Dominican Republic - Building Products D.R. - Building Products
This is a best prospect industry sector for this country. Includes a market overview and trade data.
Overview
In the last couple of decades, the construction activity showed remarkable growth in the Dominican Republic, this reflects the substantial investment by the Dominican Government, as well as the private sector. According to information provided by the Dominican Republic Central Bank, the construction sector has been the most active and dynamic, with a growth rate of 12.2 percent for the last year 2018 and representing over a 10 percent of added value to the Dominican GDP.
| 2017 | 2018 | 2019 (estimated) | |
| Total Market Size | 593.0 | 648.7 | 669.1 |
| Total Local Production | 45.2 | 52.2 | 53.0 |
| Total Exports | 22.4 | 28.8 | 29.1 |
| Total Imports | 570.2 | 625.3 | 645.2 |
| Imports from the U.S. | 155.4 | 159.2 | 160.7 |
Unit: (Millions of U.S. Dollars)
Exchange rate: RD$50.30 – US$1
Sources: U.S. Census Bureau, Economic Indicators Division
Dominican Government investment in public works increased by 15 percent in 2018 when compared to 2017, over $800 million. The factors contributing to this growth are investments made by the Dominican Government in construction activity related to several mega-projects; including the several highways infrastructure systems, the elevating of several major avenues in Santo Domingo, second Metro line of Santo Domingo, the construction of 10,000 new classrooms, low-income housing projects nation-wide, and other infrastructure improvements.
Currently U.S. products enjoy an import market share of approximately 20 percent. We expect this share to maintain steady growth through 2019. US exports to the DR grew by 3 percent when comparing 2017 to 2018.
Best sales prospects, at least for the short term, include products used in the construction of low-to-medium cost housing, malls and commercial buildings; and public works mega-projects, such as highways, bridges and marine ports.
There is strong competition in this sector as companies from U.S., Asia, Europe and various Central and South American countries attempt to develop export opportunities. In order of importance, the main selling points for building products are: price, quality, and time to delivery.
The local building industry is open to foreign companies interested in selling their products in the Dominican market. The best way to enter the market is by finding a distributor who is familiar with the Dominican technical requirements and who can be as competitive and aggressive as the ones already working with other foreign companies.
Since the Dominican Republic is a member of CAFTA-DR, most U.S. manufactured goods enter the country at either zero tariff rates or at low tariffs which were largely phased out in 2017. CAFTA-DR thus gives U.S. companies as significant trading advantage over non-CAFTA-DR competitors. However, the openness of the market has not been fully favorable for the US companies, other countries has been aggressively entering the Dominican market, resulting in a significant increase in competition.
Leading Sub-Sectors
Located in a tropical climate, the Dominican Republic’s construction industry is not subject to seasonal fluctuations. With lower labor costs, the Dominican Republic’s homebuilding techniques and materials can differ somewhat from those used in U.S. as Dominican houses in the cities are primarily made of cement and block. Metal structures and pre-fabricated structures are starting to be more widely used. In rural areas, where incomes can be very low, houses are commonly made of wood and corrugated- galvanized zinc sheeting. It is interesting to note that in the past two years the Dominican builders are incorporating green building techniques.
In major cities, interior finishing represents a significant market potential for U.S. building products. Most houses have ceramic tile floors; some may use parquet or even marble floors for upscale building apartments that are popular among the upper-class in Santo Domingo.
Best prospect products include:
Heavy Construction Equipment (including used)
High-end aluminum/ wood doors and windows
Bathroom and kitchen fixtures
Wood lumber and wood products
Electrical fixtures
Lighting products
Plumbing (metal) and welding products
Roof products (sealers)
Asphalt mixtures
Steel products
Prefabricated structures
Hand tools
Opportunities
The local building industry is open to foreign companies interested in selling their products in the Dominican market. American products in general enjoy a very good reputation for quality and receptivity is high among those able to afford them.
Domestic Production
Local industry produces cement, cement block, concrete, concrete mixes, tiling, mosaics, paint, and steel bars “rebar”. In addition, there are locally manufactured PVC pipes and connectors, sanitary ware, tanks, wood doors and windows, metal windows and frames, fiber glass products, sanitary and gas installations, and some electrical accessories.
Construction firms targeting the middle- to upper- classes generally prefer imported building products because of the high quality.
Third - Country Imports
According to experts, building products from other countries especially those from China, Taiwan and Central/South America may not meet the same quality standards as American or European countries. Nevertheless, imported products from China and South America have the most presence in the market. Asian building products often have a price advantage for extremely cost-sensitive projects and are consequently widely used in government-funded projects such as hospitals, schools and low cost housing projects.
U.S. Market Position Share
The United States has maintained a considerable position in the Dominican market but has not been significantly increasing in the past years. However, the market still offers significant advantages to US exporters. Many local end-users/importers have expressed that numerous US companies have failed in following up with potential buyers, meanwhile suppliers from other countries are quite aggressive when applying their selling techniques.
Web Resources
Sheila Diaz de Andujar, Senior Commercial Specialist; sheila.diaz@trade.gov
Ministerio de Obras Publicas y Comunicaciones – MOPC – (Ministry of Public Works and Communications: http://www.mopc.gob.do
Colegio Dominicano de Ingenieros, Arquitectos y Agrimensores – CODIA – (Dominican Association of Engineers and Architects) http://www.codia.org.do