheirprocesses.
Table1BiggestChallengesandOpportunitiesAnticipatedbyGiantCompaniesin2016
Challenges Opportunities Response
Proportion Response
ProportionAvailabilityofland 51% Operationalefficiencies 56%Scarcityofskilledlabor 51% Nichemarketopportunities 40%IncreasedCompetition 27% Marketexpansion 39%RisingHomePrices 19% Economicrecovery 28%GovernmentRegulations 15% Bettermarketing 28%
Carter (2015) reported a detailed analysis of the off-site construction industry in theUnited
States. A total of 717 businesseswere estimated to generate a revenue of $7.4 billion. Two
hundredandtwentysixmillionUSdollarsoutoftheserevenueswereexpectedfromexports.
Theexpectedprofits for the industry in2015were$161.8millionandthe industryshoweda
decentgrowthof4.9%fortheperiodof2010-15.However,thisgrowthisexpectedtoreduceto
2.3%inthenext5years.Itisalarmingastheauthormentionsthat“Despiteslowsalesgrowth,
theindustrywilllosegroundtotraditionalhousing.”Table2summarizesthecurrentstructureof
theoff-siteconstructionsectorintheUnitedStates.
Table2IndustryStructure:Off-siteConstructioninU.S.(2015)(Carter,2015)Factor Status Factor Status
LifecycleStage Decline Industryassistance LowRevenueVolatility Medium CapitalIntensity LowConcentrationLevel Medium RegulationLevel MediumTechnologyChange Medium BarrierstoEntry HighIndustryGlobalization Low CompetitionLevel High
12
Duetotheslowanddecreasinggrowthrate,thesector is inadecliningstageof its lifecycle.
Owing tomajor acquisitions andmergers posted since the 2008-09 economic downturn, the
sector isfairlyconcentratednowwithfewcompaniescontributingconsiderablytotheoverall
revenues.Thisalsomakesitharderfornewbusinessestoenterandcompeteatthetopofthe
sector.Despitetheusualbelief,the industry is lesscapital intensiveandmore labor intensive
because of the higher share of customized orders and the industry has a very low level of
globalization with limited trading across the globe. According to the Consumer Financial
ProtectionBureau (O'Hollaren,2017), themedianannualhousehold incomeofmanufactured
homebuyersisslightlyover$26,000.Thisisroughlyhalfthemedianincomeforfamiliesbuying
other homes. When traditional site-built homes drop in price and become more widely
affordable, demand for manufactured and modular homes declines because of consumer’s
preference of traditional on-site constructed homes. Suppressed conventional home prices
spurredmanyoftheselow-incomeconsumerstopurchasetraditionalhomes.Thesystembuilt
industry is thus consequently forced to price their products competitively. According to the
Census Manufactured Homes Survey (O'Hollaren, 2017), the real average price of a
manufacturedhomegrewata tepidannualized rateof1.5percentover the fiveyearperiod
before 2016 (latest data available). Combined with rising input prices, this trend has led to
decliningprofitmarginsforthisindustrialsegment(Carter,2015).
Thethreecompaniesinthesectorcontrollingmorethan45%ofthemarketsharein2015were
Berkshire Hathaway Inc. (28.0%), Champion Enterprises Inc. (10%) and Cavco Industries Inc.
(7.8%). In terms of product segmentation in 2015, 55.3% share was expected to be of
manufacturedmobilehomes,33.6%ofprefabricatedwoodbuildings(thatincludespanelizedand
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precutbuildings),andtheremaining11.1%wasnonresidentialmobilebuildings.Manufactured
mobilehomessharedthelargestfractionoftheproductsales.Intermsofmarketsegmentation,
60.3%of therevenuewasgenerated fromtheretail tradewheremostoperatorseitherhave
theirownstoresormarketdistributionchannelstomulti-brandstores.Incontrast,wholesalers
generated36.6%ofthissales.
Existing internationaltradeforthe industry isvery lowatamere3.1%oftheannualrevenue
(Carter,2015).In2015,thefactorybuilthomeindustryalonerecordedtotalexportsof$226.8
million(Figure3).SeventyfourpercentofitwastoCanadaandmainlybecauseofgeographical
proximity(Carter,2015).Japan,AustraliaandMexicotogetheraccountedforanother15.7%.The
remaining10.3%oftheshareisdispersedamongtherestoftheglobalmarket.Figure3shows
thedistributionofexportsandshareforeachcountry.Thisshowsthattheexportmarketforthis
productisstillinitsearlystagesofdevelopmentandtherecouldbeanopportunityforcompanies
manufacturingwoodenhomestoexploitexportmarkets.
Figure3ExportsofFactoryBuiltConstructionIndustry(2015)
Canada74%
Japan2%
Australia6%
Mexico9%
Other10%
Canada Japan Australia Mexico Other
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Thisalsoshowsthatthefactorybuilthomeindustryhasaverysmallshareinexportsascompared
tootherforestproducts.Thisisdespitethefactthatmanufacturingneedsconsiderablecapital
investmentinsettingupandmaintainingthefacility.Higher-valueaddedproductscreatemore
jobsandvaluefortheU.S.economyascomparedtolowvalueorrawproducts.Thusthereisa
needtofurtherpromoteandincreasetheglobaloperationsofthissectorinordertobenefitthe
economy.
4.2. HousingmarketofdevelopingcountriesinSouthandCentralAmericaHousing conditions strongly influence physical andmental health of the dwellers, education,
access to economic opportunities and vulnerability to social ills (Bouillon, 2012). Thus it is
extremelyimportantforpeopletohavesufficientandsustainablehousingataffordableprices.
SouthandCentralAmerica(includingtheCaribbean)areamongthehighlyurbanizedregionsof
theworld.Itisestimatedthatthisurbanpopulationwillgrowfrom75.5%in2010to84.6percent
in 2030 and match the likes of developed regions of Western Europe and North America.
(McBride & French, 2011). Urban cities attract jobs, investments, and people leading to the
growthoftheregion.Afastgrowingurbanpopulationwouldmeanincreasedneedofhousingin
the cities of the region but this becomes a major challenge in accommodating increasing
populationswithservices,employment,andshelter.However;themajorityofthecountriesin
SouthandCentralAmericahavenotbeenabletowithstandtheimmensepressureonthesupply
andcostofurbanlandandhousing.“Of130millionurbanfamiliesintheregion,5millionrelyon
anotherfamilyforshelter,3millionliveinhousesthatarebeyondrepair,andanother34million
live in houses that lack either title, water, sewage, adequate flooring, or sufficient space”
highlightsBouillon(2012).
15
Basedonthenatureandadditionaleffortsrequiredtoachieveminimumstandardsofdwellings,
housinggapscanbeclassifiedasquantitativeandqualitativeshortages.Quantitativeshortage
includes housing units that are damaged beyond repairs and are not suitable for living.
Qualitative shortages include households living in units with insecure tenure or illegal titles,
temporarystructure, inadequatesanitation,andovercrowding (Bouillon,2012,p.26;Rojas&
Medellin,2010).Bouillon(p.27,2012)alsoquantifiedbothofthesequalitativeandquantitative
shortagesintheregionofLatinAmericaandtheCaribbean.Table3summarizesthefindings.Due
toinequalityinhouseholdincomeintheregion,thepopulationsperquintilevaryalot.Asaresult
anddespiteofthemajorityofthepoorsufferingfromhousingshortage,mostofthehouseholds
thatfallinhigherquintilesexperiencehousingdeficit.Asreported,thepoorwithhousingdeficit
consistedof9.8millionhouseholdsbut32.3millionhouseholdsfacingdeficitintheregionwere
notpoor.
Table3RegionalHousingShortagesinLatinAmericaandtheCaribbean2009(PercentoftheHouseholds)(Bouillon,2012)
Urban quintiles by per capita householdincome
HousingGaps National Urban Rural I II III IV VTotalShortages 37 32 60 52 39 32 24 16QuantitativeShortages
6 6 5 9 8 6 5 3
QualitativeShortages
31 26 55 43 31 26 19 12
Table3highlightsaveragesoftheregionbutthisshortagedifferssignificantlyfromoneregionto
another.RojasandMedellin(2011)suggestedthatsinceeachcountryintheregionhasdifferent
socioeconomicandgeopoliticalstructures,sothat;theshortageshouldbetackleddifferently.
Figure4showsthepercentofhouseholdsinLatinAmericaandCaribbeanregions(Bouillon,2012,
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p.28).TheshortageismostprofoundinBolivia(75%)andislowestinCostaRica(18%).Sincethe
traderelationsofmostofthesecountrieswiththeUnitedStatesareamicableandsupportive
(Baack,Harris,&Baack,2013),themanufacturersandsuppliersofhousesintheU.S.canexplore
theregionasapotentialmarketopportunity.
Figure4.HousingDeficitbyCountries,2009(PercentofHouseholds)(Bouillon,2012)
Asapartofthisresearch,Peru,EcuadorandColombiawereselectedascandidatecountriesfor
conductinganassessmentofthepotentialimplementationofU.S.manufactured,systembuilt,
woodenhomes.Thesecountriesareselectedbecauseoftheexistinghousingdeficitintheregion
(Figure4).ThesecountriesthuscanprovideaconsiderablenewmarketsegmentwheretheU.S.
manufacturerscanexport.ThesecountriesalsohaveamicabletraderelationswiththeUnited
States through different trade agreementsmaking business transactions hassle free. Cultural
differenceisamajorbarriertoexports.Allthreeofthesecountrieshavesomesimilaritieswith
theUnitedStatesinasocio-economicculturethatwouldfurthersupportanybusinessendeavors
andproductacceptance (Baack,Harris,&Baack,2013). Lastly thepolitical structureof these
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countriesisfairlystabletosafeguardandsupportanybusinesstransaction.Withanattemptto
be environmental friendly, these countries are eagerly attempting to shift to decrease their
dependenceonnon-renewableresources(Stickney,2014).Thusitwasimportanttostudythe
governmentpoliciesregulatingsocialhousingprojectsintheregionandexistinguseofwoodin
constructionandidentifydifferentstakeholdersinvolvedinthesocialhousingvaluechain.
AlthoughprefabricationisamaturemethodofconstructioninmanyEuropeancountriesandin
theU.S.,severalcountriesinLatinAmericaarestillnotfamiliarwiththismethod.Becauseofthe
natureoftheirsocio-economicsystem,Latincountriestendtousemoreactualmanpowerfor
constructionsrather thanprefabricationmethods.Constructionmethodsthat requirea lotof
physicallaborsuchasmasonry,handpaintingorcast-in-placeconcretearecommonintheregion
(Brednoord, Lindert,& Smets, 2014). This gives companies in theU.S. a critical advantage to
manufacture and fulfill this housing demand in the region with the advancement in its
prefabrication systems and application of sustainable practices in wood construction. The
geographicalproximity,traderelationsandexistingbusinesscorridorswouldfurthersupportthis
endeavor.
4.3. SystemBuiltwoodconstruction:DriversforfuturegrowthWith aim to become efficient, communities all over theworld are under pressure to create
better-performing buildings that meet stringent codes and are cost effective. In addition,
consumers are demanding high quality and a reasonable price. But in a world full of
improvementsduetotechnology,manyconstructionsystemsseemtolagbehindintheadoption
ofinnovationandoffersolutionsthatstillfallshortofmeetingcustomerrequirements.System
builtconstructionthatincludesoff-sitemanufacturingofcomponentsinaclosedenvironment
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canassistnotonly inmeeting theabovementionedcriteriabuteven surpass them (Wherry,
2009). Mechanizationand industrializationofconstruction isgoodfor theeconomyas itcan
providesteadyyear-roundemploymentwithhigher-qualitybuilding.ManufacturersintheU.S.
canexplorenewmarketopportunitiesevenwithexistingproductioncapabilities.
