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

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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

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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

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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

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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%

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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

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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).

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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

21

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.

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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

54

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)

59

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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York,NY:PrinctonArchitecturalPress.

Apgar,W.,Calder,A.,Collins,M.,&Duda,M.(2002).AnExaminationofManufacturedHousingasaCommunityandAsset-BuildingStrategy.Areportoffordfoundation.Washington,D.C,:NeighborhoodReinvestmentCooperation.Cambridge,MA:JointCenterforHousingStudiesHarvard.

Baack,D.W.,Harris,E.G.,&Baack,D.E.(2013).InternationalMarketing.CA:SagePublications.

Bady,S.(1996).Buildersgrowbusinessthemodularway.ProfessionalBuilder,62-63.

Blismas,N.,Pasquire,C.,&Gibb,A.(2006).Benefitevaluationforoff-siteproductioninconstruction.ConstructionManagementandEconomics,121-130.

Bouillon,C.P.(Ed.).(2012).RoomforDevelopment:HousingMarketsinLatinAmericaandtheCaribbean.NewYork,NY:PalgraveMacmillan.

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

Chiang,Y.H.,Chan,E.H.,&Lok,L.K.(2006).Prefabricationandbarrierstoentry-acasestudyofpublichousingandinstitutionalbuildingsinHongKong.HabitatInternational,482-499.

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Evans,C.(1990).Aguidetoexportingsoildwoodproducts.ForestProductsDivision,USDA.

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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McBride,B.,&French,M.(2011).AffordableLandandHousinginLatinAmericaandtheCaribbean.Nairobi:UN-Habitat.

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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: gustavo.romero@trade.gov

Phone: (51) 967-719-127

Contact: Erickson Rafael, Commercial Assistant

Email: erickson.rafael@trade.gov

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

erodas@inconstructora.com.pe

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

Shuaman@vivienda.gob.pe

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

cleon@promocasa.pe

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

jayllon@capeco.org

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

jpimentel@gmisa.com.pe

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/

70

9.2. MeetingagendaforQuito,Ecuador

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72

73

74

75

76

9.3. MeetingagendaforBogota,Colombia

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78

79