Market Report - Construction Materials - EN

THE US MARKET FOR BUILDING
MATERIALS AND OPPORTUNITIES

FOR PORTUGUESE SMES:
COMPETITION AND DEMAND
VOLUME ONE: REPORT
Produced by Marq Consulting Group and CH Academy,
Commissioned by the Associação Empresarial de Portugal (AEP) and the Industry of Porto
Funded by the European Union (EU), Fundo Europeu de Desenvolvimento Regional (FEDER) / European Regional
Development Fund (ERDF)
Lead author: Dr Laura J White, Marq Consulting Group

Editors: Julie Peterson, Marq Consulting Group, and Carlos Lacerda, CH Academy
August 2016 THE US MARKET FOR BUILDING MATERIALS

• 1
AND OPPORTUNITIES FOR PORTUGUESE SMES
2 • USA NEXT CHALLENGE
Table of Contents
Executive Summary 7
Acronyms 11
List of Figures 13
List of Tables 17
Section 1: Introduction 19
1.1 Report Parties 19
1.2 Report Focus 19
1.3 Report Methods 22
1.4 Report Subsectors and Product Categories 24
1.5 Conclusion 24
Section 2: Internal (US) Competition 27
2.1 Introduction 27
2.2 Top US Producers 27
2.3 US Construction Materials Market Competition 29

2.3a Hardware Subsector Product Categories 29
2.3b Building Ceramics 37
2.3c Electrical Materials 46
2.3d PVC Materials 52
2.3e Metalware Products 58
2.4 Conclusion 64
Section 3: External Sector Competition 67
3.1 Introduction 67
3.2 Top Sector Competitors 68
3.3 Global Competitors 70
3.3a Hardware: Other Metal Fasteners 70
3.3b Building Ceramics: Glazed Ceramics 71
3.3c Electrical Products: Light Fixtures 72
3.3d PVC Products: Plastic Pipes 73
3.3e Metalware: Iron Pipes 74
3.4 European Competitors 75
3.4a Hardware: Other Metal Fasteners 76
3.4b Building Ceramics: Glazed Ceramics 76
3.4c Electrical Products: Light Fixtures 77
3.4d PVC Products: Plastic Pipes 78
3.4e Metalware: Iron Pipes 79
3.5 Conclusion 80
Section 4: Legal Regulations and Compliance 83
4.1 Introduction 83
4.2 Labeling and Packaging 83
4.3 Special Requirements 84
4.4 Tariffs 84
4.5 Distribution Structure and Channels 85
4.7 Effect of Legislation 88
4.8 Conclusion 92
Section 5: An Insider’s Perspective of the US

93
Construction Materials Market
5.1 Introduction 93
5.2 US Construction Materials Demand 93
5.2a Metal Sector Demand 94
5.2b Ceramics Subsector Demand 97
5.2c Electrical Subsector Demand 100
5.2d PVC Subsector Demand 102
5.3 Trends Affecting Supply and Demand 106
5.4 Understanding How the Competition

112
Responds to Trends
5.5 Conclusion 118
Section 6: Conclusion 121
6.1 Introduction 121
6.2 Portuguese SMEs’ Strengths and Challenges 124
6.2a Challenges 124
6.2b Strengths 128
135
References
Executive
Summary
This report was conducted by Marq Consulting
Group and CH Academy for the Next Challenge
USA project that was commissioned by the
Associação Empresarial de Portugal (AEP)
Chamber of Commerce and Industry of Porto and
financially supported by European Union (EU)
through Fundo Europeu de Desenvolvimento
Regional (FEDER) or, in English, the European
Regional Development Fund (ERDF) as part of the
Compete 2020 project. It contains two volumes.
This volume (Volume One) contains the report
content, and Volume Two includes all necessary
appendices. The projects and report aim to
improve and assess export development and
growth opportunities for over 150 Portuguese small
and medium-sized enterprises’ (SMEs) through
trade facilitation with the United States (US).
Section 1 introduces the report, report parties, and

report focus by giving an overview of global and
Portuguese trade. The section highlights current
Portuguese trade competitiveness – ranked 38th
out of 190+ countries by the World Economic
Forum for 2015 to 2016 – and how building
materials exports support Portuguese growth,
gross domestic product (GDP), and economic
recovery. The Portuguese construction industry,
in general, has faced a slower recovery from the
2008 financial crisis, and the report examines
how US market access and growth can improve
the industry and export competitiveness in
five subsectors: hardware, building ceramics,
electrical, PVC, and metalware.
Section 2 assesses internal competition, top

producers, and export volume that characterizes
the US construction materials market by
THE US MARKET FOR BUILDING MATERIALS

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analyzing over a dozen subsector product
categories. The analysis finds slow but steady
five-year growth in the US market for all
subsectors; however, some building ceramics and
metalware product categories present stronger
market access barriers to SMEs due to materials
preferences, low import demand, reduced global
trade flows, on-going international disputes,
and global oversupply. Opportunities for export
development and growth look particularly
strong for padlocks, glazed ceramics, low-voltage
protection equipment, light fixtures, and plastic
pipes. The section offers recommendations
for sustainable strategy development, such as
which competitors to target when establishing
competitive advantages among US suppliers.
Section 3 builds on Section 2’s internal

competition analysis by examining Portugal’s
global and European competitors. Competition
and export development are two processes
that shape materials trade in dynamic industry.
Portugal’s most consistent competitors are
within Europe and, specifically, Poland and the
Czech Republic. Glazed ceramics, light fixtures,
and all hardware product categories are optimal
for SMEs’ export development, which have
the added benefit of enhancing Portugal’s US,
European, and global market competitiveness.
PVC and metalware subsector products present
more frequent barriers and fewer short-term
opportunities for SMEs. Sustainable strategies
for improving export development and
competitiveness are consistent export volumes,
a US brick-and-mortar presence, and utilizing
knowledge, collaboration, and performance
indicators through an “export club”.
Legal regulations and compliance are the subjects

of Section 4 that also includes critical resources
to help SMEs avoid costly mistakes, such as
guidance on following special requirements for
iron stovetops. Volume One outlines the range
of tariffs for each product category; Volume Two
details tariffs for specific products within these
categories. The most critical resource for SMEs is
Section 4.5 (Distribution Structure and Channels),
which provides US companies’ advice for SMEs
market access and an overview of the state-
specific product certification process – mandatory
for all newly imported construction materials. The
section concludes by helping SMEs understand
the effects of relevant US legislation, such as the
Buy American provision that requires all federal
contractors to work with only American-made
materials. The underlying message of Section 4 is