Thekeyfeatureofsystembuiltconstructionandadoptionoffactorymanufacturingtechniques
in theconstructionsector isan improvement inprojectschedules (McGraw-HillConstruction,
2011). With optimized manufacturing processes, builders can achieve considerable
improvementsinthetimetakentocompleteaproject,includingreductionofconstructioncosts
by optimizing material use and reducing waste. In addition, there can be substantial
improvementsinsitesafetywiththemajorityoftheworkdoneinthecontrolledenvironmentof
amanufacturingfacility.Anotheradvantageisthatgreenandenergyefficientbuildingscanbe
constructedmoreefficientlywhenusingprefabrication.Finally,prefabrication inconstruction
canalsogivebuildersandarchitectsaflexibilitytouseawiderangeofmaterialsandworkwithout
any interruption by inclement weather conditions (McGraw-Hill Construction, 2011). As the
industrygainsmorematurity,thesefactorswouldfurtherencouragethebuilderstoadopthigher
levelsofoff-sitemanufacturingintheresidentialconstructionindustry.
4.4. ExportingsystembuiltwoodenhousesPre-manufacturingofhousesinacontrolledenvironmentandshippingthemtotheconstruction
siteisnotanewidea.TheU.S.,beingoneofthelargestproducersandconsumersofwoodfiber,
isperfectlypoisedtoleadtheglobalmarket.Butthisindustrializedwoodconstructionsectorhas
beenlosinggroundoverthepastdecadeeveninthedomesticmarkettoon-siteconstruction.
Consideringthisbackground,thesecompaniescouldexpandtonicheinternationalmarketsby
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developingspecificproducts.Theexperienceofmanufacturingfordomesticmarkets,efficient
buildingguidelines,availabilityofefficientdeliverynetworks,andfavorableinternationaltrade
treaties places the US manufacturers in a favorable position to export this type of housing
solution.
Economicproblemsfortheconstructionmarkethavebecomeaglobaltrend.However,evenas
theUnitedStatescontinuestogrowataslowbutsteadyrate,opportunitiesareemergingfor
internationalcontractorsindevelopingcountries,particularlythoserichinresources(Zhang&
Toppinen,2011).Atthesametime,theriseofconstructionactivityindevelopingcountrieshas
caused an increase in competition in the global market. Due to the instability of the global
economy,theinternationalconstructionmarkethasbeencontinuouslymarginallyshrinkingin
recent years. The Engineering News Report (ENR)’s Top 225 International Contractors list
indicates the global shift in the international construction market. The Top 225 as a group
generated $383.66 billion in 2010 contracting revenue from projects outside their home
countries,whichisslightlylowerthan2008’sfigureof$390billion(Reina&Tulacz,2011).Top
225’sregionalrevenuebreakdownsalsoindicatethatcontractorsareshiftingtheirfocustonew
andemergingmarkets.Internationalrevenuefell6.6%to$94.18billioninEurope.Italsofell6.6%
intheMiddleEastto$72.43billionand6.5%to$32.61billionintheU.S.Bycontrast,international
contractingrevenuerose25.6%to$34.05billioninLatinAmericaandintheCaribbean,6.7%to
$60.59billioninAfricaand4.7%to$76.64billioninAsiaandAustralia.Thisshiftinfocusisleading
toupheavalformajorinternationalcontractors(Reina&Tulacz,2010).Theshiftcouldbecaused
bythegrowthofminingsectorsandtheassociatedinfrastructurerequiredinthesecountries.As
atraditionaldevelopedcountry,theU.S.playsanimportantroleintheworld.Manyindustrial
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sectorsoftheU.S.leadtheworldeconomyandconstructionasoneofthesesectors.Withthe
development of internationalization and globalization, the construction industry in the
developingworld has becomemore involved in the internationalmarket. This is evenmore
important for residential constructionwheresuitablehousing isnot justa requirementbuta
necessity for living a quality life. Therefore, system built, wood housing manufacturers are
strategicallypoisedtotakeadvantageofthishugemarketshare.
Enteringnewanduntouchedmarketsisalsobeneficialforthesectorasinternationalizationand
exportscanprovetobestrategicallyimportantfortheU.S.manufacturingcompaniesasitoffers
accesstohighandstrategicallyconsistentmarketshareswithout investingheavily incapacity
improvement. The companies can keep using their existing facilities and manufacture for
internationalmarkets(Steinhardt,Manley,&Miller,2013).Thiswouldalsoincreasetheexisting
revenueshareforthesystembuilthousingindustryfromexports($226.8millionin2015).Getting
intoexportswouldalsoexpandtheexistingexportbaseoftheU.S.forestproductssector.
Exporting clearly requires a long-term outlook from the company. The decision to enter the
export market requires the manufacturer to commit sufficient managerial, economic, and
financialresourcestothetask.Table4highlightsthemajoractivitiesassociatedwithexporting.
Table4MajorActivitiesAssociatedwithExporting(Evans,1990)
STEP1ManagementCommitment
STEP2Analyzeobjectives,strengths,andweaknesses1.Short-andlong-termgoals2.Personnel
STEP3DevelopcontactsandcollectcurrentmarketinformationintheUnitedStates1.U.S.GovernmentandStateagencies2.Bankswithinternational
STEP4Conductmarketanalysis1.U.S.exportstatistics2.Foreignimportstatistics3.Currentmarket
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3.Resources4.Production5.Financing6.KnowledgeofexportMarketing
departments3.Freightforwarders4.Marineinsuranceagents5.U.S.portauthorities
developmentsandtrends4.Importbarriers5.Otherfactors(political,economic,geographic,andcultural)
STEP5Country/marketselection1.Demandpotential/trends2.Productidentification3.Standardsandspecificationsandtrends4.Languagerequirements5.Distributionchannels6.Businesspractices7.Tariffandnontariffbarriers8.Licensing/phytosanitaryrequirements9.Legalconsiderations10.Shippingcosts
STEP6Developmarketingapproachtargetedtoeverycountries1.Organizationofthefirm2.Determineproduction3.Contactforeignimporters4.Schedulemarketing/salestriptothecountryormarket
STEP7Tradeservicing1.Productdevelopment/modificationinresponsetochangesindemand2.Attentiontoimporter'sneeds/commitmenttothemarket3.Periodicvisitstothemarkettomaintaingoodcustomerrelationsanddevelopnewcontacts4.Refinemarketingapproach
Thus,eachcompanymustweightheadvantagesanddisadvantagesofexportingtodetermineif
projected profits, possible losses, and inherent risks justify management's commitment to
exporting. The analysis of previous research on exports of thewood housingmanufacturing
industryintheU.S.yieldedsomeimportantfindings:
• Themajorityofbusinessesinthisindustryaresmalltomediumsizedfirmswithannual
salesof$7.4billion(2015)andaprofitof$161.8million.Shareofexportsforthesame
yearwas$226.8million.
22
• Internationalizationwithin the industry is relatively low;mostmanufacturers operate
domesticallyandsellwithinarelatively limitedgeographicscope.Transportationcosts
cangoashigha10%oftotalcostoftheproduct.
• Asmentionedbefore, international trade for industryproducts isnegligible. Industry’s
performanceininternationaltradeisalsoimpactedbythelevelofinternationalizationin
upstreamindustriesasthisaffectstheavailabilityandpriceofwoodmaterialsforsystem
builthomemanufacturers.
• Findingsshowthatfirmsacknowledgethatexportsoffergrowthopportunities.However;
thereexistsvariouslegal,economicandpoliticalrisksassociatedwithdealinginforeign
countries.
• Productquality, customer relationsandcustomdesignare considered tobe themost
importantbusinesssuccessfactors.
• The companies that are currently exporting reported no negative impact of
internationalization on their domestic sales. But the share of exports as compared to
domesticsalesisverylimited.
• MajorityofexportscurrentlyaredonetoNorthernAsiaandthePacificRimregionsofthe
world.
• Companiesthatarenotexportingcurrentlyalsowanttoknowmoreaboutexportingtheir
products.
23
4.5. BarrierstotheindustrializationofwoodconstructionPrefabricated systems might have additional costs in the project like shipping, craning,
installationonsite,additionalmanufacturingandcompanyoverheads(Prefabitats,2016).Key
drawbackswiththepracticeofbuildingoff-siteare:
• Designlimitations:Despitetheeaseofworkingwithwood,thearchitectsandengineersare
limitedbythefeasiblemanufacturingconfigurations.Forexample,asimplerectangularwall
withparalleltopandbottomplatesisfareasiertoautomateandproduceinafactorythan
wallswithirregulardimensionsand/orslopedtops.Thereisalsoalimitationofdimensions
ofpanelsdue tomachineand transportationmediumrestrictions (Anderson&Anderson,
2007).
• Shipping:Theunits,irrespectiveoftheirintermediaryform,arerequiredtobeshippedtothe
constructionsite.Shippingcostsassociatedwithmodulesareconsiderablylargerthanthat
associated with panels and kits owing to the large size. This post manufacturing
transportation is generally limited by the medium of transportation, distance and route
followedandareoftenviewedasincrementalcosts(Chiang,Chan,&Lok,2006).Butitisalso
importanttonotethatnotallofthesecostsshouldbeconsideredadditionalasthetraditional
sitebuiltsystemalsorequiresrawmaterialstobedeliveredtosite.Thisincreaseinturnalso
limitsthesizeandscaleofmanufacturingoperations(McGraw-HillConstruction,2011).
• On-site installation: Prefabricated construction requires the use of cranes and associated
skilled laborat thetimeof installationonsite.Therequirementsandcomplexitydepends
uponthenatureofprefabrication;modular,panelizedorprecutalongwiththecomplexityin
eachdesign.Thecranesactasafixedcostandwhencoupledwiththecostsofhiringskilled
24
operators can act as significant incremental cost. Such heavymachinery is not otherwise
commonly implemented in an on-site traditional construction system. Degree of
prefabrication is an importantmetric in this system. It differentiates theamountofwork
completedinthecontrolledenvironmentofthefactoryandtheremainingamountofwork
doneon-site.Thecostfractionswillthendependuponthenatureandlocationoftheproject
(Anderson&Anderson,2007).
• Manufacturingoverhead:This is themajorfractionofmanufacturingcostwhich isusually
omitted when comparing with on-site construction (Prefabitats, 2016). Overhead costs
associated with the production facility like rent, depreciation, management, utilities and
insurance,safetyandqualitycontrolandunallocatedpersonnel.Thebestwaytominimized
these costs like any other manufacturing process is using economics of scale and scope
providedthereisapotentialmarket.
• CompanyOverhead:Theprefabricatedsystemscanbemoreexpensivethanthetraditional
construction because the manufacturing companies tend to keep considerably higher
marginsascomparedtotraditionalcontractors.Thiscanbetocovercorporateoverheads.
Thesecompaniesalsoofferbetterworkingconditions,assuressafetyoftheworkforceand
havedifferentdepartments(marketing,design,engineeringandprocurement)ascompared
togeneralcontractingfirms(Ludeman,2008).
• Negative perception of quality: Off-site construction even in the domestic residential
constructionmarketoftheU.S.iswidelyassociatedwithastigmaoflowqualitybuildingsthat
haveashortlifespanandwouldneedreplacement(McGraw-HillConstruction,2011).
