Contrato Engenharia: Real Estate and Construction in Alagoas

Interview with João Teixeira, Director of Contrato Engenharia

How would you present the construction sector in Alagoas?

The construction sector in Alagoas is unknown to many people. There is a high volume of construction in Alagoas: not infrastructure building, but small infrastructure construction. I referred to the Alagoas’ construction sector as unknown because Alagoas is a poor state when compared to the other states in Brazil.

There was a newspaper article last week stating the 5 cities with the highest income per capita and the city with the smallest income per capita was Maceió. Our challenge is to develop Maceió. We used to have some governments in the past that didn’t care so much for the development and growth of the city. We believe the things at state level have already improved thanks to the current government. There is, of course, a lot left to be done.

We need to attract new industries, factories, etc. Maceió now lives mainly from services, tourism and from the state. We really need to develop the activities that generate income like, for example, factories or even further development of tourism.

Private enterprises already responded in a strong way to the government. A good example of an increased private sector’s investment is the number of beds available in Maceió; this number is greater than the number of beds in Recife, which will be one of the cities to host the World Cup.

Our greatest challenge is to make the government and authorities follow the example of investment made by private companies.

How does your company differ from the others?

I always say that the biggest difference between Contrato Engenharia and the other companies is that we build from “popular” to the sea front. We build for every social class and we are thus trying to serve everyone. We can build a 50,000 to 60,000 Brazilian Reais house or a 2 to 3 million Brazilian Reais apartment by the sea.

We can divide our performance on the market into three segments: (1) the “popular” segment, where we work for the population that has little income (with the federal governmental program “My house, My life”); (2) the medium/medium-high standard segment, with resources from the Brazilian system of savings/loans; (3) the third party building segment, where we build for big companies.

Currently we are working on 12 major projects in the 3 segments I just explained above.

You are building in a partnership with an Italian company. What would you like to say to possible foreign investors?

I met the Italian company through one of our lawyers that has been in Brazil since 2005. He came to Maceió with a group of tourists and he fell in love with the town. Maceió – and most of Alagoas cities – is very welcoming, calm and it has a beautiful sea coast. I have many Italian, Portuguese and French friends that came to live and install their business here. Many come here as tourists and end up installing their businesses here, because they see the huge possibilities in terms of markets.

We are in the Northeast region of Brazil, which is the region with the highest growth rate in the country.

As I told you before, everything still needs to be done, therefore I believe that the growth during the next 10 years will be exponential.

Speaking about the third segment, do you also build supermarkets and other commercial buildings? What do you do exactly?

We are building a supermarket called “Unicompras”, which is a network of more than 20 stores that is 100% from Alagoas. We are also building the hotel “Tropicohotel” and we are currently in negotiations with another hotel chain to create its complex. We are active mainly in Maceió and Arapiraca.

How is Contrato Engenharia positioned on the market? Is your company the leader in the real estate construction sector?

I believe that in Alagoas we occupy the first position in terms of building projects and built units. There was an article in “Valor Econômico” about the companies involved in the project “My house, My life” and we ranked 19th (nationally).

Your company is growing and you are very well positioned. Is there anything missing, anything that you need?

We need investment. The Brazilian dedicated funds are very expensive. The foreign investments and resources are decreasing due to the world’s crisis, but we have many foreign clients. We have clients from Japan, France, Switzerland, England, Portugal, USA, Canada, etc.

We know that there are big international companies and international funds ready to invest in emerging countries like Brazil. We think that the foreign investment can speed up the development process in terms of the real estate and all infrastructure in Maceió.

The market is available; the companies are ready to welcome all foreign investors that wish to participate in this growth.

Can you talk about the social side of the company?

The social work has been developed in the company for some time now. We currently have over 1,800 employees and we are very active in the social terms.

We have the governmental programs SENAI, SEBRAE, CESE, etc., and we have our internal program that is called “Quem faz casa, quer casa” which delivers a house to one of our employees every time a complex is completed.

We are also implementing the ISO 2000 environmental standard, which speaks a lot about the product quality, hygiene and so on. The real estate construction sector is considered to be a polluting sector and we must amend this perception so that we can have a sustainable growth.

Our major goals are sustainability and socio-economic work – to grow with responsibility, caring for the environment; to care for our employees and clients. I think these are the reasons for our growth: we respect our clients and our competitors. That is the philosophy we try to transmit to our employees. In a few years from now we want to look back and be proud of what we’ve done.

Our efforts were appreciated when we were awarded the ADEMI prize. We were enrolled in 4 out of 10 categories and we won in all these 4 categories. The prize takes under consideration the environment, accessibility, energy efficiency, the quality of the project, the quality of the execution of the project. We view this prize as a recognition of our hard work.