that the US market is vast, highly competitive, and These findings suggest that SMEs’ challenges
market entry is costly; SMEs must ensure they are include:
export ready.
»» Identifying critical resources necessary to
Section 5 fosters an “insider’s perspective” of how increase competitiveness and supply US
to effectively supply US construction materials demand
demand. The section begins by assessing US
»» Building Portuguese product visibility and
demand for imported construction materials
recognition
and also suggests related subsector product
categories where SMEs may be competitive. From »» Sustainability in weaving short-term goals into a
technology to commercial building and from longer, more focused plan
desertification to iron / steel disputes, the effects »» Outcompeting European competitors that have
of trends on import supply and demand are then been leveraging their competitive advantage(s)
examined. Following, the report helps SMEs gain a in the US market for years in advance.
competitive edge by profiling top US construction
companies, trade associations, trade shows, and
publications. The analyses reiterate that hardware
and electrical subsectors offer the greatest and Whereas, SMEs strengths in the US market are:
most secure opportunities for Portuguese SMEs,
but they can be effective in other subsectors by »» Utilizing collaboration to:
keeping pace with US and global developments.
–– maintain and increase export volume
Section 6 concludes this report with a sector- –– respond to diverse supply needs (shipping
by-sector, product-by-product summary of the PVC products along with electrical products,
competition, supply / demand, and opportunity for example)
assessments. The report finds overall opportunities –– develop and nurture US relationships
for Portuguese SMEs in hardware (padlocks and –– cope with dynamic markets
other metal fasteners), building ceramics (glazed
and unglazed), electrical (LVPE and light fixtures),
and PVC (plastic pipes and other plastic sheeting) »» Geographic proximity to the US for shipping
products. These findings should not dissuade and communication purposes, although for
SMEs looking to export other products, such as more immediate or extensive US market access
metal mountings, roofing tiles, or metalware, but and growth, a brick-and-mortar presence or US
rather highlight that US market access in these representative is recommended
product markets is restrictive to those without an »» More innovative modes of production and
established competitive advantage, ranging from exportation utilizing technological and
an existing US network to free trade agreements. infrastructure improvements
The majority of Portugal’s competitors for the US
»» Competitive product costs.
constructional materials market are those within
Europe; outside Europe, Canada, New Zealand,
Brazil, Singapore, Saudi Arabia, Australia, and
Turkey are key competitors. Sustainable strategies
to improve internal competitiveness include:
»» SME collaboration
»» Short-term goals, such as export consistency,
that support long-term goals, such as increasing
product visibility
»» Monitoring developments in key markets
through 2018
»» Facilitating demand through a brick-and-
mortar presence or a Portuguese representative
in the US.

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Acronyms
ACE Automated Commercial Environment
AEP Associação Empresarial de Portugal
AGC Associated General Contractors of America
AICEP Agência para o Investimento e Comércio Externo de Portugal
ARRA American Recovery and Reinvestment Act
B Billion
BIT Bilateral Investment Treaty
BdP Banco de Portugal
CBP Customs and Border Protection Agency
DC District of Columbia
ERDF European Regional Development Fund
EU European Union
FEDER Fundo Europeu de Desenvolvimento Regional
FDI Foreign Direct Investment
FTA Free Trade Agreement
GDP Gross Domestic Product
GFCF Gross Fixed Capital Formation
GSA General Services Administration
HS Harmonized (Tariff) System
IMF International Monetary Fund
ISO International Organization for Standardization
(US) ITC International Trade Center
JCHS Joint Center for Housing Studies
K Thousand
LVPE Low Voltage Protection Equipment
M Million
NAFTA North American Free Trade Agreement
NAICS North American Industry Classification System
NES National Evaluation Service
OEC Observatory for Economic Complexity
PVA Polyvinyl alcohol
PVC Polyvinyl chloride
SIC Standard Industrial Classification
SME Small and Medium Sized Enterprise
UAE United Arab Emirates
UK United Kingdom
US United States
WTO World Trade Organization

• 11
List of Figures
Figure 1.1 Portuguese Net Contributions to Real Volume One: 20
GDP Growth in Percentage Points
Figure 1.2 Portuguese Gross fixed capital Volume One: 21
formation (GFCF), Related Subsectors
Figure 2.1 Top Ten US Padlocks Producers (2014) Volume One: 30
Figure 2.2 US Padlocks Imports Market Value Volume One: 30

(Millions) By Country (2014)
Figure 2.3 Top Ten US Padlocks Producers (2013) Volume Two: 1
Figure 2.8 Top Ten US Metal Mountings Volume Two: 2

Producers (2013)
Producers (2012)
Producers (2011)
Producers (2013)
Producers (2012)
Producers (2011)
Figure 2.17 US Glazed Ceramics Imports Market Volume One: 25
Value (Millions) By Country (2014)
Figure 2.18 Top Ten US Glazed Ceramics Volume Two: 5
Producers (2013)
Producers (2012)

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Producers (2011)
Figure 2.21 Top Ten US Unglazed Ceramics Volume One: 27
Producers (2014)
Figure 2.22 US Unglazed Ceramics Imports Volume One: 27
Market Value (Millions) By Country (2014)
Figure 2.23 Top Ten US Unglazed Ceramics Volume Two: 6
Producers (2013)
Producers (2012)
Producers (2011)
Figure 2.26 Top Ten US Roofing Tiles Producers Volume One: 28
(2014)
Figure 2.27 US Roofing Tiles Imports Market Volume One: 29
Figure 2.28 Top Ten US Roofing Tiles Producers Volume Two: 8
(2013)
(2012)
(2011)
Figure 2.31 Top US Roofing Tiles Producers Volume One: 30
Market Value (Millions, 2014-2011)
Figure 2.32 Portuguese Roofing Tiles US Import Volume One: 31
Value (Thousands, 2011-2014)
Figure 2.33 Top Ten US LVPE Producers (2014) Volume One: 32
Figure 2.34 US LVPE Imports Market Value Volume One: 33

