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Doka branch in the Philippines

The large market potential offers many opportunities for a formwork supplier

11.12.2019 | Philippines
The EAP region accounts for a large proportion of global construction output, measured by Total Construction Output (TCO), which is the sum of the residential construction, non-residential construction and civil engineering. The high TCO level is accompanied by high dynamics: Annual real growth rates of around 4.4% per annum are expected for the period 2019 to 2021 for the EAP region. For comparison: The World-TCO real growth rates are expected to rise by 3.3% per year in this period.

Within the EAP region, the Philippines is one of the fastest growing countries with annual growth expectations of the TCO of over 8% between 2019 and 2021.

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Impressions

  • Total Construction Output (expected) relative growth rates
  • Stefan Schedel, Managing Directore, Asia & Pacific, Doka
  • Roland Temper, Head of Operations Country, Doka Philippines
According to this, the TCO in the country is growing almost twice as fast as in the already above-average dynamic EAP region. The highest expected absolute TCO growth 2019 in the EAP region falls by far to China, ahead of India and Indonesia. The Philippines follow in 6th place. The total construction project pipeline in the Philippines – as tracked by GlobalData, and including all mega projects with a value above US$ 25 million – stands at US$ 361.6 billion. The pipeline, which includes all projects from pre-planning to execution, is skewed towards early-stage projects, with 55.0% of the pipeline value being in projects in the pre-planning and planning stages as of April 2019.

Civil Engineering (Infrastructure, Energy & Utilities) is the most important TCO sector with a TCO share of 37% in 2018. The residential sector (single-family, multi-family housing) has a TCO share of 33% and the Non-residential sector (Commercial & Leisure, Institutional, Industrial) a share of 30%.


Interview with Stefan Schedel
Managing Director, Asia & Pacific, Doka

What potential does the Philippines market offer?
The Philippines registered a construction gross value of about $ 43.7 billion in 2018, 13.6% growth from 2017. The industry is expected to grow at 8% compound annual growth rate (CAGR) from 2019-2023, driven by public and private sector investments in infrastructure, residential, and commercial. There is also a huge demand to improve local energy resources driving investments to energy infrastructure. According to the Department of Budget and Management, the government plans to invest US$ 686.5 million on ten flagship infrastructure projects in 2019. This includes five railway, three bridge and road projects, and two flood control projects. The current formwork utilization is still low, but there is an opportunity to convert the market. There is a current need to accelerate methods of construction considering the pipeline of projects and quantity/quality of local contractors.

What are the challenges?
Unlike established international market players such as Peri, EFCO, Ulma and RMD Kwikform, Doka is a newcomer to the Philippine formwork market. Local formworks are well entrenched with the contractors and some customers already have their own formworks. Local conditions has delayed our capacity to operate as planned.

Why is it a good idea to establish a Doka branch in the Philippines?
There are many potential projects in the market for the next ten years, both public and private. While there are many players operating in the Philippines, there is still room to capture the growth, considering the growth in the market. The easy accessibility for the customers with the branch office strengthens our presence in the country.


Interview with Roland Temper
Head of Operations Country, Doka Philippines

Why did you move to Manila to set up a new office there?
This is an exciting challenge and opportunity to be part of a growth strategy and starting up a new location for Doka. The Philippines has one of the highest economic growth rates within the Asia Pacific region (2018 its GDP had over 6.2% according to the World bank). Even though the work is hard and involves long hours, but I have been always intrigued to be part of new start-ups within the company.

What potential does the market offer?
The market potential is huge. According to GlobalData the construction industry increased in 2018 by 13.6% (US$ 38.5 billion in 2017 to US$ 43.7 billion in 2018).

What are the challenges?
The big challenge is the bureaucracy in this country. This slows everything down to get things done including winning and executing projects.

Why is it good for Doka to set up a branch in the Phlippines?
The latest government is working hard to improve the country’s overall situation and trying to improve the living conditions. It is still a long way to go, but the Phillipines is one of the safer places out of the developing countries in the Far East, hence investing here makes sense.
Doka Philippines, Inc.
Kn. 21 West Service
Road, 25b Vilongco Road,
Brgy, Sucat
1770 Muntinlupa City
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