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Luis Valero

ECUADOR - Real Estate & Construction

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President, Constructora Valero


Luis Valero was born in 1955 and graduated from the Universidad Estatal de Guayaquil as an Urban Architect and obtained his Master’s in the Direction of Construction and Real Estate Businesses in 1996 from the Universidad Politecnica de Madrid. He is currently the President of Constructora Valero, having previously been Technical Manager of Compañí­a General de Construcción. In 2008, he was recognized as Architect of the Year by the Colegio de Arquitectos del Guayas.

"Ecuador offers plenty of opportunities for investors, and there is a wide availability of financial resources."

How has Constructora Valero sought to position itself since it was established over two decades ago?

We started operations 24 years ago, and back then we were just a family-run company that was developing construction work for friends. Over the next five years, we started growing, and little by little we entered the real estate business and handled small projects. We have always been a family-run business. During the economic recession that affected Ecuador in the early 2000s, we started working with the Municipality of Guayaquil, one of the most reliable public administrations in the country. From that moment on, we started handling key projects for the development of the city as well as re-urbanization and planning works in suburban areas of Guayaquil. Slowly, we also entered the real estate market in the city, and we have already constructed over 100 hectares of residential area. The construction sector has seen incredible growth over the last seven years due mainly to the adoption of a stable currency and the wider availability of financing from banking institutions at low interest rates. For example, in 2000, the interest rate for the construction sector stood at 22%, whereas today it is around 9.8%. In addition, the government has brought much desired political stability and a long-term vision, investing large amounts of capital in construction projects across the country as it benefited from the high oil prices. Today, the company operates in two main segments: public infrastructure works and our own real estate projects.

What are some of the main projects you are currently involved in?

Right now, we handle four different real estate projects: Castilla, Compostela, Cumbres del Sol, and Bosques de los Ceibos. Additionally, we are working on the Holiday Inn Hotel near Guayaquil Airport, as well as Guayaquil’s new prison building for 3,500 inmates. However, these are just some examples of our wide project portfolio.

“Ecuador offers plenty of opportunities for investors, and there is a wide availability of financial resources.”

Who are the main clients of the company?

Traditionally, we have targeted the middle to upper class; however, over the years, and thanks to our widening portfolio of projects, we are also increasing our range of clients. For example, in 2013 we will construct over 1,200 housing units for middle- to lower-income families. We build for all stratum of society including the government, municipalities, and private companies. The only segment we have not entered yet is maritime infrastructure, and we do not have plans to do so in the future, for we believe that it requires specialized staff, equipment, and machinery. In addition to all this, 80% of our customers work with the Social Security Institution when acquiring a housing unit.

What is the company’s business strategy to further expand its activities?

I would say that we are between the top five and top 10 in the market; however, the first three companies are one step ahead of the rest. It is difficult to reach such a level; nevertheless, we believe that by developing projects with value and high standards, as we have been doing, we will be able to keep growing.

What are the expected levels of investment for 2013?

We believe we annually contract projects worth around $50 million.

What environmentally friendly practices has the company adopted lately?

This is an issue that has gained relevance in recent years, and since we are also concerned about protecting the environment, we hired a specialist to train all our professionals. Such measures have strengthened our practices and commitment to protect the environment and apply better health and safety measures as well.

What is the size of your operations at the moment?

We have 1,800 workers in addition to 55 professional engineers and architects.

What measures should be taken to further develop the sector?

I think it is very important to set a clearer field of action between the public and the private sectors, as well as strengthen ties between both. I believe we can all learn from each other and make the construction sector a stronger industry in Ecuador. I think that the government is aware of that, and it is taking steps toward that. Additionally, further measures are needed to increase the housing offering for middle- to lower-income communities in society, especially for units whose price range stands between $15,000 and $20,000. Also, I think we must reduce bureaucratic burdens for these and other such projects, because these burdens increase construction costs.

What opportunities does the Ecuadorean construction sector offer to foreign investors?

Ecuador offers plenty of opportunities for investors, and there is a wide availability of financial resources. For example, we issued debt not long ago to raise capital, and we reached very optimum levels of capital. Ecuador has positively changed its image abroad and the government has played a key role in this process. Today, the rules of the game and fair competition are stronger than in the past. These steps have also contributed to strengthening business and legal security for investors.

Does the company have any plans to expand its activities to other geographic areas?

At the moment, we are working in five different cantons of Ecuador, and we are about to start a real estate project in Costa Rica—a large building in the La Sabana area. Also, we are part of a group of Ecuadorean investors developing a project in Cartagena, Colombia.

© The Business Year – July 2013



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