Figure 2.35 Top Ten US LVPE Producers (2013) Volume Two: 9
Figure 2.38 Portuguese LVPE Import Value Volume One: 34

(Millions, 2011-2014)
Figure 2.39 Top Ten US Light Fixtures Producers Volume One: 34
(2014)
Figure 2.40 US LVPE Imports Market Value Volume One: 35
Figure 2.41 Top Ten US Light Fixtures Producers Volume Two: 11
(2013)
(2012)
(2011)

Figure 2.44 Market Value, US Light Fixtures Volume One: 36
Imports (2011-2014)
Figure 2.45 Portugal’s Competitors in the US Volume One: 37
Light Fixtures Market
Figure 2.46 Top Ten US Plastic Pipes Producers Volume One: 38
(2014)
Figure 2.47 US Plastic Pipes Imports Market Volume One: 38
Figure 2.48 Top Ten US Plastic Pipes Producers Volume Two: 12
(2013)
(2012)
(2011)
Figure 2.51 Top Ten US Other Plastic Sheeting Volume One: 40
Producers (2014)
Figure 2.52 US Other Plastic Sheeting Imports Volume One: 41
Market Value (Millions) By Country (2014)
Figure 2.53 Top Ten US Other Plastic Sheeting Volume Two: 14
Producers (2013)
Producers (2012)
Producers (2011)
Figure 2.56 Top Ten US Iron Pipes Producers Volume One: 43
(2014)
Figure 2.57 US Iron Pipes Imports Market Value Volume One: 44
Figure 2.58 Top Ten US Iron Pipes Producers Volume Two: 15
(2013)
Figure 2.59 Top Ten US Iron Pipes Producers Volume Two: 16
(2012)
Producers (2011)
Figure 2.61 Top Ten US Iron Stovetops Producers Volume One: 46
(2014)
Figure 2.62 US Iron Stovetops Imports Market Volume One: 46
Figure 2.63 Top Ten US Iron Stovetops Producers Volume Two: 17
(2013)
(2012)
(2011)
Figure 3.1 Global Iron Pipes Export Value Volume One: 56
(Billions)

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List of Tables
Table 1.1 Portuguese Construction Materials Volume One: 22

Export to the US (Data: OEC 2014)
Table 2.1 Portuguese / San Marino US Import Volume One: 30

Competition
Table 2.2 Portuguese US Glazed Ceramics Im- Volume One: 30

port Competition (Millions)
Table 3.1 Portugal’s European Competition in Volume One: 68

the Global Light Fixtures Market
Table 3.2 2011-2014 European and Asian Iron Volume One: 80

Pipe Exports
Table 5.1 US Metal Sector and Subsector Product Volume One: 96

Categories Demand Levels (2011-2014)
Table 5.2 US Ceramics Subsector and Product Volume One: 98

Categories Demand Levels (2011-2014)
Table 5.3 US Bathroom Ceramics and Ceramic Volume One: 99

Bricks Demand Levels (2011-2014)
Table 5.4 US LVPE and Light Fixtures Demand Volume One: 101
Levels (2011-2014)
Table 5.5 2014 Markets for Electrical Transform- Volume One: 102
ers and Control Boards Products
Table 5.6 US Plastics and Rubbers Sector and Volume One: 104
Related Product Categories Demand Levels
(2011-2014)

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Section 1:
Introduction
In 2015, the world continued to recover from on-going global crises
by focusing on declining trade flows, the wider global economic
outlook, and job creation. Forecasts for global trade growth in 2016
remain modest at approximately 2%; political instability, currency
fluctuations, and restricted business and personal lending continues
to hamper growth (WTO 2016i; BdP 2016). There is reason, however,
to be optimistic. Trade flows are predicted to improve considerably
from 2017 to 2018 with a growth rate of 3.5 to 3.8% (WTO 2016i; BdP
2016). Accordingly, this report is positive about Portugal’s ability to
capitalize on global trade stability and conservative growth through
sustainable export development strategies in the world’s largest
imported goods market outside of the European Union (WTO 2015).
1.1 Report Parties
This report offers guidance on how Portugal can enhance

construction materials exports and is the first of five market
reports in the Next Challenge USA project. Next Challenge USA
was commissioned by the Associação Empresarial de Portugal
(AEP) Chamber of Commerce and the Industry of Porto and is
supported by European Union (EU) through Fundo Europeu de
Desenvolvimento Regional (FEDER) or, in English, the European
Regional Development Fund (ERDF). Part of the wider Compete
2020 project, Next Challenge USA works to improve market access
for over 150 Portuguese small and medium-sized enterprises’ (SMEs)
through trade facilitation with the United States (US). The project
supports SMEs’ role in sustainable urban economic development
and is conducted through a series of reports, workshops, and
seminars that are hosted by the Portuguese consulting group, CH
Academy, and their American partner, Marq Consulting Group.
1.2 Report Focus
The report addresses the factors that shape sustainable export

development strategies through increased US market access and
growth. The historical strengths and innovativeness of Portugal’s
export economy, dating back to 15th century leadership in early
mercantilist trade, shape the report’s context. Exports across
various sectors have remained strong, but the 2008 global financial
crisis has had deep effects on Portuguese trade. The Portugal
Global Trade & Investment Agency (AICEP) reports that: “of the
approximately 350,000 companies incorporated in Portugal, an
overwhelming majority – 99.7% – are SMEs” (2011).
As this 99% that drives Portuguese trade continues to recover from

the 2008 crisis, a key obstacle is access to authentic, transparent
trade finance as a mechanism for economic growth for SMEs

