Election Underscores Peru Growth Outlook

Peru’s demand for architectural paints should rise on increased demand by homeowners and from new construction.


Peru’s recent presidential election has reestablished a firm market-oriented future for the rapidly growing country. Pedro Pablo Kuczynski is expected to foster continued growth in mining, oil and gas, as well as the infrastructure and housing construction markets, boding well for paints and coatings demand.

The nation of 31 million-plus is considered an upper-middle class economy by the World Bank, and the gross national product per capita of over $11,000 is similar to that in Colombia, but trails the Brazil figure. GDP expansion this year is widely forecast to be 4.0 percent, and Peru’s central bank has forecast 4.6 percent in 2017.

The demand for architectural paints should rise on increased domestic demand by homeowners and from new construction. The government has plans to build some 244,000 homes, to help alleviate the housing crisis. In the commercial construction segment, STR reports that 1,064 rooms in nine hotels are being constructed in Peru, which has a long history of tourism growth.

Among new entrants to the architectural market is Chile’s Pinturas Ceresita, which is now being manufactured in Peru. A company official was recently quoted by a Lima publication suggesting that the Peruvian paint market is now worth $350 million, with per capita consumption of 1.3 gallons.

Apart from strong sales for paint manufacturers with company stores, like Sherwin-Williams, DIY big box sales are climbing. Ceresita will be sold through the Sodimac chain. Pinturas Vencedor, which has claimed to be the third largest in the Peruvian architectural segment, also is sold through Sodimac stores.

Vencedor, now owned by Qroma Color y Proteccion, has sister paint companies in Peru including: American Colors; CPP; Tekno; Fast; Paracas; Jet; Uniquímica; Teknoquímica and Abralit. Among these brands, CPP is being recast as a highly durable product under a new marketing campaign. Similarly, American Color, a premium brand, has recently launched a mobile phone site and a social media campaign.

Industrial paint demand will continue to climb with new infrastructure projects. In the oil and gas sector, the $4 billion southern gas pipeline (GSP) is being constructed by a joint venture including Brazilian construction firm Odebrecht, Spanish utility Enagas and Peruvian builder Grana y Montero. The pipeline will feed two thermal electrical generation plants under construction and plans are underway for petrochemical plants as well.

Industrial paint manufacturers like PeruPaint will expand with new infrastructure projects, adding to its portfolio of iconic structures like the National Stadium. Other suppliers to the industrial segment include Germany’s Eckart and U.S.-based Armorthane. Armorthane executives recently toured Peru with a Missouri State trade promotion group to encourage greater exports to Peru, particularly in the mining sector.

Mining is the other main stay in the Peruvian economy, accounted for 14 percent of the country’s GDP in 2014, when mineral exports yielded $16 billion. Peru holds 22 percent of the world’s silver reserves and 13 percent of the world’s copper reserves, according to Ernst & Young’s Peru’s Mining & Metals Investment Guide 2015/2016.