25
• Fearofinnovation:Aswithanyothermatureindustrialsector,fearofchangealsoholdsback
theinnovationinconstruction.Buildersoftentrytoavoidusingsystembuiltcomponentsas
theyperceiveittobeinconvenientandexpensive(McGraw-HillConstruction,2011).
• Lackofinformationandunderstanding:Itisreallyimportantforallthestakeholders(clients,
developers, owners, designers, and engineering and construction professionals) to have
confidence and clarity of the approach to implement prefabrication. There is a deficit of
reliable information allowing owners and building professionals to make an informed
decisionwhileselectingaparticularbuildingsystemorapproach(Stickney,2014).
Inorder tobecompetitivewith traditional sitebuilthomes,prefabcompaniesneed tocover
incrementalcosts.Thiscanbeachievedbyusingeconomiesofscaleandscope(Baack,Harris,&
Baack,2013).Largescaleprovidescompaniesthebenefitsofreducedmaterial,shipping,craning
and site development costs. This also leads to a decrease in manufacturing and corporate
overheads.Theprefabcompaniescan invest inautomatedproduction lines,developmultiple
configurationswiththesamefacilities,andareductionininventoryandlaborcosts.However,all
ofthisispossibleonlywhenthereisenoughdemandinthemarket.Thiscanbeabitdifficult
whenonlyasinglemarketisbeingtargetedandnosinglelocationiscapableofofferingenough
volumeonitsown.Figure5givesaperspectiveofthefinancialperformanceofthis industrial
sectorin2015(Carter,2015).Afterahardhitbytherecession,atotalprofitofonly2.2%was
expectedinthefiscalyear2015andamajority(62.2%)oftherevenueisusedtopurchaseraw
materials. Surprisingly, the labor costs are considerably higherwhen compared to thewood
productssectoringeneralby7.4%.Thiscouldbebecauseofthelaborintensivecustomizations
whichmeansthatsmallerfirmshaveaninabilitytoinvest inmoreautomatedfacilities.Other
26
expenses included but not limited to rent and utilities are interest, general selling and
administrativeexpenses,restructuring,marketing,andlegalexpenses.
Figure5CostStructureoftheOff-SiteManufacturingIndustryin2015andComparisonwithWoodProductsSector(Carter,2015)
Despite the above mentioned hurdles, prefabricated companies are more capable of
incorporatinggreentechnologiesanddesigningmoreefficientbuildings.Thiscanbeachieved
through centralization and incorporation of design, engineering, procurement and
manufacturing making it a competitive advantage over traditional site built construction
technology(McGraw-HillConstruction,2011).
27
5. Methodologicalaspects
5.1. MotivationforthisresearchprojectSystembuiltwoodhousingalternativesbuiltintheU.S.havethepotentialtofulfillthehousing
deficitgap indevelopingcountriesbyexportinganaffordablesubstitutecomparedtocurrent
practices. Companies manufacturing system built homes in the U.S. can also substantially
improvetheirbusinessperformancebyexportingtothesepotentialoverseasmarkets.Butthere
aremanybarriersassociatedwithsuchaninternationalizationoperationoffactorybuilthomes
(Steinhardt,Manley,&Miller,2013).
Itisimportantthattheunitsaredesignedspecificallytofulfilllocalneedsandmatchrequired
standards in order to be successfully accepted in themarket. There is a considerable gap of
knowledgeinunderstandingthelocalregulatingpolicies,constructioncodes,potentialhousing
demandandsegmentation,culturalaspectsimpactingthedesignandarchitectureofresidential
constructionininternationalmarkets.Thisinformationwouldalsobeusefulinadjustingfeatures
toadapttolocalconditions,designingthemarketingstrategies,andmodeofintroducingsystem
built,woodconstructionsystemsinthetargetcountries(Baack,Harris,&Baack,2013).
ThiswouldgivemanufacturersintheUnitedStatesanopportunitytoexpandtonewanddiverse
marketsasmillionsoffamiliestrytosubstantiallyimprovetheirqualityofliving(Bouillon,2012).
Focusingonaffordablehousingwouldbeawin-winsituationwherethemanufacturerswould
getaccesstolargepotentialmarketsandanopportunitytoreducesocialinequalitybygenerating
new employments and the households can get an affordable alternative for the traditional
constructionsysteminforeigntargetmarkets.Thiswouldalsobebeneficialforthegovernments
28
oftargetexportcountriesthataretryingtopromoteenvironmentallysustainablealternativesin
theconstructionsector.
5.2. ObjectivesThis research is aimed at identifying potential expansion opportunities for system built wood house
manufacturingcompaniesintheSouthandCentralAmericancountries.Theexistingproductionchainwill
beevaluated to identify factors supportingorhindering thepossiblebusinessexpansion to theurban
social housing markets in Peru, Colombia and Ecuador. Such an alternative can act as a sustainable
(economicandenvironmental)alternativeforlow-incomehouseholdslivinginthesecountries.Thiswould
benefitboththemanufacturingcompaniesintheU.S.andthedeficitmarketintargetcountries.Following
arethethreeobjectivesofthisstudy:
1. Identify incentives andbarriers for successful implementationof exporting systembuiltwood
homestodevelopingcountries.
2. Identifyfactorsdifferentiatingexportingfirmsfromnon-exportingfirmsandbarriersofexporting
systembuiltwoodconstruction.
3. Establishandvalidatetheexportassessmentmodelusingresources,availability,capabilityand
exportventurestrategyinsystembuiltwoodconstructionindustry.
4. Developamarketing trainingmanual for the systembuiltwoodhousingmanufacturers in the
UnitedStatestoexporttoselectedcountries.
5.3. MethodologyCasestudies,personalinterviewsandsurveyswereusedtodoanexploratoryanddescriptiveanalysisto
assessexportmarketsforthesystembuiltwoodhouses.Thefollowingsectiongivesdetailofhoweach
objectivewasimplementedinthisresearch
29
5.3.1. Objective1: Identify incentivesandbarriers for successful implementationofexporting
prefabricatedwoodhomestodevelopingcountries.
Thisobjectiveaimedatunderstanding thepotentialopportunities forusing systembuiltwoodhomes
manufacturedintheU.S.asanalternativetotraditionalconstructioninthetargetcountries.Different
factors control the possible acceptance in themarket. Thus, stakeholders involved in the residential
constructionsectorwereinterviewedtoevaluatetheirviewsandunderstandingofwoodconstruction.
Interviews were conducted with government agencies regulating residential construction, builders,
suppliers,andconstructionprojectmanagers.Interviewsweredraftedtocoveressentialfeaturesofsocial
housingprojectsintargetcountries.Thesizeofthepotentialmarketsegmentthatcanshifttowooden
houses, if introduced through social housing projects, was accessed through different stakeholders.
Stakeholderswerealsoaskedabouttheirawarenessoftheuseofwoodinconstruction.Thequestions
were made from the factors identified through the literature review. Potential opportunities and
drawbacks associated with the residential construction market were also recorded. Short surveys to
accessawarenessaboutprefabricatedwoodconstructionamongthefourmajorstakeholders insocial
housingvaluechainfromthetargetcountrieswerealsoconducted.Theseweregovernmentagencies,
constructioncompanies/builders,projectdevelopersandrawmaterialsuppliers.
Activities:ForassessingtheurbansocialhousingmarketsindevelopingcountriesofSouthAmericawith
ahousingdeficit,Peru,ColombiaandEcuadorwereselected.Theselectionwasbasedonahighqualitative
andquantitativedeficit in these countries (IDB,2012)andeaseof gettingaccess to the stakeholders.
Stakeholdersinurbansocialhousingprojectswereidentifiedandcontactedtounderstandthenatureof
the targetmarket. The informationwas used to evaluate opportunities for U.S. manufactured wood
homesinthismarketsegment.Interviewswereconductedinpersonandanyrelevantdata/information
wasrecorded.Socialhousingprojectsiteswerealsovisited.
30
Methods used: Case studies, used for objective 1, are empirical forms of inquiry with a systematic
approachofinformationgathering.Thisapproachgoesbeyondpuredatagatheringbyincludingdifferent
approachesofinformationcollection.In-depthinterviewsweredesignedtogatherinformationabout,but
not limited to, the research problem. This generally involves recording life experiences and histories,
relateddocumentsandparticipant’sperception.Thispresentsanopportunitytobringoutthepotential
discrepancies or fallout related to the research topics which might be missed by other approaches.
Therefore,casestudiescanbeattributedtobeanefficientwayofdetailedandin-depthdatacollection
method(Berg,2004).
TheU.S. commercial serviceoffers “TheGoldKeyMatching service”where theyhelpU.S.agencies in
finding potential links to gain knowledge and access to overseas markets. This is done by arranging
interviews in advance with preselected stakeholders (International Trade Adminstration, 2016).
Structuredinterviewswereconductedtocollectinformationanddocumentdata.Representativesfrom
governmentagencieswerequestionedonthepolicyregulatingconstructionprojectsanduseofwoodas
a structural component. They were also asked about social housing programs supported by the
government,policiesdeterminingforeigninvolvement,andfuturestrategiesinthehousingconstruction
market.Thenextgroupwastheconstructioncompanies.Thisgroupwasvitaltounderstandthenature
ofnativeconstruction.Theyprovidedinformationoncurrentsocialhousingmarkets,consumertrends,
scaleand timelineof theprojectsandculturalaspects specifically relevant tocertain segmentsof the
market.TheycanalsoactasamediumfortheU.S.firmstoenterintothemarketsoftargetnationsinthe
future.Othergroupsthatwereinterviewedincludedregulatoryagenciesandnon-for-profitorganizations.
Financingagencieswerehelpfulinlearningabouttheprojectallotment,andmanagementprocedures.
Theintervieweeswerealsogivenanopportunitytoaddtheirownpersonalopiniononthetopicatthe
endoftheinterview.Theseinterviewsweredoneinpersonbyvisitingthecountries.Theinterviewees
wereaskedopen-endedquestionsinordertorecordtheirperspectiveofsocialhousingprojectsandthe
31
possibilityofusingfactorybuiltwoodhousingsystemsinfutureprojects.Informationaboutthepolicies
regulatinghousingforlow-incomehouseholdswasalsocollected.Existinghousingprojectswerevisited
tounderstandthetypicalfeatures,socialaspectsandscaleofsuchprojects.Error!Referencesourcenot
found.summarizestheapproachusedinthestudyforobjective1.
Figure2MarketAssessmentMethodologyusedforObjective1
Means of assessment: Since the interviews had overlapping questions, the information was cross
validated between different stakeholders. These interviews were documented, revised and validated
throughsecondarysourcesaswell.Adetailedsummaryofalltheinterviewswaspreparedthatwouldact
asaguidefortheU.S.manufacturingcompaniesattemptingtoaccessthesocialhousingmarketinthe
selectedcountries.
Limitations:Thedatacollectedwascountryspecificandcannotbeusedforothercountriesintheregion.
Someoftheinformationcollectedwaslimitedtoaselectedstakeholder’sperspective.Also,detailsofthe
projectparameters(design,cost,timeline,scale,etc.)wouldvaryfromonecitytotheotherevenwithin
acountry.
32
Expected outputs: Through this objective, an understanding of the nature and scale of prevalent
constructionprojectsusedsocialhousinginselectedcountrieswasexpectedtobegathered.Thiswould
beusedtocharacterizethemarketandevaluatepossibleexpansionsinthismarketsegment.
