Oil and Steel Heat up Sales

Industrial expansion, a booming economy and new jobs spur new developments in once unattractive municipalities.

Growth in construction and in the real estate market hasn’t only been taking place in the city of Rio de Janeiro. The economic boom, especially in industries such as steel manufacturing, metallurgy, and oil, has led companies and manufacturing plants to expand to other areas as well. According to Secovi-RJ’s 2010 Panorama, “municipalities that once attracted little interest from construction companies such as São Gonçalo, Nova Iguaçu, Duque de Caxias and Belford Roxo, attracted investments and registered rates similar to those seen in the areas in the north of the city (zona norte).” In other words, we are seeing an average increase in property values, from 2009 to now, of 50%.

The construction company W3 Engenharia, for example, has put a residential development in São Gonçalo that is currently in the final stages of construction up for sale. This month they also opened the mall Central Park Shopping in Campos with parking spaces for 300 vehicles. “It will be in the center of the city, in the main square,” says Ivan Wrobel. “Campos is the flavor of the month because of oil industry investments being made there by Petrobras, by OSX and other companies. It will grow significantly over the coming years.”

“The Petrochemical complex of Rio de Janeiro, in Itaboraí, will generate of over 200 thousand jobs.” José Conde Caldas.

According to Caetano Sani, director of Brookfield Incorporações, NIterói “will also be significantly affected by the oil industry.” Last year the company launched iOffices, with 242 individual offices in the center of the city, on December 11th.  On January 1st 90% of the offices had already been sold. “Niterói has very high purchasing power,” he says.

José Conde Caldas, director-president of Ademi-RJ cites some projects that will impact the real estate market. Among them is the Petrochemical Complex of Rio de Janeiro (Comperj), in Itaboraí, which will generate over 200 thousand jobs and should be operational in 2014. Or the steel manufacturing partnership between Vale and Germany’s ThyssenKrupp, Companhia Siderúrgica do Atlântico (CSA), which started operations in the west of the city (zona oeste) in June last year. It takes up over 10 million square meters in the industrial district of Santa Cruz, and should generate intense activity in the nearby region. Lastly, he emphasizes the preparations for offshore oil exploration in the Santos Basin which will depend on support bases located in Itaguaí (RJ). “Just to give you an idea, the Campos Basin represents only a quarter of production from the Santos Basin,” he compares.

Maxen, a manufacturer of steel tubes that supplies the oil, gas and naval industries, for example, is looking for an area of 100 thousand to 120 thousand square meters to build a new manufacturing plant that will take up 16 thousand square meters, representing a R$ 40 million investment. Alternatives considered include the municipalities of Tanguá, Itaboraí and São Gonçalo, says Luiz Fernando Pugliese, the company’s president. The main objective is to respond to demand generated by Comperj without neglecting the naval industry’s tube manufacturing and installation needs.

Operations should begin in the second four month period of 2011 and the factory will be ready at the end of the year. The new plant should be responsible for directly generating approximately 200 to 300 new jobs, with employment for a total of up to 700 people. And the plan is to grow another 50% in five years.