By: Alex E. García M*
The first thing we should know is that in Colombia the electronic security sector is not constituted as independent. The products and systems of this industry are included, for the purposes of the impact they represent in the local market, within the technology or IT sector.
For this reason, there is a shortage of statistical data on electronic security equipment in terms of its share of GDP, and in general other relevant data such as employment figures and operational records.
This situation reflects the small size of the electronic security equipment market in terms of domestic production. This is how this factor is not a good measure of the size of the sector, because although the production of the equipment used in this industry is practically zero in Colombia, the flow of imports reported during the last years provides an idea of the importance of the same in the Colombian economy, and mostly in recent years when the current president of Colombia, Álvaro Uribe decided to give priority to democratic security policy.
The best way to carry out a market study for this sector is to use the information of imports of the equipment, due to the absence of national companies dedicated to the manufacture of equipment destined for the security market, with only a couple of exceptions that do not affect the result of market size obtained.
The following are some results obtained by a study of the electronic security market in Colombia:
Notes:
1. The securities presented are values in millions of dollars.
2. A profit margin on products of 25% was taken into account for the purposes of calculation. These values do not take into account the VAT values paid or collected, but they are the taxes of nationalization, insurance and freight.
3. In the "Other" category are products such as: X-ray Machines, Security Doors, Metal Detectors, among others.
4. Products that could be classified within the industry are not taken into account
of security, such as clothing and hoses used for firefighting, banknote counters, mechanical plates, intrusion alarms, among others.
5. For the information presented for the year 2008 throughout the study, data are being taken from 1 December 2007 to 30 November 2008, as data for the month of December 2008 are not yet available.
6. 32 Integrating companies and 19 distribution or manufacturing companies with a nationalization office in Colombia were considered.
Companies that acquire electronic security systems, especially multinationals, prefer the use of more recognized brands in the international arena, and who have also had a presence in Colombia for a considerable time, such as CCTV: Panasonic, Pelco, GE, Samsung. In access control: Lenel, Honeywell, Johnson Controls. In Fire Detection: Notifier, Simplex, Bosch, among others.
Low-cost systems
Unfortunately, fewer and fewer companies support this policy, due to the difference in costs between these products and "generic" Chinese products that over time take a larger percentage of the market.
In the midst of integrating companies, the proliferation of SMEs that offer low-cost security systems, with very economical facilities and buying the equipment from national distributors, is increasing, which facilitates marketing because they do not require infrastructure in the part of nationalization or service, since they depend almost 100% on the support provided by this distribution company. Logically this has led to a detriment in the quality of the security systems installed.
This competition of SMEs has made large integrating companies with service infrastructures, projects, purchases and others, are significantly affected and forced to reduce their cost structure, including the reduction of their staff and paradoxically with it, encourage more the creation of new SMEs, since many of these former employees decide to become independent taking advantage of their experience and knowledge in the market.
Fortunately, the interest of some security professionals in trying to level the cost/quality ratio has been noticed lately, so that it has been becoming aware of the advantages of having a security system of optimal quality, and on the contrary the damage and costs to which companies that acquire security systems of very low quality can be called.
In the field of manufacturers, the impact on the income of "generic" Chinese products has also been perceived, forcing some to reduce their profit margins and look for alternatives to reduce costs in their value chain to try to be more competitive.
Decisions that drive the sector
The electronic security equipment sector is highly dynamic considering the flow of imports and has been influenced by programs adopted by the national government, which boost the electronic security sector in general.
The government's democratic security policy has caused many Colombian cities to invest in electronic security equipment, mostly in the CCTV line, acquiring large amounts of monitoring and image recording equipment. There is currently a centralized satellite monitoring government project, which will require investment in more electronic security systems for this year and beyond.
Smaller-scale affectation
Globally, the electronic security sector was affected in 2008, but to a lesser extent than other industries, due to the economic crisis originated in the mortgage sector of financial institutions.
Specialists project that the world economy will decrease by 2% by the end of 2009, although for Latin America growth of 1% is expected and for Colombia there is talk of 1.5% to 3.5%.
The electronic security sector will not necessarily follow these parameters and on the contrary, higher growth could be expected, because companies and governments will require greater security as a result of the increase in unemployment rates, which cause an increase in crimes such as theft and others.
Currently, Colombia is configured as a host country for new technologies in the field of electronic security. Indeed, the growth of the sector of equipment such as cameras, digital recorders and similar products, has resulted in the end customer increasingly demanding state-of-the-art technology with better integration between the different CCTV systems, access control, fire detection and even with a convergence with other systems, such as computer security and computer platforms in general, always trying to match the technological level of developed countries.
Finally, the electronic security market is demanding over time that its systems and equipment be integrated under an IP platform, in which unfortunately there is still ignorance of end users, for example, between the differences between Mega pixel IP cameras and low-cost IP cameras. Due to this, there has been a great increase in the sales of the products of "garage" distribution companies, which offer low-cost IP equipment.
Engineer Alex E. García M. is a specialist in electronic security and can be contacted by the electronic broker [email protected], or enter http://segelec.blogspot.com