5.3.2. Objective2:Identifyfactorsdifferentiatingexportingfirmsfromnon-exportingfirmsand
barriersofexportingsystembuiltwoodconstruction.
Thisobjectiveaimedatidentifyingthedifferentiatingfirmlevelcharacteristicsamongexportingandnon-
exporting systembuiltwoodhousemanufacturing companies in theUnitedStates. Thepopulationof
interestforthisresearchwasthemanufacturersofsystembuiltwoodconstructionsystemsintheUnited
StatesclassifiedunderNAICS32199201,32199202,32199205and32199206.Asampleof1021firmswas
selectedrandomlystratifiedbyeachstate.ThecollecteddatawasanalyzedusingMann-Whitneytestsof
independence tosee if there isanystatistically significantdifferencebetween theexportingandnon-
exportingfirms intheUnitedStates.Thedatacollectedfromtheexportingfirmswasalsoanalyzedto
identifybarrierstoexport.
Activities:Thefirststepinthisobjectivewastodesignthequestionnaire.Thisinvolvesconceptualizing
questionsthatwillinturnbeusedtomeasuretherelationshipbetweenvariablesandeffectsbasedon
thetheoreticalframework(Dillman,Smyth,&Christian,2009).Thedesignedquestionnairewasthensent
tothesample1021firms.Thecollectedresponseswereusedtoassessthedifferencebetweenexporting
andnon-exportingfirms.Exportstatusofthefirmwasassumedtobeindependentcategoriesandthe
hypothesesweredesignedtotestdifferentdependentvariables.Sincethedatacollectedwasordinalin
nature,aMann-Whitneytestwasusedtostudythepotentialrelationshipandtotestthehypotheses.
Table5summarizehypothesescorrespondingtoeachcategoryaddressedinthesurvey.
Table5ListofHypothesesforObjective2
Category NullHypothesis Variable
ID Name
33
Number ofEmployees
H1: There is no difference between the averagenumber of employees working for exporting firmsandtheemployeesworkingfornon-exportingfirms.
VAR4 Employees
TotalSales H2:Thesales levelofexportingfirmsandthesaleslevelofnon-exportingfirmsarethesame.
VAR5 Sales
AgeofFirm H3a:Theaverageageofexportingfirmsandthatofnon-exportingfirmsisthesame.
VAR9 Experience
ValueofFirm H4a: The average value of exporting firms and ofnon-exportingfirmsisthesame.
VAR6 Value
Salesgrowth H5a:Theannualgrowthrateofexportingfirmsandofnon-exportingfirmsisthesame
VAR10 Growth
Busin
esss
uccessfa
ctors
H6a: Importance of product quality to exportingfirmsissameasthattonon-exportingfirms.
VAR16.1 Prod_qual
H6b:Importanceofproductavailabilitytoexportingfirmsissameasthattonon-exportingfirms.
VAR16.2 Prod_avail
H6c: Importance of product pricing to exportingfirmsissameasthattonon-exportingfirms.
VAR16.3 Prod_pricing
H6d:Influenceofrawmaterial’scostinfinalproductcost for exporting firms is same as that to non-exportingfirms.
VAR16.4 Raw_mat_cost
H6e:Influenceoftransportationcostinfinalproductcost for exporting firms is same as that to non-exportingfirms.
VAR16.5 Trans_cost
H6f: Importance of good sales team to exportingfirmsissameasthattonon-exportingfirms.
VAR16.6 Sales_team
H6g:Importanceofcustomerrelationsforexportingfirmsissameasthattonon-exportingfirms.
VAR16.7 Cust_rel
H6h: Importance of timely delivery for exportingfirmsissameasthattonon-exportingfirms.
VAR16.8 Time_del
H6i:Importanceofselectingagents/distributorsforexporting firms is same as that to non-exportingfirms.
VAR16.9 Sel_agent
H6j: Importanceofmarketexpansion forexportingfirmsissameasthattonon-exportingfirms.
VAR16.10 Mark_expan
H6k: Importanceofmarketingandpromotions forexporting firms is same as that to non-exportingfirms.
VAR16.11 Mark_promo
H6l:Importanceofaftersalesservicesforexportingfirmsissameasthattonon-exportingfirms.
VAR16.12 Aftr_sale_serv
H6m: Importance of on-site support for exportingfirmsissameasthattonon-exportingfirms.
VAR16.13 On_site_support
H6o: Importance of product modification forexporting firms is same as that to non-exportingfirms.
VAR16.14 Prod_magn
H6p: Importance of custom design for exportingfirmsissameasthattonon-exportingfirms.
VAR16.15 Custom_design
34
H6q:Commitmenttoexpandmarketsforexportingfirmsissameasthattonon-exportingfirms.
VAR16.16 Expansion_commit
H6r: Viewonexports as long term sustenance forexporting firms is same as that to non-exportingfirms.
VAR16.17 Commit_Export
H6s:Importanceofparticipationintradeshowsforexporting firms is same as that to non-exportingfirms.
VAR16.18 Trade_shows
The objective also aims to identify the major barriers faced by the system built wood housing
manufacturersintheUnitedStates.Sotherespondentswereaskedtoratethebarriersonascaleof1to
5anchoredatnotimportanttoextremelyimportant.Table6liststhebarriersexperiencedbyanexport
venture.
Table6BarrierstoExportingSystemBuiltWoodHousesfromtheU.S.
Barriers VariableID Name
Myproductisnoteasilyexportable VAR25.1 Prod_exportibilityDon’tknowmuchabouttheexportsandnotsurewheretostart VAR25.2 Export_knowI’dworryaboutgettingpaid VAR25.3 Payment_probRegulatorycomplexity VAR25.4 Reg_complexityUnawarehowtouseforeigntradeagreements VAR25.5 Foreign_trade_agreemDifficultytogetfinancingforforeigncustomers VAR25.6 FinancingItwouldtaketimefrommyregulardomesticsales VAR25.7 Effect_domestic_salesInsufficientprotectionofintellectualpropertyrights. VAR25.8 IPR_protectionToocostly VAR25.9 CostlyFindingonsiteworkforceinforeignmarkets VAR25.10Site_SupportDifficultyinfindingcustomers VAR25.11Finding_customerDifficultyonformingpartnershiporjointventureswithlocalbusinesses
VAR25.12Partnership_difficulty
Aftersalesandmaintenanceservices VAR25.13Partnership_difficulty
Methodstobeused:TheresponseswerecollectedthroughamailsurveyimplementedfromMarchtill
April,2017.Therewerethreewavesofresponses.Thefirstwaveofrespondentsfilledthequestionnaire
aftertheyreceivedtheirfirstcopyandmaileditbackwithin2weeks.Thesecondwaveoftherespondents
were thosewhorespondedafter receiving the reminderpostcard.The thirdwaveof responseswere
35
thosewhoreturnedthequestionnairessenttothemafter4thweek.Theyreceivedadifferentcoverletter
urgingthemtorespondtothesurvey.
Meansofassessment:Thefirststepbeforeusingthesurveydatawastoconductnon-responsebiasand
checkiftherespondentsfromallthethreewavesrepresentthesamepopulation.Non-responsebiascan
be assessed in different ways. Ratio of exporting and non-exporting firms and classification of the
respondents on the basis of the number of employees. Once it was determined that the pattern of
respondents inall thewavesarenotdifferent fromeachother, itwassafe toassumethat theywere
comingfromthesamepopulationandcouldbeusedasarepresentativesample.
The responses toall thevariablesused forhypothesis testing inTable5haveanordinal scale.So the
Mann-Whitneytestwasusedtodetermineindependencebetweentwogroupsandtestthehypothesis.
Mann-Whitney,beinganon-parametrictest,worksbymergingtwoindependentsamplestogetherfor
thepurposeofranking.Thesenumbersarethenrankedinanascendingorderandthesumofranksfor
eachgroupiscalculated.Justasanycomparisontest,thestatisticalsignificancelevelsaredeterminedat
certain Type I and Type II ????what??? represented by the σ and P-value respectively. The p-values
indicatestheassociationbetweenexportingandnon-exportingcategoriesforeachfactor. Instatistical
hypothesistesting,atypeIerroristheincorrectrejectionofatruenullhypothesis(a"falsepositive"),
whileatypeIIerrorisincorrectlyretainingafalsenullhypothesis(a"falsenegative").Thecomparisons
wouldbeusefultoidentifykeyfactorsthatdifferentiatetheexportingfirmsfromnon-exportingfirms.
Descriptiveanalysiswasusedtoanalyzeresponsesonbarrierstoexports.Theperceptionoftheexporting
firms on the factors impeding export operationswould in turn be useful in developing strategies for
purposedexpansiontolowincomesocialhousinginthisstudy.
36
Limitations:Basedonthenumberofresponses,therespondentsfromthesamplemaynotrepresentthe
actualpopulation.Lowresponseratecanreduceapplicabilityofstatisticaltestsandreliabilityofresults.
Thusinsuchcases,theresultscannotbeextendedandgeneralizedtorepresenttheentireindustry.
Expectedoutputs:Throughthisobjective,anunderstandingofkeydifferentiatingfactorsbetweenthe
exportingfirmsandnon-exportingfirmsinthesystembuiltwoodmanufacturingindustryintheUnited
Stateswillbedeveloped.Analysisofbarrierstoexportingwouldbeusefultoidentifykeyproblemsbeing
facedbytheindustry.Thisinformationcanbeusedbythecompaniestoselectivelyidentifyandinvestin
importantfactorswhileplanninganybusinessexpansionthroughexporting.
5.3.3. Objective3:Establishandvalidateexportassessmentmodelusingresourcesavailability,
capabilityandexportventurestrategyinsystembuiltwoodconstructionindustry.
Exportperformancemeasurement is important tobenchmarkandmeasureperformanceofexporting
firms.Thisobjectivemeasuredtheexportperformanceofexportingfirmsrecordedthroughthesurvey
andusetheinformationtovalidatethetheoreticalmodeltomeasureperformancedevelopedthrough
theliteraturereview.
Activities:Thesamplesurveyedinobjective2werealsoaskedabouttheircurrentexportstatus.Those
companies who were exporting or have exported system built wood homes in the past were asked
additionalquestions.
Methodstobeused:
Forobjective2and3,surveymethodologywasusedtoassessthesystembuiltwoodconstructionindustry
in theUnitedStates. Survey research is anobservational studyapproachwhere inferencesaredrawn
aboutthepopulationbycollectinginformationfromasampleusingaquestionnairedesignedbasedona
predefined problem (Babbie, 2010). This study approach needs definition of theories underlying the
problemphenomenon.With thebackground knowledge frompreviouswork anddeveloped theories,
37
hypothesis for the problem that are testable aspects of theories. From these hypothesis, research
questionsaredevelopedwhichareinturnusedtoformtheoreticalframeworktoguidethedesignofthe
survey.Thereisadifferencebetweenalistofquestionsandthesurveyquestionnaire(Dillman,Smyth,&
Christian,2009).Thesequestionscanalsobeintheformofstatementsuponwhichrespondentsareasked
whether they agree or disagree. Indexes and scales can be used tomeasure the degree of approval,
importance,andfrequency.Thequestionscanbedesignedusingtwodifferentapproaches:openorclose
endedquestions.Open-endedquestionsallowrespondentstoprovidetheirownopinionasananswer
butclose-endedasktherespondenttopickfromtheprovidedalternativesonly.Thuswhiletheformer
areidealtogatherin-depthinformation,thelaterareidealwhentheresearcherknowsandcaresonlyfor
responsesfromspecific,preselectedoptions.Intermsofanalyzingthecollectedresponsequantitatively,
theresponsestoopen-endedquestionswouldneedtobecoded.Responsestoclose-endedquestionscan
bedirectlyassessedquantitativelyusingitasnumericaldata.Bothcategoriescanbesingleormultiple
responses(Babbie,2010).Thisapproachofsurveyingisagainanobservationalnotexperimentalapproach
wherethestudysubjectsareobservedwithoutinfluencingthem,sameascasestudiesdiscussedbefore.