• 19
(WTO 2016). After instituting economic reforms: “the Portuguese
economy has made significant progresses in the correction of a
number of macroeconomic imbalances, having implemented
measures of a structural character in several areas” (AICEP 2016:
4). This report highlights examples of Portugal’s trade-related
triumphs and challenges.
The latest projections from Banco de Portugal (BdP) indicated

growth in gross domestic product (GDP) between 1.5 and 1.7% for
2016. Growth figures were based on increased foreign and domestic
demand for Portuguese goods and services as well as tourism
promotion (BdP 2016; see Figure 1.1 below). There is, naturally, a
strong link between Portugal’s continued economic progress and
the expansion of its export market. According to the BdP (2016),
export volume in GDP terms should continue to recover across the
coming years, and the World Bank (2016) expects Portuguese GDP
will rise to pre-2008 crisis levels (Figure 1.1). Five-year trends show
steady progress since GDP declined considerably from $244.9 Billion
(B) in 2011 to $216.4B in 2012 (World Bank 2016).
Figure 1.1 – Portuguese Net Contributions to Real GDP Growth

in Percentage Points (BdP 2016)
◼ GFCF - total
◼ GFCF - machinery and equipment
◼ GFCF - transport equipment
◼ GFCF - construction
◼ GFCF -other
Source: Statistics Portugal.
Next Challenge USA’s goal is to improve Portuguese export

competition, particularly through the growth of SMEs, and this
report looks deeply at US, global, European, and Portuguese
competition. The World Economic Forum’s Competitive Index
ranked Portugal as the 38th (out of 190+) most competitive nation for
2015-2016, falling from its 2014-2015 position as 36th. Portugal’s most
similar export competitors, across a five-year trend analysis, are the
Czech Republic, Greece, Poland, and the UK1. Portugal consistently
outcompetes Croatia, Finland, Ireland, and Belgium-Luxemburg; it
1 The report was written before “Brexit” was negotiated, and the inclusion of the UK among
Portugal’s most similar competitors is subject to these changes.

occasionally outcompetes the Netherlands, Malta, and Sweden and
is consistently outcompeted by Bulgaria, Estonia, Latvia, Lithuania,
and Slovakia in global trade (WTO 2015).2 However, Portugal’s
position within the World Economic Forum’s Competitive Index
reveals inconsistencies in export growth, and the decline in export
competition is indicative of the construction materials industry’s
comparable weak recovery.3 Figure 1.2 demonstrates the static
recovery of the construction industry when compared to related
export industries.
Figure 1.2 – Portuguese Gross fixed capital formation (GFCF),

Related Subsectors (BdP 2016)
◼ Domestic demand
◼ Exports
◼ GDP (%)
Source: Statistics Portugal and Banco Portugal.

Note: (p) - projected.
The Portuguese construction industry continues to experience a

slow recovery, both in GDP terms and as measured by three of its
top ten export destinations since 2008 (AICEP 2013). Among the
countries that constitute Portugal’s top five export destinations
from 2008 to present – Spain, France, Germany, Angola, and the
UK, respectively – there has been a 40% decline in construction
materials exports (AICEP 2013). This report argues that construction
materials export improvement is not only possible, but is associated
with US market access and growth. Specifically, sustainable export
strategies for the US market can continue to stabilize Portuguese
export competitiveness and GDP and boost economic recovery. This
is further confirmed by examining Portugal’s five-year construction
2 “Consistently outcompetes” is measured by competition in all 5 or 4 years of the trend

analysis; “occasionally outcompetes” refers to competition within 2 or fewer years.
3 Portugal was ranked 51st for 2013-2014, 49th for 2012-2013, 45th for 2011-2012, and 46th for
2010-2011.

• 21
materials trade surplus, which increased from €600,000 in 2008 to
€1.46Million (M) in 2012 (AICEP 2013).
Reflecting on Figure 1.2, there are prospects for enhancing the

construction industry’s recovery through sustainable export strategy
development in the US market. Table 1.1 shows the progressive
annual rate of Portuguese exports to the US in the general category
of building materials, which includes the subsectors of wood
products, metals, stone and glass, machines, and plastics and
rubbers. Exports in building products, across sector categories,
show an average annual growth rate of 16%. With current trade
growth forecasts, Portuguese export development in the US market
appears positive.
Table 1.1 – Portuguese Construction Materials Export to the US

(Data: OEC 2014)
Change
Construction materials Sectors 2011 2012 2013 2014
since 2011
Wood $190M $199M $197M $218M +7.7%
Metals $67.5M $79M $104M $113M +46.2%
Stone and Glass $82.3M $96M $104M $102M +22.3%
Machines $238M $299M $297M $319M +28.2%
Plastics and Rubbers $67.7M $64.3M $112M $104M +38%
Total Export Value $691M $738M $814M $857M +16.2%
1.3 Report Methods
The report presents a market analysis for Portuguese construction

materials SMEs looking to develop their export strategy for the US
market by focusing on five unique factors that influence sustainable
market growth, including:
1. Internal (US) competition

2. Export competition (global and European)
3. Legal regulations and compliance
4. An insider’s perspective of the US market/ interviews with US
sector executives
5. Portuguese strengths and challenges.

The assessment relies on primary and secondary data and
qualitative and quantitative research methods, such as
–– one-on-one interviews with US companies

–– customized surveys
–– desk research
–– case studies
–– comparative and statistical analysis
–– econometric forecasting and modeling
–– data collected and cleaned from the United Nations’
Commodity Trade Statistics Database (Comtrade) by the
Observatory for Economic Complexity (OEC) and report parties.
These methods were selected for their appropriateness and

effectiveness in addressing the needs of the report. For example, the
analysis requires in-depth, regional, and state-specific information
from American construction materials importers, distributors,
wholesalers, retailers, and contractors, and interviews are the most
appropriate primary source for this data. Whereas, competition
analysis is most appropriately conducted through statistical and
econometric analyses. After cross-checking sources of statistical
data, such as the World Trade Organization (WTO), IMF, World Bank,
the report relies mostly on Comtrade.
The OEC, a project conducted by the Massachusetts Institute

of Technology’s Media Lab Macro Connections Group, provides
collection, cleaning, filtering, sorting, and organization of
Comtrade’s data and thus, is the predominate secondary data
source in the report. Except where explicitly cited, the data
referenced in the report is from OEC (2014). Global, regional, and
national trade data is composed of large datasets, and time is
required to process and clean data. For this reason, the report’s
most recent data, in most cases, is from 2014. Data from 2016 is
not yet available, and data from 2015, in some cases, is not yet
processed.4
An expansive discourse exists on varied methods for collecting

and analyzing data, the methods employed in the report are
consistently deemed the most appropriate across industries and
individuals. For example, the report uses interviews with US sector
executives to understand the challenges to Portuguese construction
materials exporters. The method is designed to fit the nature of
the inquiry. Similarly, the report aims to minimize detail that does
not increase clarity, such as assessing Portugal’s top ten export
competitors rather than top 20.
4 Comtrade has data from 2015, and it is utilized throughout the report where appropriate;
however, their data does not take into account exports that are refused by US Customs and
Border Protection. OEC’s data does.

