by Julián Arcila
The Latin fire detection market accumulated one more year (2007) of small advances and few changes, this because although the degree of professionalism of installers and integrators has improved, the legal systems of the different countries do not help much with the formulation of laws that grant a mandatory character to the implementation n of fire systems in new constructions, and in general in all those buildings that compromise in some way the integrity of human life.
To put it in some way, it seems that the market has stagnated and that growth was taking place in small steps, but without exploiting the true potential that the region has as an unexplored market.
In reality, the Latin American market presents several faces that when looking at them allow us to draw conclusions about what is being seen in the region. To summarize, it is worth saying that Latin America has not yet been freed from the dependence on the cost factor and that there is still too much laxity on the part of both governments and investors to ensure that new properties, or even old ones, have the adequate smoke/fire protection system, and when they have it, they do not know or do not care about whether it complies with international certifications and minimum performance parameters.
This note will provide a general analysis of the Latino market economy during 2007, also reviewing the impact it had on the fire detection segment; subsequently, the particular characteristics that were detected in six markets in the region, including Mexico and Brazil, will be analyzed. It will also take a look at aspects as variable as the marketing strategies that are most frequently used, as well as the advances or setbacks that may have occurred in customs matters.
To resolve the concerns related to this issue SECURITY SALES spoke with Magocad, which through its operational manager, Mariela Marure, explained the particularities of the Mexican market; Jaime Trujillo, ISTC's sales manager for the Andean Region, gave his perspectives regarding the markets of Colombia, Venezuela and Peru; Anixter, through Angélica Fajardo, marketing manager of the Colombia office, provided valuable information on the Latin market (in relation to the Incisan Fire brand), but also provided data on the markets of Mexico, Brazil, Colombia, Venezuela and Chile (in relation to the Bosch brand); Finally, Marcos Kahn, a Brazilian expert, provided more information about this important market.
The pinnacle of a good business cycle
The year 2007 was perhaps the last link in that chain that was on the rise; with a growth in its GDP of 5.6%, the performance of the regional economy was well above what is expected for this year, in which it will barely exceed 4%. The segment of raw materials and the abundance of capital flows led to the revitalization of other key sectors, such as trade and construction, which have a direct relationship with the niche of fire detection. The best performing economies were Panama, Venezuela, Argentina, Peru, Colombia, Costa Rica, Brazil and Chile. The region's economic spike was the rise of an inflationary trend, which affected practically all the nations of the region and which, as if to leave no doubt, practically accentuated in 2008.
As suggested above, the Latin market for fire/smoke detection presented several characteristics that will be expanded throughout the article, but that can be summarized in that integrators and installers are increasingly professional in the performance of their work, but that the market does not advance at the expected pace, basically because there are no national laws that require the use of fire systems, but also because customers continue to depend on prices, regardless of whether the equipment purchased works or not in the right way. {mospagebreak}
To take into account, the commercial and industrial segment has led consumption, contrary to the residential one that stagnated in several of the countries of the region, something extremely worrying if it is concluded that households are practically lagging behind in terms of vital protection or safety.
Contradictions in Mexico?
This country constitutes the second largest economy in Latin America and is perhaps where there is a greater orientation towards the consumption of electronic security solutions. To make a very general analysis, it can be said that the market has advanced a lot, but not enough to say that it is ready to take advantage of all the advantages offered by new technologies, according to Marure.
In terms of trends, this market was clearly oriented towards the demand for dedicated analog/addressable fire solutions, rather than using combined intrusion/fire panels. The market was more interested in international fire regulations. This drove a growth in sales of this wholesaler of 25%.
For Samuel Salgado, engineer of the fire line of the Anixter seller for Bosch solutions in Mexico, the market has been very interested in automated solutions for fire detection, but unfortunately this has not been reflected in sales, which, however, grew by 20%.
With regard to the sectors that most demand these solutions, in the case of Magocad they were commercial and industrial, while residential was practically without growth; this situation was very different from the case of Anixter, whose seller in Mexico reported that the most dynamic segments were finance and real estate.
Of the sales made by Magocad, 70% corresponded to conventional photoelectric and thermal detectors, while the remaining 30% went to analog/addressable systems. With regard to Anixter, this relationship was defined in optical (60%), thermal (30%) and optical-thermal (10%) equipment.
The most used marketing strategies in this market are, in Magocad's opinion, visits to users, conducting seminars, participating in exhibitions and commercial presentations; in the case of the Anixter seller, the most used strategy was publication in specialized media, participation in exhibitions and training.
An interesting market, but not very constant
This characterization that is made of Colombia can be somewhat confusing, but the reality is that while every day there is a greater concern and interest in the implementation of these solutions, and in the projects it is put as a regulation that the systems comply with the UL and NFPA standards, rarely is it verified that they actually comply with them, according to Jaime Trujillo, of ISTC.
However, the best characterization of this market was made by engineer Daniel Ugarte, general manager of Incisan Fire Colombia, who participated in this article through Anixter de Colombia. The professional confirmed what Trujillo said, in the sense that the market is interesting and has important growth projections, thanks to the fact that there are segments with quite specific needs. In his opinion, the growth that has been presented in this market has been driven by initiatives to create fire legislation.