Thisisaneffectivewaytocollectdataasitcanbeself-administeredremovingtheneedofresearchersto
travel.Thisquantitativemethodisalsobeneficialwhentheinferencescanbedrawnaboutthepopulation
from a small representative sample selected without any bias. Surveys can be used to conduct
exploratory,descriptive,andexplanatoryorevenacombinationsofthesedependinguponthegoalof
studies(Blanco,2014).Exploratoryresearchisusefulwhentheaimistoincreaseunderstandingofthe
relevanceofatopicforthepopulationortoassessthefeasibilitytoconductalargerstudy.Descriptive
approachisusedtodescribecharacteristicsand/orbehaviorsofthepopulation.Explanatorysurveysare
conductedtounderstandthereasonthingshappen(Vaske,2008).
Surveydesign
38
The structure of the mail questionnaire focused on five key business dimensions impacting export
performanceoftheU.S.systembuiltwoodhousingindustry.Thesedimensionswereextrapolatedfrom
extensive literaturereviewfocusedonindustrydemographics, internalresourcesavailabletothefirm,
external factors impacting the firm, export venture strategy and export venture performance. These
dimensionswereaddressedthroughdifferentgroupofquestions.Thesequestionsweregroupedunder
demographic information,businesssuccess factors, transportationanddelivery factorsandbarriers to
exports.Thequestionnairewasdividedintotwosegmentsdifferentiatingtherespondentsintoexporting
and no-exporting firms. Only exporting firms were asked to respond to the latter two groups, i.e.
transportation and delivery factors and barriers to exports, along with additional demographic
informationforexportingfirms.Twotypesofquestions,namelycategoricalandfive-pointintervalscale,
wereusedtoassessthefivedimensionsofthequestionnaire.Thequestionnairealsohadanopen-ended
question to gather respondent’s opinion/remarks on exporting system built wood buildings. Each
questionnairealso includedan introductory sectionwithdetailsof thestudyand researcher’s contact
detailstosupportthecoverlettermailedalongthequestionnaire.
Thesurveyconsistedof26questionsgroupedinto5differentsections:namely“General information,”
“General Characteristics of the company,” “Business success factors,” “Transport and delivery” and
“Barrierstoexport.”Thefirstquestionofthesurvey,fromtheGeneralinformationsection,askedifthe
companiesdidmanufacturesystembuiltwoodhomestofilterrespondentsfrommanufacturerstonon-
manufacturers.Only respondents thatmanufacturewereaskedtocontinuewith thesurvey. “General
characteristicsofthecompany”had19questionsaboutthecompany5outofwhichwerespecificallyfor
theexportingfirms.“Businesssuccessfactorssection”had18sub-questionsthatallrespondentswere
requested toanswer. “Sectionson transport anddelivery section”andbarriers toexportwith13 sub
questionseachweredirectedspecificallyforthecompaniesthatexportorhaveexportedinthepast.The
last question of the survey gave respondents an opportunity to add their additional comments/
39
recommendationsforresearchers.Figure3showsthesurveydesignandimplementationstrategyusedin
thestudy.
40
Figure3SurveyDesignMethodology
41
Population
ThepopulationunderstudywasU.S.systembuiltwoodhousingindustry.Acompletecontactlistof3166
firms classified under NAICS 32199201, 32199202, 32199205 and 32199206 was purchased from an
industry directory (SICCODE.com, 2016). The classification 321992 under NAICS covers Prefabricated
WoodBuildingmanufacturingandthelisthadallthecompaniescollectedbythevendoruptillDecember
2016.
Sampleselectionandsurveyimplementation
Samplegroupmailing listwasderived fromthepopulation listby randomlyselectingone-thirdof the
companiesfromthepopulationlistforeachstatemakingitastratifiedrandomsampling.Thisledtoa
sample size of 1021 companies selected from the population list for the survey. The survey was
implementedonMarch21,2017throughfirstclassmailtoassessthedifferencebetweenexportingand
non-exportingfirmsandexportventureperformanceofexportingfirms.Implementationofsurveyisnot
just sending out the questionnaire, but should also look into tactics tomotivate the respondents to
participateandseethepotentialvalueoftheresearch(Dillman,Smyth,&Christian,2009).Thisinvolves
multiple aspects of visual design of the instrument, solicitation techniques and developing a proper
communicationstrategyduringtheprocesstoengagethesubjectsofthestudy(Blanco,2014).Dillman
recommendsafivestepsprocessforconductingmailsurveysandobtainingahigherresponse.Itinvolves
a)apre-noticeletter,b)questionnairemailing(withcoverletter),c)thankyoupostcard,d)replacement
questionnaire(withcoverletter)ande)afinalcontactnotice.Asimilarstrategywasemployedforthis
research.Eachoftherecipientsreceivedacoverletter,questionnairewithauniquetrackingnumberand
return envelope through traditionalmail or “snailmail.” The return envelope had first class pre-paid
postagetoencourageresponses.Auniqueidentificationnumberlinkedtoeachquestionnairehelps in
expeditingtheenvelopepackingprocess,aidresponsemonitoringandprovidesamethodforfollow-up
actionsonnon-respondents(Biemer&Lyberg,2003;Rea&Parker,2005).Acommunicationtimeline
42
was established according to the guidelines of Dilman (2000) for traditional mail contacts. The
correspondenceconsistedofthreewrittenformsofcommunicationsinatwoweeksperiod.Thefirst
correspondencewasthequestionnairewithcoverletterintroducingthestudyandapre-paidreturn
envelope. A two week reminder/thanking postcard was sent to all the sample. It thanked the
recipients who have already responded to the survey and requested the non-respondents to
participateaswell.Afteranelapseofanothertwoweeks,allthenon-respondentsweresentanother
mailingwiththesamequestionnaire,pre-paidreturnenvelopebutadifferentcoverletterremindingof
theimportanceofaresponse.Table7showsthecorrespondencetimelineintheimplementationofthe
mailsurveyusedinthisstudy.
Table7CorrespondenceTimelineforImplementationofSurvey
Correspondence Date TimeMarkCoverletterwithquestionnaire(1021intotal) March21st,2017 Day0Postcard(Thankyou/reminder)(1021intotal) April4th,2017 2weeksReminderlettertonon-respondents(Differentcoverletterwithsamequestionnaire)(977intotal)
April18th,2017 4weeks
Means of assessment: First part of this objective involved measuring the reliability of the variables
measuringfactorsaffectingexportventureperformancetobeusedforthemodelingprocess.Reliability
of the constructs can be checked by variousmethods. This study used Cronbach’s alpha coefficients
(Cronbach & Meehl, 1955). The second part of the analysis consisted of evaluating the relationship
betweenthedependentvariablesmeasuringexportventureperformanceandexplanatoryvariablesas
defined in the research design. The independence between these sets of variables were testedwith
Fisher’sexacttest(Agresti,2002).Thiswasfollowedbyperformingasimplelinearregressionbetweenall
theexplanatoryvariablesaltogetherandeachoneoftheresponsevariables.Contingencyanalysistotest
categoricaldata(Agresti,2002)wereconductedtoexplorethebehaviorofeachindividualvariable
43
and the potential relationships among them to assess the association between the responses and
factorsdevelopedfromthetheoreticalmodel.
Limitations:Powerofastatisticaltestistheprobabilitythatatestwillrejectthenullhypothesiswhenthe
nullhypothesisisfalse.Thetwomajorfactorsaffectingthepowerofastudyarethesamplesizeandthe
effectsize.Thus,insufficientsampleavailabilityhighlyrestrictsapplicationofstatisticaltests.Applicability
of thesestatistical testscan furtherbeconfirmedby theirconformity tests.Forexample, reliabilityof
regression analysis depends upon the regression coefficient. High regression coefficient (closer to 1)
indicateastrongerempiricalrelationshipbetweenthedependentandestimatingvariablesandviceversa.
Lowregressioncoefficientsobtainedwouldindicateinabilityofthemodeltopredictmeaningfulrelation.
Expectedoutputs:Exportventureperformancemodeldevelopedthroughthisobjectivecanbeusedto
measure the export performance on four financial and non-financial indicators using resources,
capabilitiesandstrategiesoftheventureasestimators.
5.3.4. Objective4:Developamarketingtrainingmanualforthesystembuiltwoodhousing
manufacturersintheUnitedStatestoexporttoselectedcountries.
Thisobjectiveaimedtodevelopasummarizedintroductoryandguidancemanualbasedonfindingsof
thisstudytobeusedbysystembuiltwoodbuildingmanufacturersintheUnitedStates.Thismanualcan
beusedmymanufacturersalongwithgovernmentandnon-profitorganizationsaimingtosupportand
expandthebusinessofUSmanufacturerstothemarketsofSouthAmerica.Thisreportisstructuredto
briefly introducethefeaturesofsystembuiltwoodconstructionintheUnitedStates.Keysegmentsof
thisreportincludetheresidentialconstructionmarketintheU.S.followedbybenefitsofusingwoodin
construction.Classificationanddiscussionofsystembuiltwoodconstructionintheresidentialmarketof
thecountryisanotherimportantfactortobeincludedinthereportforinformationofallthestakeholders.
Current internationaloperationsby thebusinessshouldalsobeanalyzedsince this studyalsoaimsat
44
assessingforeignoperationsandexportsofsystembuiltconstruction.Thereportwouldalsobeusedto
sharethefindingsofthisstudyofmarketassessmentofurbansocialhousingindevelopingmarketwith
stakeholdersinsystembuiltinthewoodconstructionindustry.Keyconclusionscanbedrawnfromthese
findings to identify need and key opportunities for the sector to grow in the international market.
Approachusedinthisstudywouldalsobeincludedtointhisreportsothatthestakeholderscanutilizeto
buildaviablebusinessplanbasedonthisresearch.
45
6. Results:MarketopportunitiesforUrbanSocialhousinginPeru,ColombiaandEcuador
ThissectionsummarizesthefindingsofthestudyfromthemarketanalysisconductedinPeru,
ColombiaandEcuador.Beingthefirstofitskindintheregionspecificallyforanalyzingmarket
opportunities for U.S. built prefabricated panelizedwood housing systems, the focuswas to
gathermacroinformationfromthemajorcapitalcitiesofthetargetcountries.Keyhighlightsof
policiesandschemesassociatedwiththesocialresidentialhousingarediscussedfirstfollowed
bycurrentsolutionsinthemarketbymajorconstructioncompanies.Thefindingsalsoinclude
highlightsofmajorfinancialandsupervisinginstitutionssupporting/monitoringsuchprojects.
6.1. Lima,PeruWiththeconstructionindustrybeingoneoftheenginesofeconomicgrowth,currenthousing
deficiencyisamajorconcernofthePeruviangovernment.Thereisadditionalpressureonthe
governmentasthecitiesexpandandthehouseholdsmigratetourbanareasinsearchofbetter
jobs.Thisalsoleadstoanincreaseinlandpricesindirectlyaffectingtheconstructioncosts.Most
ofthesemigratinghouseholdsarelowtomediumincomefamiliesthatmoveinsteadtoillegal
constructionsontheperipheryofthemajorcities.Figure8showsthetypesofhousescurrently
availabletolowincomehouseholdsintheperipheryofMetropolitanLima,Peru.