• 23
1.4 Report Subsectors and Product Categories
The report assessed export development and growth opportunities

in these five subsector categories:
1. Hardware from the metal sector

2. Building ceramics from the stone and glass sector
3. Electrical materials (mostly) from the machines sector
4. Polyvinyl chloride (PVC) materials from the plastics and rubbers
sector
5. Metalware from the metal sector.
Within these subsectors, the product categories examined range in

price point, export volume, and physical size. Under hardware – the
largest product category – they include padlocks, metal mountings,
other metal fasteners, hinges, handles, faucets and bathroom
faucets, taps, toiletry, and related products; within the ceramics
category, products range from glazed and unglazed ceramics,
roofing tiles, ceramic building materials, and bricks. Electrical
materials are products including and related to lighting fixtures,
low-voltage protection equipment, plugs, sockets, switches, and
electrical transformers and control boards, and tubes, valves, pipes,
and fittings, other plastic sheeting, and polyvinyl alcohol (PVA)
products. Finally, the metalware products include iron pipes and
accessories, stovetops, cookers, and barbecues, housewares, and
toiletry. All product categories selected for analysis have US import
values in the range of millions or billions of dollars and carry the
potential to enhance Portuguese export competition, GDP, and
economic recovery.
1.5 Conclusion
The report is structured by the five analytical factors presented in

Section 1.3. The first factor (Section 2: internal competition) provides
a detailed snapshot of the extensive competition Portuguese
construction materials SMEs face in the US market. Second, Section
3 examines Portugal’s global and European competitors, focusing
on one product category from each subsector to demonstrate
how access to the world’s largest single-nation import market
can impact Portugal’s trade competitiveness. This section also
addresses how Portugal can outperform EU competitors like the
Czech Republic, Greece, Poland, the UK, Latvia, Lithuania, Slovakia,
Bulgaria, Romania, and Estonia.
Following the complete competition analysis, Section 4 transitions

to legal regulations and compliance issues – essential information
for SMEs in all stages of export development. Section 5 provides
Portuguese SMEs an insider’s perspective of the US market in
Section 5, including the importance of trends that are often
discounted by European exporters whose markets rely more on
tradition. The section’s key theme is that exporters have one shot in
the US market – be prepared to adapt and revise. Section 6 reviews
the findings of the previous sections’ competition and supply /

demand analyses and uses this information to take a sophisticated
approach to cost / benefit analyses by examining Portuguese SMEs
strengths and challenges in the US market.
The report’s value goes beyond the traditional consultative process

by offering varied and targeted strategies for sustained market
growth in the US market. The report offers a five-year strategy for
Portuguese companies to compete with countries that are currently
exporting in higher volume than Portugal, such as Bulgaria, Estonia,
and Romania, as well as a more ambitious, longer-term plan that
targets competitors like Germany, Italy, and Spain. These goals are
then tied to European Commission and Portuguese national trade
development strategy and incorporated into the planned shift
towards increasing exports in advanced manufacturing.

• 25
Section 2:
Internal (US)
Competition
2.1 Introduction
The US, being the largest single-country import destination for

goods and services, is a highly competitive market. Compete 2020,
Next Challenge USA, and the report all focus on competition
because of the dynamic nature of the US market. The American
market has the unique ability to easily replace one producer’s
products with another if products do not conform to price and
quality expectations.
This section profiles US construction materials import competitors.

A frequency analysis is used to determine the top overall
competitors. Then competitors within specific product categories
from each subsector (hardware, ceramics, electrical, PVC, and
metalware) are identified through an in-depth examination.
Because competition is the focus, the analysis also exposes
countries that Portugal has potential of outcompeting in the US
market. Drawing on these analyses, the section makes preliminary
recommendations for Portuguese SMEs in specific product
categories and subsectors based on internal, US competition.
2.2 Top US Producers
This section presents the most competitive construction materials

US producers; it speaks to the general state of competition in
the US construction materials market, and the following section
reflects the specific state of US import competition in the five
subsectors selected for study. The discussion includes the top
seven construction materials US producers, Portugal’s ranking, and
Portugal’s most significant construction materials US competitors.
Through a frequency analysis of the product categories in Section
2.3 from 2014 to 2011, the report finds that the top US construction
materials producers are from the following countries:
1. China
2. Mexico
3. Germany
4. Japan
5. Italy
6. Canada (tied)
7. Other Asia (tied).
It is not surprising that China is first, or that Mexico is second, given

its proximity to the US, preferential US trade agreements like the

• 27
North American Free Trade Association (NAFTA), and low labor
costs. Germany is an advanced manufacturer, perhaps the most
competitive in Europe. Italy, also highly competitive in and out of
Europe, has lower labor costs and produces many basic material
goods, similar to Mexico. As a country with a negative birth rate and
higher labor costs, Japan is somewhat surprising to see in the top
five. A negative birth rate is typically associated with a declining
construction industry, but the proximity between Japan and the
US’ Pacific ports may be an indicator in Japan’s competitiveness.
The same could be said for “Other Asia”.5 However, the labor costs
of other Asian countries are much lower than Japan’s. Considering
NAFTA and Canada’s proximity, it might be expected that Canada
would perform better in the US market; in this industry (or the
product categories assessed here), this is not the case.
Shifting to Portugal, the report finds that across twelve product

categories from 2014 to 2011, Portugal was a top US import competitor
twice (unglazed ceramics 2014 and 2012). There were five countries
that were top US import competitors within the same frequency:
»» Ukraine
»» Nicaragua
»» Trinidad and Tobago
»» Australia
»» Denmark
It is interesting to see the countries that were top US producers

within the same frequency as Portugal, but difficult to make
generalizable comparisons. Like Portugal, Trinidad and Tobago,
Australia, and Denmark are “high income” countries (World Bank
2016i). Both Ukraine and Nicaragua – countries with varied political,
economic, and geographic issues that potentially affected their
trade competitiveness since 2014 – are “lower middle” income
countries (World Bank 2016i).
Portugal’s most similar construction materials US import competitors

