TBY talks to José Macchiavello, Executive President of Etinar, on the key to being successful in difficult times and the company’s major ongoing projects.
TBY What have been the some of the major projects Etinar has been involved with?
JOSÉ MACCHIAVELLO We have built the most important projects in Guayaquil, such as the Malecón 2000, Puerto Santa Ana, and Metrovia, which is a public transport system. Etinar built the main highway entrance to Guayaquil from the coastline, Avenida del Bombero. Currently, we are working on one of the terminals of the Metrovia, building most of the stations in the system. We have operations in Quevedo, and are building a new malecón (boardwalk). We are building the first important highway in Machala, and Etinar is also working in Manta on the new Refinery of the Pacific. The company has done many projects for both the government and private entities. For the private sector, we built City Mall, which is the second largest shopping facility in Guayaquil. We also constructed the Mall Del Sur, which is one of the largest. We built the Duran Outlet, which is a small mall in a city near Guayaquil. We have also been very innovative—we were the first constructors of a project with integrated residential space. Until 1992, nobody in Guayaquil would buy a finished house. Etinar completed the first residential complex with houses, clubs, swimming pools, and soccer fields. That was the first time in this city that somebody built that style of development. We were also the first company to build and develop a complex for lower-income families with security guards at the entrance, which was previously considered a luxury, even for the wealthy. We are now building complexes in Machala and Manta with around 1,800 units.
What has been the key to remaining competitive?
The most important factor is that we never spend money on luxury items. We devote a lot of money to savings and spend the funds we saved two years ago. Etinar has also been aggressive when the country goes into crisis. During the last crisis in 1998 and 1999, we were just beginning a building in Samborondón. We were up to the third or fourth floor, and had sold just one or two apartments. When the crisis hit the country, a lot of construction activity stopped, but I did the exact opposite. I started to work on Saturday and Sunday. I sold the entire building in less than five months during the crisis. All of the market came to us because people were afraid of buying in any other place. Etinar finished that building in approximately one year; while rival buildings that were under construction finished up to five or six years later. One of the keys is to be aggressive when you have to be aggressive, but also be very conservative when you have to be conservative.
What are the advantages of being based in Guayaquil?
In terms of housing units, Guayaquil represents around 40% of the entire country. This is higher than Quito and other cities. It does not have as many projects, but there are more units here. There are developments here that contain 5,000 houses, while in Quito the largest sites have just 500 units. The real estate sector is currently in a honeymoon period, which will eventually pass. That is why we have to be conservative.
What is Etinar’s position regarding international partnerships?
We have strategic partners from the US, and we are working on a project in which 50% of the project is funded by US investors. This country is now very attractive for investments. It is very profitable and time standards are very high.
What kind of investors would you be interested in partnering with?
The people that are here investing money are usually retired couples that are coming to live in Ecuador. They have their money in banks in the US, but they do not feel comfortable leaving their money there. As a result, they are investing here in short-term investments. One of our projects is for two or two and a half years maximum. They like that kind of real estate.
What level of growth do you expect over 2012?
Ecuador is going to grow around 6%, and this is the first or the second highest growth rate in Latin America. The construction sector is going to grow 10%. It is lower than the growth rate for 2011 of 16%. I expect that the real estate market is going to do very well in the next two or three years, registering very high growth.
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