46
Figure8CurrentHousingSolutionsforLowIncomeHouseholdsinMetropolitanLima
Policy:TechoPropio/AdquisicióndeViviendaNueva(AVN)[OwnRoof/NewHousingAcquisition]
is an umbrella policy in place to support social housing projects. This program has been
implemented since2002with the aim to create a subsidizedhousingmarket for low-income
households.Thepolicyattemptstoresolvetheproblemofhighandincreasingcostsoflandand
construction,informalityandsocialinclusion.
Current status of residential construction: Brick and concrete are themost commonly used
materialsinconstruction.Prefabrication,bothinwoodandconcrete,isnotcommonlyusedin
residential construction.Despitedifferent supportprograms, thereareonlya fewbuilders in
Lima,Peruworkingexclusively in socialhousingprojectsdue to lackofprofitabilityusing the
current construction methods. Progressive housing is a common feature of low and middle
incomehouseholdsinthecountrywheretheystartwithaverybasicstructureandemptylot.
Thefamilybuildfloorsandexpandthehouseovertime.Despitethat,thereweren’tanyspecific
cultural/regionaldesign/architecturalrequirementsreported,thedurabilityandmaintenanceof
wooden buildings as compared to concrete buildings in the humid climate of Lima can be a
deciding factor. According to CAPECO (Chamber of Construction, Metropolitan Lima),
metropolitanLimaalonehadanexpecteddemandof443,544unitsin2014.Buttherewereonly
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27,952(6.3%ofthedemand)homesbuilt.Fiftypercentoftheunfulfilleddemandwasforthe
unitsbelowthesalepriceof40,000USD(ownershipcostincludinglandandconstruction).
Useofwoodasaconstructionmaterial:Theuseofwoodislimitedtonon-structuralapplications
only.Therearefewhighcostprojectsthatusedwoodforstructuralapplicationsbutthemarket
shareisverylimited.Thepolicyhasamajorroletoplayinregulatingtheuseofwood.According
to existing guidelines, only the indigenous species can be used as a structural component in
governmentprojects.Thereisaprovisiontoincludeforeignwoodspeciesaftergoingthrough
thetestingprocedures.GradesofmaterialsandguidelinesapprovedbytheU.S.agenciescould
beeasilyacceptedbythePeruvianregulatoryagenciesandcouldhelpspeeduptheprocess.The
interviewedstakeholderswidelyacknowledgedthebenefitsofwoodenconstructionintheform
ofbetterseismicresistance,lowerconstructiontime,andlowcost,environmentalfriendlyover
concreteconstruction.Woodconstructioncanalsobeusedasemergencysheltersintheremote
regionsofthecountry.Easeandspeedofbuildingaprefabricatedhousecanhaveanextraedge
overconcreteconstruction.
6.2. Bogota,ColombiaThe Colombian housingmarket varies from luxurious homes to temporary shacks with bare
minimuminfrastructure.Whilethereisawell-developedmortgagesystemtofinancehousing,
thelowincomehouseholdsstillfailtogethousesfromtheformalmarket.Asaresult,thissection
ofthemarketresortstoinformalconstruction.InBogotaalone,54%ofthehomesbuiltbetween
1993 and 2005 were built informally (Florian, 2011) which in itself varies in quality and
concentrationacrossdifferentpartsofthecity.
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Policy:Thestatedoesnotbuildhomesunderanyschemes,butencouragesandsupportsthe
privatesector.Proposalsforprojectsareinvitedonceaneedisdeterminedbythegovernment.
TheproposalsareexaminedandprojectsregulatedbyFindeter,a thirdpartymediatoranda
developmentalbank.Findeterisafinancialmanagementinstitutionforsocialhousingandisalso
involved inbudgetplanningeach year. Theproposal doesnot specify anymaterial ordesign
usage.Projectdesignshavetobeapprovedbythegovernmententity,“CuraduriaUrbana”before
it’simplemented.Thesehomesshouldbedurableandhardtobreakin.Despitehighgovernment
interest,onlyafewconstructioncompaniesparticipateinsocialhousingprojects.Returnsfrom
theprojectswerereportedtobehighlydependentonascaleofprojects.AsofMarch2016,the
housingpolicyinColombiahadfourdifferentschemestosupporthousingneedsoflowincome
households.
• MiCasaYA(MyHouseNow):Thisisashorttermpolicytosupporteligiblehouseholdswith
incomebetween2to4timesthecurrentlegalminimumwage(689,455ColombianPesoor
230 USD/month, 2016) to buy houses costing from 70 to 135 times the legal minimum
monthlywage.Theschemewasdesignedtobenefit130,000householdsfrom2015-2018.
Thesehousescanrangefrom16,100–31,050USD.
• VIS(AffordableSocialHousing):Thisprogramaimstobuildhousesunderthevalueof135
legalminimummonthlysalaries.Currently,ademandof77,000housesisestimatedinthis
program.Thispolicycovershousesunderthecostof31,050USDwithoutanyrestrictionson
selectionofbeneficiaryhouseholds.
• VIPA(PriorityInteresthousing):Themaximumvalueofhousesbuiltinthisprogramcannot
exceed70legalminimummonthlysalaries i.e.atotalcostunder16,100USD.Thistypeof
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housingtargetspopulationinextremepoverty,thenetwork“redunidos”,displacedtherural
populationbyguerrillas,anddisplacedcitizensbynaturaldisasters.Theaveragesizeofthese
homesis48m2.Theprogramaimstocovermorethan100,000householdsindifferentzones
(4,5or6)ofurbanareas.
• FondodeEstabilizacionde laCarteraHipotecaria(FRECH):FRECHisapublichedgefacility
supportingsocialhousing.Thebenefitprovidesreducedinterestratestoeligiblehouseholds
andactasastabilizationbuffertocounterinflation.
Thislimitingcostalsoincludesthelotcost(<53m2)whichgoesupto10%ofthetotalcostof
thesinglefamilyunit.Theallottedprojectmayincludeavailabilityofafullydevelopedsitewith
installedutilitylinesoritmayalsoincludesitedevelopmentasthebuilder’sresponsibility.
Currentstatusofresidentialconstruction:Thebuildingcodeisdesignedspecificallytowithstand
highseismicactivity.Theprojectsalsoneedtodemonstrateeffectiveperformancewithenergy
andwaterconsumptionefficiency,afocusedareaincurrentnationalSustainableEnergylaw.A
total of 19,758,964 m2 in area licenses were issued in the year 2015 for residential house
constructionoutofwhich25percent(4,971,147m2)ofthelandwasdedicatedtoVISprojects.
Themajority of the households that fail to get support from any of these schemes; prefers
progressivehousingasasolutionthroughself-helpprocess.Thisincrementalself-constructionis
majorfeatureofthelow-incomehousingmarketinBogotaaswell.Concreteincombinationwith
steelisthemostpreventconstructionmaterialinthenation.Shareofothermaterials,including
bricksisapproximately11percent.Everynewmaterialtobeusedinconstructionrequiresan
approvalfromtheColombianSocietyofEngineers.
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Use of wood as a constructionmaterial: Themajority of the interviewees reported lack of
expertiseforbuildingwithwood.Currentuseofwoodinconstructionispredominantlylimited
tonon-structuralapplications.Thisisalsoduetounavailabilityofgraded,ratedlumberandthe
negativeimpressionofwoodconstruction.Woodmaterialsareconsideredeitherforexpensive
construction projects or very low cost temporary housing. Three types of projects involving
woodenconstructioninColombiawererecorded.TECHO,nonprofitinternationalfirm,hasbuilt
1500units(6X3meters)inValleAurraregionofthecountry.Theseunitswerereportedtobe
importedfromChile.Programa“Aldeas”(Program“Village”)isoneoftheflagshipinitiativefor
socialhousingbyEPM,groupofcompanies located inCentralAmerica,Chile,Mexico,United
States,SpainandColombia,withheadquartersinMedellin,Colombia.Woodfromtheirprivate
plantationwasusedtodeveloptheproject.Theprojectaimstodeliver1400homesin3phases.
Along with poor families, they are also covering households relocated due to hydrothermal
projectsin6districtsoftheregion.
A foreign company can participate in the bidding process by demonstrating a construction
experienceofupto5yearsorbypartneringupwithlocalcompanies.Currenthousingprojects
for low incomehouseholds range from100 to 2000 dwelling units per project.With current
practices, at least 400 units are necessary to make a project profitable for the builder. Big
companiesalreadytendtosubcontractconstructionprocessesifdeemedfeasible.Thebuilders
preferverticalconstructiontoreducecostsbutthepeoplelikehorizontalconstructionmore.
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6.3. Quito,EcuadorThehousingdeficitinEcuadorisspreadacrossboththeruralandtheurbanpartsofthenation.
Housingconditionsvaryconsiderablyfromcitytocity,butunfortunatelythereisverylittledata
tocomparecitiesinEcuador,eitheramongthemselvesorwithcitiesoutsideEcuador.
Policy:TheconstitutionofEcuadorguaranteestherighttohousingwhichimpliesthatthestate
is responsible for ensuring that all its citizens are properly housed. But it’s not the state’s
primordialfunctiontoproducethenecessaryassetsandservices,butthestatewillguarantee
that societywill have the requiredmechanisms for accessing these assets and services. The
government’s basic role will be to motivate, channel, facilitate, regulate, set norms, and to
coordinatetheagentsengagedinurbandevelopment.Thegovernmenthastakenanenabling
role where instead of being directly responsible for producing the houses, it oversees and
correctsthehousingsectorasawhole.Inotherwords,thegovernmentenactsandenforceslaws
and regulations, corrects market failures, and provides institutional, technical, and financial
supporttothestakeholders,whilerelinquishingcontroloverthebuilding,lendingfor,buyingor
selling,owningorrenting,managingormaintaininghousesandapartments.Thisenablesthekey
stakeholders in the housing sector dwellers and communities, builders, lenders and local
governmentstoworkefficientlyandequitablytowardsmeetinghousingneeds.
Current status of residential construction: Evaluating the housingmarkets, despite the slow
economicgrowth, it is fairlyeasy for thebuyer to secure creditandgetahome.Progressive
housingisagainoneofthemajorfeaturesdefiningresidentialconstructioninlowandmedium
costconstruction.Thehouseholdexpandsthebuildingbothverticallyandhorizontallyonthe
samelotovertime.Thisculturalaspectisusedbythebuildersaswell.Sellingaunitwithbasic,
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minimumrequiredconstructionreducesthecost.Italsogivesthehouseholdanoptiontomake
acustomdesignedunitthatbestsuitstheirneeds.Oneofthecompaniesinterviewedduringthe
visithasveryefficientlyincorporatedmodulardesigntoallowfutureexpansionanddeliversunits
withdifferentfinishinglevelstokeepthecostsdown.
Thesocialhousingpolicyrequirestheunitcosttobeunder$40,000USDwhere15-20%should
beallocatedtothelandcostandrestisallocatedtothesitedevelopmentandconstruction.Many
companiesdevelopprojectswithunitsofmixedcostsrangingfrommediumtolowinorderto
assuretheoverallviabilityoftheproject.Thesebuildersalsopreferverticalconstructiontosave
on landcosts.But theconsumer stillprefersdetachedhomesorhorizontalhomes.Since the
currentuseofwoodislimitedwithlittlewoodworkingknowledge,thereisaneedtodevelop
marketing and promotion plans educating the stakeholders of the benefits of wood in
construction.
