Mexican Housing Program Starts With Free Advice
 Cecilia Tenorio - Journal & Courier
| | These may look like Monopoly houses, but they are part of a 10,000-unit housing project in Ixtapaluca, Mexico. The picture was shot from the air, and is real, or so says the helicopter pilot who took them. Still, it looks so surreal, you’d swear it was a digital rendering. (B2Day) |
A Mexican worker living in the United States sends $100 to his family in Mexico to help build a small house. But only $15 is used for construction. The rest is spent on other things.
That's a hypothetical case, but it shows a real situation. According to estimates from Cemex, the biggest construction supplier company in Mexico, only a small portion of the remittances sent by Mexicans abroad to build a family house is used for that purpose.
Lack of housing is a big problem in Mexico and other developing countries. Cemex decided to launch two programs to help low-income families build homes.
They are Patrimonio Hoy, for Mexicans living in their home country, and Construmex, for those living abroad.
Cemex seeks to keep growing, and the programs serve to expand the demand for its products. At the same time, the company wants to help overcome the housing problems of Mexico, so it provides free services and technical advice to families so they can build their own houses.
A Cemex official was in West Lafayette recently to participate in a conference and talked about the company's housing program.
Cemex, which is also developing housing projects in other Latin American countries, participated in "The Sustainable Global Supply Chain," organized by Krannert School of Business at Purdue University.
The program Patrimonio Hoy (Property Now) offers free engineering and architectural advice to make a better use of space and building materials. It also offers supplies at lower prices.
"Typically it takes five years for a family to build 100 square feet, and it costs them $1,500 in building materials," said Israel Moreno Barceló, general manager of Patrimonio Hoy and representative of the company at the conference.
"If that same family participates in our program, it takes them only 1.5 years, and they only spend $1,200, and the quality of construction is better."
Why the difference? When families build on their own, they have neither financing nor technical assistance nor organization; that means more wasted materials and inefficiency.
The five-year-old program Construmex responds to a different reality. Money remittances by Mexicans living abroad exceed $20 billion a year. It's the second most important source of income for Mexico, after oil and ahead of tourism.
A significant share of the money is sent to build family homes. However, for several reasons, only 15 percent on average is spent in building homes. To help increase the percentages, Construmex works as a broker between the two countries.
"We offer the Mexican resident in the U.S. to deliver the building supplies directly to their families in Mexico," explained Moreno Barceló.
Cemex also offers technical advice and the delivery of materials in increments adjusted to the progress of the construction. There are several forms of payment: The whole sum can be paid before the materials are delivered, pay as you go, or the customer can apply for a loan through the company.
Ananth Iyer, professor at the Krannert school and organizer of the conference, said Cemex offers an interesting business approach to both serving the poor and being profitable.
"I personally think that it requires innovative approaches to do so and provides a context for business school faculty and students to understand successful operations in emerging markets," he said. |
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Puerto Vallarta Real Estate | February 2007 
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