Juan Carlos Castillo, engineer of the fire and intrusion line of the Anixter seller for Colombia, also spoke about this market, who explained that there is an increasing interest in this country for this type of solutions, thanks to the concern that recent tragedies caused by conflagrations in several Latin American nations have generated.
On the most determining trends, Ugarte explained that they were the fire extinguishing systems based on automatic sprinklers, as well as analog / addressable equipment. Castillo, for his part, said that this territory leaned towards suction systems, photoelectric barriers and intelligent systems. {mospagebreak}
Faced with the most dynamic sectors in the consumption of this technology, Ugarte explained that they were the industrial and large surfaces, while Castillo pointed out that his sales went mainly to government buildings (50%), retail (30%) and other sectors (20%).
As for the most demanded solutions in this market, Ugarte explained that they were automatic fire extinguishing systems based on sprinklers (65%), fire detection systems based on analog/addressable technologies (30%) and clean agent detection systems (5%); Castillo pointed out that in his case the demand was inclined to intelligent systems (40%), photoelectric barriers (25%), multi-criteria technologies (20%) and suction systems (15%).
Faced with the question of what is needed to qualify the level of the Colombian market, Castillo said: "I think it is important that the manufacturing companies together with the distributors come together to establish clear rules, adjusting the standards to the different regions; Us standards do not always conform to our market and in the same way european ones, but it is possible to create a standard adjusted to the typical requirements of each region. For example, we can't require evacuation systems with sockets available to perform evacuations because our firefighters don't have the necessary tools."
Interesting segment with high price dependence
Venezuela could be said to be the only Latin American market with its own fire legislation, a fact that has even been driven by the implementation of a greater penalty for non-compliance with the rule.
On this market, Trujillo said: "It is one of the few countries that really has a regulation in this sense – although it is not completely complete – and this forces the market for fire detection systems to be interesting. However, there is not much culture at the end customer level and this allows cheap and unreliable solutions to continue to be supplied, which is enough that they pass the initial inspection of the authorities, even if they stop working after a few months. "
Regarding the main trends in this territory, Fernando de Oliveira, regional manager of the Anixter seller in this market for the Bosch line, explained that this market leaned towards smart installations in large corporations, while in SMEs conventional systems have become massive. This has allowed this brand to have a growth of 50% in this country, although the market share is still incipient.
The main segments, in Fernando's opinion, have been shopping malls, corporate buildings, central government and oil facilities.
It is important to note that according to this professional, in this market "there is still a lot of bureaucracy and exaggerated procedures to comply with, however you are obliged to do so given the sanctions and fines also exaggerated imposed by law." It is also necessary to mention that this country is the only one in the Andean Region with the manufacture of fire technology (SOVICA).
Construction and surveillance of firefighters grows
Brazil is a market case in which fire detection has grown hand in hand with the increase in civil construction and greater control and monitoring of fire departments, although this has been seen mostly in São Paulo, according to what Marcos Kahn explained, director of KB Engenharia, and who is considered one of the greatest authorities in this country on this issue. {mospagebreak}
However, Kahn believes that the market is still far from being considered as a mature territory, since the vast majority of systems are underused and there are few systems that once installed are correctly maintained by users. According to the expert, "the different features available in the most modern systems and that are very useful for the operation of the ventures, are not installed correctly by the installers, because consumers do not know them or do not request them. Most detection systems are implemented to comply with legislation and not to provide safety for life and property."
For his part, Renato Lima, engineer of the fire area of the Anixter seller in Brazil, explained that the local market is not yet sufficiently developed and attributed this situation to the fact that the consumer is still looking for the lowest cost in his firefighting facilities.
According to the latter professional, the Brazilian market leaned towards vacuum cleaner systems, infrared barriers and algorithmic systems. This has allowed to achieve a growth in the sales of this brand by 67% during 2007, which was broken down into addressable (70%), conventional (20%) and intelligent algorithmic (10%) solutions.
Additionally, sales in this country were directed to industrial sectors (50%) and commercial buildings and hotels (50%). To reach these sectors, companies resorted to strategies such as participation in exhibitions, product presentations and dissemination in specialized magazines.
Conclusion to the Chilean
The situation of the fire detection segment continues to be worrying in Latin America, because it is enough to see that, according to the comments provided by the sources interviewed, Mexico and Brazil, the two main economies in the region, there is no clear policy for this sector and the proof of this is that Venezuela is the only nation with own legislation in this regard; Chile, the third largest Latin economy, is not spared either, and its industry continues in the same direction as Latin America, according to Alfredo Mascaró, regional manager of the Anixter seller in southern territory.
Unfortunately, the negative aspects are quite important and the incipient growth in sales cannot cloud the fact that governments do not have coherent programs to require the application of international regulations when implementing a fire system; even more serious is what happens in Colombia, where there is no verification entity that is responsible for supervising and controlling the correct functioning of the equipment once delivered to the user of the property.
For 2009 there will be a lot to ask, but the most important thing is that clear actions must be taken so that this segment, perhaps the only one of electronic security whose failures usually yield fatal losses, begins to develop once and for all, understanding that ideas such as those that say "it is better known bad than good to know" or that there are that looking for the cheapest system, do not do any good to the industry.
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