Useofwoodasaconstructionmaterial:Theuseofwoodismajorlyrestrictedtonon-structural
applications.Limitedknowledgeabouttheapplication,poorperceptionandavailabilityofwood
werefoundtobethemajorreasonsforlowutilizationofthisresourceinresidentialconstruction.
Despitelowcurrentuse,themarketsizeandpushtofindalternatingmaterialscapableofbetter
sustainingtheearthquakesprovidesanopportunitytopromotetheuseofwoodasastructural
componentinresidentialconstruction.ThiswasevidentfromtheincreasinguseofBambooin
residential construction of earthquake prone coastal regions. The perception to use it as
structural componentamong the low-incomeconsumerschangedsubstantiallyaftera recent
devastating earthquake in April 2016 in the south-eastern region of the country. But lack of
performancestandardsforbuildingwithBamboooranyotheralternatematerialwasamajor
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concernamongthebuildersanddesigners.Therearenoreportedrestrictionsontheuseofwood
in construction. There are agencies that can assist the companies in planning projects and
drafting proposals for the social housing projects. There is no restriction on participation of
foreigncompaniesprovidedtheprojectisapproved.Theawarenessofbenefitsofusingwood
andeducationandtheperceptionofusingitcanbeamajorhurdleintheEcuadorianmarket.But
thepush to find renewablematerials andarchitectural abilitieswhen supportedwith correct
programscanhelpbreakthistaboo.Thiswouldhelpopeningnewmarketsforwoodconstruction
ingeneralandprefabricatedwoodbuildingmanufacturersintheUnitedStatescantakethelead
inthismarket.
6.4. SummaryoffindingsThis study introduced the possibility of using a prefabricated wood construction system
developed in theU.S. to develop affordable alternatives to current construction practices in
urbansocialhousing.Table8summarizesfindingsacrossallofthethreecountries.Ashighlighted
beforeinthereport,pre-fabricationinbuildinghelpsinoptimizingconstructionbyreducingtime,
environmental effects, health and safety risks, building defects and its life cycle cost. The
technique also increases net productivity, whole life performance and net profitability. The
housingmarketdeficitofthestudiedcountriessummarizedshowsanopportunityforinnovative
techniques to fill the gap.Wood pre-fabricated housing systems can be one of the possible
alternatives. This generates an opportunity for such systemmanufacturers in theU.S. These
manufacturers can take advantage by developing custom products for each housingmarket
segment.
Table8.Summaryofthefindings
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Peru Colombia EcuadorIdentified housing deficit(fraction of totalhouseholds)
72% 37% 50%
Government’s concern totacklesocialhousing
Yes Yes Yes
Traditional constructionmethod
Blockandconcrete Blockandconcrete Blockandconcrete
Preferredbuildingtype Detached Apartmentbuildings (Up to 5floors)
Both detached andapartmenthomes
Averagefloorareaofsocialhousing(m2)
20-25m2 20-30m2 45-60m2
Sellingpriceofsinglefamilyhomes(USD)
$25,000-$45,000 $16,000-$32,000 < $40,000 (socialhousing)$40,000-$70,000(publichousing)
Profitability of socialhousingprojects
Average Belowaverage Average
Useofwoodinconstruction Non-structural Non-structural Non-structural
Buildingcodeforwood Absent Present PresentRestriction on usingimportedwoodspecies
Yes No No
Awareness of use of woodinconstruction
Limited Limited Limited
Social perception of woodconstruction
Poor Poor Poor
Otherprobablemarkets Mining displacementcamps and housing in hillyregions
Projects with lessthan250units
Coastal and highseismic proneregions
Duetotheurgentneedandlargescaleofprojects,socialhousingsegmentcanprovetobea
favorable segment. Existing trade channels and policies between the U.S. and these three
countrieswouldfurthersupportsuchexpansion.Themodeofentrydependsuponthelevelsof
corporatecontrol, internationalizationcostsandassociatedriskthatthecompanyiswillingto
maintain.U.S.pre-fabricatedsystemmanufacturerscangointernationalbyexportingstraightto
the local builders with or without using intermediaries. Direct exporting would mean least
55
investmentriskandcostsbutlacksthecontroloversupplychain.ManufacturersfromtheU.S.
canalsomakelongtermpartnershipswithlocalagenciestoformjointventureswithacertain
level of ownership. Local partners can be responsible for providing access to the residential
constructionmarket, site selection and development while the U.S. manufacturers could be
responsiblefordevelopingandmanufacturingthewoodhousingsystems.Thisentrymodewould
involvehighercostsofinternationalizationascomparedtoexports.Theriskoffailurenowwould
besharedbetweenboththepartners.Jointventureinvolvesformationofaseparatelegalentity.
Ifanyofthepartnersisnotwillingtodothat,thereisanoptionofformulatingstrategicalliance.
Itisverysimilartojointventuresbutdoesnotinvolveformationofaneworganization.Another
majorentrymode that thecompanies in theU.S. can take isbyestablishingawhollyowned
subsidiary.ButthiswouldrequiretheU.S.companiestocomplywithlocalrules,adjusttolocal
cultureandlanguage,accommodatetolocaleconomicconditionsandexpectsupportfromthe
localinfrastructure.
6.5. SurveyresultsAtotalof108responseswerereceivedfromthesurveyedsample.Thisrepresented10.6percentofthe
sample.Outof this response,only25of the respondents answeredpositive to the first questionand
continuedthesurveyquestionnaire.Onlytheseweretherespondentsthatreportedtobemanufacturing
system built prefabricated wood building systems. The rest of the respondents returned the survey
questionnairewithoutansweringanyotherquestions.Thusonlythesevalidresponsescouldbeusedin
analysis.Moreovertheseresponsesrepresentonly0.8percentofthetotalpopulationof3166companies
consideredinthisstudy.Lowresponseraterestrictedtheextrapolationofresultsandconclusionsfrom
thesampletothepopulationandlimitstheuseofresultsonlyasacasestudywithintheindustryinstead
ofanoverallrepresentation.
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LogCabinHomesandBuildingswerefoundtobeamostwidelymanufacturedproductlineamongthe
respondents. Fifty-two percent of the respondents reported it to be one of their products. This was
followedbyModularSystemswith28percentrespondentsmanufacturingthesystem.Precutandothers
categorywhichincludedMobileHUDhomesandstickbuiltconstructionwerebothreportedby24percent
oftherespondentsasoneoftheirproducts.Only16percentoftherespondentsreportedtomanufacture
PanelizedSystems.Table9summarizeresponsesofthesurveyacrossdifferentproductcategories.
Table9ResponseSummaryonDifferentConstructionMethods
ConstructionSystem
Numberofrespondentsineachcategory
Manufacturedby(Fractionofrespondents)
Meanlevel(S.D.) Medianlevel
Range
PanelizedSystem
4 16% 65%(43.56%) 75% 10%-100%
ModularSystem
7 28% 70%(28.28%) 50% 40%-100%
PrecutSystem 6 24% 48.33%(29.94%) 50% 10%-100%LogCabinshomesandbuildings
13 52% 83.08%(21.36%) 100% 50%-100%
Others(StickbuiltandMobilehomes)
6 24% 63.33%(31.41%) 55% 20%-100%
*Thesumoftotalrespondentsacross5categorieswillnotbe100%aseachrespondentcanbemanufacturingmorethanoneproduct.
Fortherespondingfirms,81percentoftheseconstructionsystemswerebuiltfortheresidentialmarket
andtheremaining19percentforthecommercialsectoronaverage.Themajority,with24percentofthe
respondingcompanieshad1-4fulltimeemployeesworkingforthem.Themediancategoryofthenumber
ofemployeesamongsurveyedcompanieswas10-19.Therewereonlytworespondentcompaniesthat
hadmorethan250fulltimeemployeesandonlyoneofthemhadmorethan500.
Onaverage,therespondentsreportedtobemanufacturing74unitsofhouseseachyearwithanoutlier
company that reported to be manufacturing 4000 units alone. The average size of units being
manufacturedbytherespondentswas2240sq.ft.rangingfrom1400ft2to6000ft2inarea.Manufacturing
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firmsinthisindustryarefairlyoldandexperienced.Eighty-threepercentoftherespondentcompanies
reportedtobeinbusinessformorethan20years.Only4percentofthecompaniesthatrespondedwere
younger than 5 years. In terms of growth, 45.5 percent of the responding companies reported to
experiencelessthan5percentannualsalesgrowthperyearoverthepastfiveyears.Themediansales
growthfortherespondentswasstill6to10percent.Mediandeliverydistancefortherespondents’ranges
from200-300milesandtheaveragetransportationcostincurredbythecompaniesthatrespondedwas
6.3percent.Contractualtruckingisthemostcommondeliverymodeusedbytherespondingcompanies.
Ninety-sixoftherespondentsusedittodeliveronaverage71percentoftheirproducts.Forty-fourpercent
oftherespondingcompaniesusedcompanytruckingtodeliveronaverageof27percentofthecustomer
orders.Customertrucking,railandothers(viasea)werenotwidelyusedmeansoftransportamongthe
respondents.Lessthan10percentoftherespondentsreportedtohaveusedthem.Interestingly,only24
percentoftherespondentswereeverinvolvedindevelopingproductsandparticipatinginthelowincome
housingmarketandalloftheseeffortswerededicatedtodomesticmarkets.
Onlythirty-sixpercentoftherespondingcompaniesreportedtohaveconductedanyexportatanypoint
of their business operations.When asked about interest to get into exporting to those that are not
currently exporting, 56 percent responded positively and wanted to learn more about international
businessexpansion.Forthecompaniesthatdidreportexports,theshareisquitesmall.Approximately90
percentoftheexportingrespondentsreportedtohavelessthan10percentoftheirtotalsalescoming
fromexports.TheregionsoftheworldthatarecurrentlyservicedbytheUnitedStatessystembuiltwood
construction sector were also inquired. Northern Asia and Pacific Rim reported the highest share of
exportsfromthisindustry.Table5summarizestheshareofexportstoregionsoftheworld.Thesumtotal
oftheshareherewillnotbe100percentasacompanycanexporttomorethanoneregion.
In terms of experience, the majority (55.6 percent) of the responding exporters have been in an
internationalbusiness forover20years.Close to twenty-twopercentof theseexporting respondents
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reportedtohavebeeninvolvedintheexportbusinessforlessthan5years.Wholesalers/distributorwas
reportedtobethemostcommonlyusedbytheU.S.companies.Closeto67percentofthecompanies
usedthismedium.Norespondentreportedtohaveasalesteamintheforeignmarketfordirectselling.
Onerespondentreportedtohavesolddirectlytotheforeignbuilder.Interestingly,noneoftheexporting
respondentsincreasedtheiremployeesormanufacturingcapacityspecificallytosupportexportactivities.