come from lower-middle and high-income countries; there are no
similar competitors from the “upper-middle” income countries – the
category between lower-middle and high-income countries within
the World Bank ranking system. This report argues this is evidence
of the truly open nature of the US construction materials market. It
also appears that, overall, labor costs play less of a role in this industry;
price, shipping times (product availability), payment terms, and
product quality and service matter more in the US market.6
I don’t think anyone in our company has ever believed in the race
to bottom (selling products for the lowest rate); we do value added,
quality products, and customer service. We go out of our way to
give the customer what they need. The more customer service you
give, the more they come back to you for the expertise, and I guess
that’s how we feel about buying foreign products.7
5 Other Asia is a conglomeration of several small Asian nations.
6 See Interview 6, Appendix 4.
7 Interview 4, Appendix 4.
These early indicators of Portugal’s export competitiveness in
the US construction market are examined in detail by assessing
competition in each subsector and product category below.
2.3 US Construction Materials Market Competition
After profiling the top US producers, the section analysis explores

the countries dominating the US market for twelve construction
materials product categories by examining five-year trends. Within
each subsector, competition in two to three product categories
that have been selected for development by the Portuguese
report parties is assessed. The products were selected based on a
range of features, including price per product, export volume, and
Portuguese SME industry factors.
First, product categories from the hardware subsector – padlocks,

metal mountings, and other metal fasteners – are featured. Within
the ceramics subsector, glazed and unglazed ceramics, as well
as roofing tiles, are explored. Third, electrical materials, such as
low voltage protection equipment and light fixtures, imports are
detailed. Following, the PVC subsector product categories – plastic
pipes and other plastic sheeting – are profiled. Finally, metalware
product categories are examined with a focus on iron pipes and
iron stovetops.8 This assessment of internal, US market competition
across twelve products provides a solid foundation for the report’s
recommendations to Portuguese SMEs on export development and
growth for the US market.
2.3a Hardware Subsector Product Categories

The subsector category of hardware features a large range of
products, including locks, hinges, handles, faucets, taps, toiletry,
and related products. The report opts to examine the three product
categories. First, padlocks are examined because they are an
import market that seems to be largely influenced by preferential
trading relationships, namely NAFTA – freight flow values between
NAFTA countries reach $90.4B – and the US’ deepening trade
relationship with China (DoT 2016). Exploring how preferential
trading relationships affect competition helps determine if and how
Portuguese SMEs can be competitive in this product.
Second, US import competition in metal mountings is assessed.

Like many hardware product categories, metal mountings are
a relatively small market within the industry, $5 Million (M) in
2014, and competition is less likely to be dominated by a single
country because many nations can produce the products cheaply
and supply chains need to be diverse for such commonly used
products. Third, other metal fasteners are examined because they
have a relatively low product price, and competition is generally
dominated by China. This assessment aims to determine if Portugal
can compete sustainably in a market heavily dominated by the
8 All HS four-digit product category codes are featured in Appendix 2 in Volume Two of this
report.

• 29
world’s largest exporter. The product categories explored in this
analysis aim to give a snapshot of US competition in the hardware
subsector. When snapshots from the four other sectors are
assembled, a larger picture begins to form.
Beginning with padlocks, out of almost 1220 global product

categories, they are the 371st most (economically) complex and
270th most traded (OEC 2014). In 2014, the US import market value
for padlocks was $2.2B, a lucrative market value for a comparative
small (in weight) product. A product’s weight has cumulative
impact on export costs, another important figure in developing
and revising sustainable export strategies. Figure 2.1 shows the top
ten padlocks producers’ share of the US market in 2014. Of the
$2.2B total US import market, Figure 2.2 shows each of the top ten
2014 padlocks producers’ market value, compared to Portugal’s US
market share (.19%).9
Figure 2.1 – Top Ten US Padlocks Producers (2014)
◼ Mexico
◼ China
◼ Other Asia
◼ Canada
◼ Germany
◼ South Korea
◼ Dominican Republic
◼ Thailand
◼ Japan
◼ Philippines
◼ Portugal
Figure 2.2 – US Padlocks Imports Market Value (Millions) By

Country (2014)
◼ Mexico
◼ China
◼ Other Asia
◼ Canada
◼ Germany
◼ South Korea
◼ Thailand
◼ Japan
◼ Philippines
◼ Portugal
9 The terms market value and market share are used consistently in the report. Market value
is measured in currency, and share is a percent.

In 2013, the US import market value was $2.17B. Figure 2.310 shows the
top ten producers’ market share. Portugal’s market share was .054%
and value was $1.17M. Some notable changes from 2013 to 2014
were that Canada overtook Germany as the fourth largest padlocks
producer and Portugal’s share of the US market almost quadrupled.
The US import market in this year increased by only $30,000, which
makes Portugal’s 2013 $3M export growth especially significant.
In 2012, the US import market value was $2.03B. Figure 2.4 shows
the top ten producers’ US market share. Portugal’s market share
was .026% and value was $532,000 (K). Notable changes were
that Japan went from the fifth largest producer to the ninth and
Portugal’s share of the US market doubled. In 2011, the US import
market value was $1.87B. Figure 2.5 shows the top ten producers’
market share. Portugal’s market share was .038% and value was
$704K. From 2011 to 2012, Canada and South Korea swapped
rankings, and Portugal’s share of the US market decreased $172K.
These trends have general and specific implications for Portuguese

SMEs. Generally, Mexico and China have preferential trade
agreements or status with the US, and this appears to be a
factor in competitiveness in this product category. Other Asia –
consistently the third largest padlocks producer – is comprised of
several smaller Asian states, which poses difficultly for even strong
competitors like Germany.
Although Portugal does not hold a large share of US padlocks

imports – ranging from .025% to .19% – there are promising
outcomes of this competition analysis. The first is that padlocks
exports have reached “significant” levels; significance, for the report’s
purposes, is greater than 0.0%. This means padlocks exports’
contribution to GDP is also now significant due to what appears to
be a successfully implemented export strategy. For SMEs looking
to develop or grow exports of this product category, the strategy
that resulted in a $3M increase between 2013 and 2014 should be
identified and examined; a value increase of this size in a single year
suggests industry collaboration occurred. This strategy should be
compared to Portuguese exporters experiences in the US market
between 2011 and 2012, which decreased Portugal’s market value by
almost a quarter.
The second is that while the top five producers of padlocks do not
seem to fluctuate – and Mexico and China are dominant in this
product category – the countries at the middle to lower ends of
the top ten ranking fluctuate year to year. This means there is room
for Portugal to enhance its market share. Being a top five or top
ten US producer is not as important as increasing relative market
share in this product category. In 2014 for example, Portugal held
.19% of the total US import market for padlocks; Sweden held .22%
with $4.86M. That .03% difference equates to a market value of
$600,000.
10 See Appendix 1 in Volume Two of this report for all Figures after 2014 across product
categories.