Table5ExportShareforEachRegion
Region Shareofexportingrespondents(Count)
Region Shareofexportingrespondents(Count)
NorthAmerica 44.4%(4) WesternEurope 22.2%(2)SouthAfrica 11.1%(1) EasternEurope 22.2%(2)SouthAmerica� 33.3%(3) MiddleEast 0%CentralAmerica� 44.4%(4) SouthernAsia
(India/Indonesia/Malaysia)22.2%(2)
NorthernAsiaandPacificRim(China/Japan/Taiwan)�
77.8%(7) Other� 11.1%(1)
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7. Thewayforward
• Increasethemarketshare
ThesystembuiltwoodconstructionindustryintheU.S.needstobettercommunicateitsvalue
toresidentialconsumers.Currentmarketsharehighlightsthisneed.Withoutthisaddedvalue
proposition,theindustrywilleventuallylosegroundtotraditionalon-siteconstruction.Product
quality,customerrelations,andcustomdesignwerethethreemostimportantsuccessfactors
fortheindustryinthisresearch.Thecompaniesshouldbuildontheseperformancemeasuresto
improvetheirmarketshare.
• Industrycollaborationandintegration
Oneofthekeybarriersthatwasidentifiedinthisresearchwaslackofsufficientcollaborative
efforts.Itisparticularnottojustthesystembuiltsectorbutalloftheresidentialconstruction
industry. Thiswas further supportedby thiswork that identified knowledge and information
relatedfactorspreventingforeigntrade.Themajorityofthecompaniessurveyedinthisresearch
lack required knowledge for using foreign trade agreements and associated regulatory
complexity.Difficultyonformingpartnershipandprovidingaftersalesserviceweretheother
twoimportantbarrierstoexports.Thecompaniescancometogetherandworkontheseissues
collaboratively with a comprehensive focus of improving long term acceptance both in the
domesticandinternationalmarket.
• Newmarketsandmarketsegments
Findings fromthe research indicate that the sectorneeds to increase itsmarket share in the
residentialconstructionmarketascomparedtotheotherdevelopingcountries inEuropeand
60
NorthAmerica.Itisclearthatmoreresearchanddevelopmentneedstobeconductedbothto
developproductandmarket.Thiswouldhelptheindustrytogainconfidenceofstakeholdersand
move to a widely appreciated technique. Some of the current requirements include further
improvingdesignandmanufacturingcapabilitiestodevelopcustomproductsbothfordomestic
andinternationalmarkets.Thecompaniesalsoneedtoinvestinresearchingnewandinnovative
waystoconveythebenefitsofoff-sitewoodconstructionandhenceconvincemorecustomers
touseit.
• Needforbetterguidanceandcommunication
Theindustryshouldworkondevelopingabestpracticesguidethatincludesalltheinformation
regardingperformance,quality,materialstobeused,dictatingconstructioncodesandbenefits
of projects preventing confusions of owners, professionals and associated jurisdiction
authorities. It is also important to have a consensus of all the stakeholders and use regular
communication during marketing, development and promotion of system built wood
constructionprojects.
7.1. SpecificRecommendations• Develop extensive programs and marketing strategies to introduce system built wood
constructionmanufacturedintheUnitedStatestargetedforspecificmarkets.Suchprograms
should be directed at informing and educating all stakeholders associated to the housing
market. This should includebutnot limited tobuilders, consumers, suppliers, government
officialsandpolicymakersaskeystakeholderswhowouldneedtobeinformedofthebenefits
of using off-site construction. This might include project demonstrations, information on
performanceofsuchsystems,educationalactivitiesanddevelopingpartnerships.
61
• Useexistingmanufacturingandexportofwoodhousingsystemsallovertheworldtodevelop
benchmarksandidentifybestbusinesspractices.
• Analyze social perceptions, current construction practices used in newmarkets or specific
market segments and use the information for developing custom design and production
systems.
• Demonstrate risks and returns of system built wood construction solutions compared to
traditionalconstruction.
• Developeasytousecustomguidelinesbothfordomesticandinternationalmarketsforthe
stakeholders to use and make informed decisions on incorporating system built wood
construction solutions into projects. It should include design principles, performance
guidelines,buildingstrategies,andprojecttimelinestobeusedastoolstosupportstrategies
andassociateddecisions.
• ProvideoverviewofmanufacturingandsupplycapabilitiesoftheindustryintheUnitedStates
tobeusedbyassociationsandtradegroupsinforeignmarkets.Thisalsoincludesdeveloping
longtermassociations.
DeveloplongtermplansforinternationalizationofU.S.manufacturing.Identifypartners,develop
associationsanddevelopaninvestmentroadmapaimingtomakeasuccessfulexportbusiness
model.
SpecificstrategiesthatcanbeimplementedinstudiedmarketofurbansocialhousinginPeru,
EcuadorandColombia
62
• Developawarenessprogramsbypartneringwithstakeholdersintargetmarketswithanaim
toeducateonthebenefitsofwoodconstruction.Theseprogramsshouldbedesignedand
implemented specifically for each of the stakeholders in the housing value chain to the
foreign market. Programs developed for government should aim at assisting policy and
regulatoryframeworkforusingwoodconstruction.Programsforconstructioncompaniesand
builders should intend to introduce principles ofwood construction as associated design
parameters used in residential construction in the United States. There should also be
programs for the final consumers to help improve the perception of use of wood in
construction. This can include but not limited to different demonstration projects,
development of education materials in the local language highlighting risks and returns
associatedwithprefabricationofwoodconstruction.
• Basedon the inputs fromstakeholders,developa roadmapwithkey indicators impacting
decisions to usewood prefabrication from the beginning to the end. This should include
development of custom design parameters depending upon the local environmental
conditions and selection of appropriatematerials. There should also be tools in place to
incorporateefficientcertificationsystems inplacetoassureuniformityandreplicability in
futureprojects.ThiscanbedonebyusingtheconstructioncodeintheU.S.andthatofthe
targetmarket.
• ThecompaniesintheUnitedStatesinterestedinexportingtothesemarketsshouldalsowork
closelytounderstandlocalbuildingcriteria,bidingstrategies,projecteconomicsandcritical
stakeholdersinthecompletevaluechain.
63
• Developproductperformanceparametersacceptableintheforeignmarket.Theseproduct
performancestandardsforstructuraltesting,serviceability,consumerperception,durability
andprotection,socialacceptability,energyandenvironmentalperformance,fireandseismic
performance,acousticperformanceandonsiteinstallationandaftersalesperformance.
• Since a single manufacturer in the U.S. might not be able to invest in all of the above
mentionedrecommendations,formationofaconsortiumoranassociationofthecompanies
dedicatedtoworkingcloselywiththestakeholders inforeignmarkets inmappingoutand
identifying key actors. The findings from interviews conducted in this study according to
agendasattachedcanactasaguidelineindraftingtheinitialplanning.
• The association ofmanufacturers in theUnited States should alsowork on developing an
overviewofexistingmanufacturingcapabilitiesandidentifymajorcompaniesthathavethe
capacitytoexport.
64
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Bady,S.(1996).Buildersgrowbusinessthemodularway.ProfessionalBuilder,62-63.
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Brednoord,J.,Lindert,P.v.,&Smets,P.(2014).AffordableHousingintheUrbanGlobalSouth:SeekingSustainableSolutions.NewYork,NY:TaylorandFrancis.
Bribian,I.Z.,Capilla,A.V.,&Uson,A.A.(2011).Lifecycleassessmentofbuildingmaterials:Comparitiveanalysisofenergyandenviromentalimpactsandevaluationoftheeco-efficiencyimprovementpotential.BuildEnviron,1133-1140.
BureauofEconomicAnalysis.(2016,March12).GrossDomesticProduct(GDP)byIndustrydata.RetrievedMarch12,2016,fromU.S.DepartmentofCommerce:http://www.bea.gov/industry/gdpbyind_data.htm
Carswell,A.T.(2012).TheEncyclopediaofHousing,2nded.ThousandOaksCA:Sage.
Carter,B.(2015).PrefabricatedHomeManufacturingintheUS.IBISWorld.Retrievedfromhttps://www.ibisworld.com/industry/default.aspx?indid=397
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Florian,A.(2011,0829).¿Paradondevamosenviviendasocial?Retrievedfromrazonpublica.com:http://razonpublica.com/index.php/regiones-temas-31/2352-ipara-donde-vamos-en-vivienda-social.html
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9. Appendix
9.1. MeetingagendaforLima,Peru
GoldKeyService
ScheduleofAppointments-Lima,Peru
VirginiaTechUniversity
Prepared for: Mr. Gaurav Kakkar, Virginia Tech University
Dr. Bob Smith, Head Department of Sustainable Biomaterials
Contact: Gustavo Romero - Commercial Specialist
Email: [email protected]
Phone: (51) 967-719-127
Contact: Erickson Rafael, Commercial Assistant
Email: [email protected]
Phone: (51) 947-033-261
Translator: Mariella Luna
Cell: (51) 997-978-804
Driver:
Cell:
Vehicle:
08:45 – 09:00AM Meet-up at lobby
Hotel Westin – Calle Las Begonias 450, San Isidro – Lima
Wednesday October 14, 2015
68
10:00 – 11:00 AM InGroup – InMobiliari / InConstructora
Av. El Derby 250 – Of.2001 Surco
Phone: (51)-1-615-3800 Ext.3914
Contacts:
Ing. Adolfo Molina, Ing. Alfredo Trabucco, Sr. Juan Carlos Alvarado
Erika Rodas, InConstrutora Secretary
Company Description:
InGroup (InMobiliari, InConstructora, InGerencia, ViBien) dedicated to the construction of residential, business, commercial and social housing projects like “Mi Vivienda” around Lima.
Web: www.inmobiliari.com.pe
11:30 – 12:30PM Ministerio de Vivienda, Construcción y Sanamiento
Paseo de la República 3361, Edificio Petroperú, San Isidro
Phone: (51)-1-211-7930 Ext. 1701
Contacts:
Arq. Lucia Ledesma – General Director for Programs and Housing Projects
Sonia Huaman, Vice-Ministers’ Secretary
Company Description:
Lead Government agency in the field of Urban Planning, Housing, Construction and Sanitation, responsible for designing, regulate, promote, monitor, evaluate and implement sectoral policy. Contributing to the competitiveness and sustainable territorial development of the country, benefiting preferably population with fewer resources.
Web: http://www.vivienda.gob.pe/
LUNCH
03:00 – 04:00PM PROMOCASA
Av. Mz. W2 Lt 8 Sector E-4 – Pachacutec, Ventanilla - Callao
Phone: (51)1-641-9475
Contacts:
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Julio Quispe – General Manager
Cesar Leon – Commercial Manager
Technical Staff
Company Description:
Promocasa with 11 years of experience on Construction has been involved in social housing projects working along with Government agency with “Techo Propio” and “Mi Vivienda” projects.
Web: http://promocasa.pe
CONFIRMED CAPECO (Friday 16th at 4PM)
Víctor Andrés Belaunde 147 - Edificio Real 3 - Of. 402 San Isidro - Lima
Phone: (51)-1-422-5566 Anex.216
Contacts:
Jose Luis Ayllon – Instituto de Construcción y Desarrollo President
Company Description:
CAPECO, “Construccion Peruvian Chamber” is an organization, grouping and representing firms that operate in the construction sector in Peru. With over 50 years of experience. Organizer for ExCon – Peru.
Web: http://www.capeco.org
CONFIRMED GMI S.A. (TBD in the morning)
Av. Paseo de la Republica 4667, Piso 7, San Isidro - Lima
Phone: (51)-1-213-5600 Anex.5843
Contacts:
Jorge Pimentel – Industry Division Manager
Company Description:
GMI, a leading Engineering Consultancy company, part of Graña y Montero Group. It has over 28 years of experience. Involved with multi-family residential house projects.
Web: http://www.gmisa.com.pe/en/
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9.2. MeetingagendaforQuito,Ecuador
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72
73
74
75
76
9.3. MeetingagendaforBogota,Colombia
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78
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