• 31
Moving to metal mountings, out of almost 1220 global products,
they are the 250th most complex product and 110th most traded,
more complex and traded than padlocks (OEC 2014). The US import
market value for metal mountings in 2014 was $5B, another highly
lucrative market for a comparative small (in weight) product. Figure
2.6 shows the top ten metal mountings US producers’ market share
for 2014. Of the $5B total import market value, Figure 2.7 shows
each of the top ten producers’ market value, compared to Portugal
(.22% total US import market share).
Figure 2.6 – Top Ten US Metal Mountings Producers (2014)
◼ China
◼ Canada
◼ Mexico
◼ Other Asia
◼ South Korea
◼ Germany
◼ Japan
◼ Austria
◼ Italy
◼ India
◼ Portugal
Figure 2.7 – US Metal Mountings Imports Market Value

◼ China
◼ Canada
◼ Mexico
◼ Other Asia
◼ South Korea
◼ Germany
◼ Japan
◼ Austria
◼ Italy
◼ India
◼ Portugal
In 2013, the US import market value was $4.84B. Figure 2.8 shows
the top ten metal mountings producers’ US market share; Portugal’s
market share was .17% and value was $8.13M. Some notable changes
in this product market from 2013 to 2014 were that competition
increased among South Korea, Germany, and Japan, the total market
value increased slightly, and Italy and India’s share of the US market
decreased while Portugal’s share increased by a quarter.

In 2012, the US imported metal mountings market value was
$4.84B. Figure 2.9 shows the top ten producers’ US market share,
and Portugal’s share was .16% and value was $7.91M. Notable
changes were that the top three producers’ share of the US market
declined and Other Asia outcompeted Mexico, as they did in 2014.
South Korea, Germany, and Japan continued to try to outcompete
each other, as did Austria, Italy, and India – whose share of the US
market increased, while Portugal’s share decreased slightly. In 2011,
the US import market value was $4.45B. Figure 2.10 shows the top
ten US producers’ share of this market value. Portugal held .15%,
and its market value was $6.75M. From 2011 to 2012, market shares
and values stayed relatively consistent across the top ten with Italy
outcompeting India, as it did in 2013 and 2014. Though Portugal’s
share of this market increased only .01%, this translated into a value
increase of $1.16M.
The findings about US metal mountings imports from 2014 to 2011,

first, are that the market is stable in terms of competition, and like
the padlocks analysis, preferential trade agreements likely play a
role. While stability may prevent SMEs from breaking into the top
ten or top fifty – in 2014, Portugal was ranked 72th for US metal
mountings import competition – that same stability also supports
a steady increase in market value, of over $550M. This absence of
market volatility may indicate that this category of product category
presents an excellent opportunity for Portuguese SMEs to develop a
more competitive US market strategy.
Of the ten countries that most recently outcompeted Portugal in

the US metal mountings import market, all are European: Ireland,
Iceland, Italy, Lithuania, Latvia, Macedonia, Malta, Netherlands,
Norway, and Poland, respectively. Of the ten countries that Portugal
outcompeted most recently, seven are also European (or part of the
European continent): Romania, Russia, Serbia, Slovakia, Slovenia,
Sweden, Ukraine, Aruba, Antigua and Barbuda, and the Bahamas,
respectively. Interestingly, the European countries that Portugal
outcompeted in this product category and year are countries that
Portugal had difficulty outcompeting when analyzing the five-year
trends in Section 1.1. Metal mountings exports, specifically, offer
a unique opportunity for Portugal to enhance competitiveness
through US market access and growth.
The final product category – other metal fasteners – is the 622nd

most traded and 551st most complex product out of 1220 (OEC
2014). They are less complex and less traded than either padlocks
or metal mountings (250th most complex product and 110th
most traded). This category includes products such as hinges,
handles, clasps, buckles, hooks, eyes, and rivets. The US import
market value for other metal fasteners in 2014 was $148M, a small
value in comparison to the other two product categories. Figure
2.11 shows the top ten other metal fasteners US producers’ market
share for 2014. Of the $148M total US import market, Figure 2.12
shows each of the top ten other metal fasteners producers’ market
value, compared to Portugal’s .49% market share value. While the
total value for this product category is lower than other hardware
products, Portugal’s share of this market is significantly larger.

• 33
Figure 2.11 – Top Ten US Other Metal Fasteners Producers (2014)
◼ China
◼ Other Asia
◼ UK
◼ France
◼ Mexico
◼ Germany
◼ South Korea
◼ Italy
◼ India
◼ Austria
◼ Portugal
Figure 2.12 – US Other Metal Fasteners Imports Market Value

◼ China
◼ Other Asia
◼ UK
◼ France
◼ Mexico
◼ Germany
◼ South Korea
◼ Italy
◼ India
◼ Austria
◼ Portugal
In 2013, the US imported other metal fasteners market value was

$161M. Figure 2.13 shows the top ten producers’ US market share;
Portugal’s share was .4% and value was $646K. Some notable
changes in this product market were that five out of ten top
producers’ share decreased (China, UK, France, Mexico, Japan).
Austria replaced Japan as a top ten producer, and Portugal’s share
of the US market increased more than 12%.
In 2012, the US import market value was $108M. Figure 2.14 shows
the top US imported other metal fasteners producers’ market share.
Portugal held .082% and $147K in value. Notable changes include
Mexico’s share decreased by more than 2.5%, a $5.8M loss and both
Italy and South Korea suffered share losses. Canada lost its top
position, and Portugal’s share increased fivefold, by almost $500K.
The 2011 market value was $165M, and Figure 2.15 shows the top ten
producers’ share. Portugal claimed .01% and $20.5K of this market.
From 2012 to 2011, competition varied: UK outcompeted Mexico, as
they did in 2013 and 2014; Germany outcompeted France; and India
outcompeted Japan. Portugal’s share of this market increased 720%.

Similar to other hardware product categories, Portugal does not
hold a dominant position within the US metal fastener import
market; its share did increase 4,800% and $704.5K in four years.
The significant share increase highlights that there are general
and specific takeaways that are encouraging for Portuguese SMEs.
Beginning with a general market assessment, China is the major US
producer of other metal fasteners imported into the US. However,
China’s share of the US other metal fasteners market has declined,
from 42% in 2011 to 40% in 2014; it peaked in 2013 at 43%.
The top ten producers are generally stable, but their rank changes
frequently; one country easily replaces another, as was the case in
Japan in 2011 and 2014, India in 2012, and Canada since 2012. The
conglomeration of states included in Other Asia consistently held
the second largest share of the US other metal fasteners import
market, and the UK was the third largest producer three of four
years. These findings indicate that preferential trade agreements
may play less of a role in this product category.
This may also be due to the low price point for other metal
fasteners. Where product prices are low, preferential trade
agreements are less of a factor because fewer costs are associated
with expressing preference, i.e.: job loss from domestic production.
This is also true of value chain products – produced collectively
by a single or collection of manufacturers to increase competitive
advantage – which is consistent with the economic complexity
indicator for other metal fasteners. Because of the product’s low
price point, there is also a degree of risk that accompanies export
development within other metal fasteners, such as the investment
costs of export development relative to the market value gain. In
2011, the total US market value was $165M, in 2012, $108M, in 2013,
$161M, and in 2014, $148M. The four-year average market value for
this product category was $145.5M. In 2012, the US market was
$37.5M below average, and in 2014, the US market was just above
average; growth and profit are less stable.
Because Portugal has only recently (2012) begun to export to the

US in significant volumes (greater than 0.0%), both investment
costs and any market loss are likely to be less significant. The
report recommends exercising caution because SMEs have greater
difficulty managing risk and face more market barriers compared to
large producers. However, Portugal’s current other metal fasteners
exporters seem adept at managing this risk. In 2014, Portugal
was the 18th largest US producer of other metal fasteners. The ten
countries that most recently outcompeted Portugal are South
Korea, Italy, India, Austria, Japan, Canada, Hong Kong, Switzerland,
Israel, and Romania – demonstrating how close Portugal is to
the top US competitors for this product. Its nearest competitor,
Romania, has a $285K market advantage over Portugal. India, which
could be considered a much higher-level competitor for Portugal,
has a $3.04M market advantage.
This should inform the collective and individual strategies of

Portuguese SMEs exporting or looking to export other metal
fasteners to the US. As with padlocks, particular attention should
be paid to reviewing industry changes and strategy development

• 35
that occurred from 2011 to 2013 to ensure that US market gains are
sustainable. Overall, Portuguese competition within other metal
fasteners has been excellent. Although China heavily dominates this
market, there is opportunity for continued growth through careful
revision and sharpening of existing strategy.
Assessment of Portuguese Hardware Products Competition

in the US Market
Pulling together the analyses of Portuguese hardware product
categories assessed here – padlocks, metal mountings, and other
metal fasteners – the report has reflected various US market
competition conditions and features, including the impact of
preferential trade agreements, Chinese market proliferation, market
access barriers, and market volatility. Generally, the top five US
producers have stable market positions, meaning there is little
opportunity to proliferate the highest levels within the hardware
subsector. There are fluctuations across most hardware products
within the top ten producers, but with limited exception to other
metal fasteners – a somewhat volatile product category – Portugal
is not yet in a position to compete with the top 75 US producers in
the hardware subsector.
However, this assessment reveals that existing strategy efforts in

padlocks from 2013 to 2014 and in other metal fasteners from 2011
to 2013 have been successful. In padlocks and metal mountings,
small improvements in US market share can contribute to
significant GDP gains for Portugal and growth for SMEs. The key
is to utilize and revise strategy to keep US export levels consistent.
Several retailers interviewed suggested they would be interested
in Portuguese hardware products if price and availability were
comparable to his Chinese imports. One indicated that Chinese
products are more competitive when “you don’t need something
special”, but consistency and volume are key to gaining a
competitive edge in the US market.11 Another commented that:
“most of our products come from China or Turkey; whoever has the
product at the lowest price and can get it to us the fastest is who
we go with.”12
Opinions appear to be mixed on whether Chinese products are

suitable for the US market, and whether cheap Chinese products
are shaping US preferences to imported products overall. “There’s a
bad industry reputation with some foreign products, especially the
Chinese stuff.”13 An engineer working for a large, industry-leading
contractor highlighted that it’s widely known within the industry that
Chinese products, though often cheapest, lack quality.14 A supplier
interviewed suggested that distributors are also aware that some
foreign suppliers, namely Chinese and Russian, are not interested
11 Interview 7, Appendix 4; this retailer indicated that Simpson Strong-Tie or USP Structural
Connectors, a Mi-Tek brand product, are the lowest priced, best value, and most reliable
wholesalers and distributors for most hardware products on the US market.

in developing relationships and servicing products that they export.
“They are exporting it because it’s cheap”, and Portuguese SMEs may
offer value to US retailers by expressing a genuine concern to listen to
retailers needs and provide quality service.15
This assessment also recognizes that though construction materials

SMEs are in competition with each other, export development and
growth cannot occur without holistic, industry-wide, long-term,
sustainable strategies. The benefits of enhancing Portuguese export
competition, as demonstrated by examining the US market for
metal fasteners, are not limited to the US market; improving US
import competition will have a concurrent impact on Portugal’s
exports within the EU, as well.
2.3b Building Ceramics Subsector Product Categories

The subsector category of building ceramics features a smaller
range of product categories that includes glazed and unglazed
ceramics and roofing tiles. This report assesses these three product
categories for two reasons. Firstly, unglazed ceramics fetch a
lower price on the US (and the international) market but are more
durable and used more widely; glazed ceramics have a higher price,
require more artisanal manufacturing, and are more susceptible to
wear and replacement. There are advantages and disadvantages
to expanding exports in both product categories, although one
requires more customer services and the other requires higher
production costs. Secondly, international demand for Portuguese
building ceramics has been consistent (AICEP 2013). However,
interviews conducted for this report suggest that the US market
for glazed ceramics is not as strong; other materials are preferred.
Portugal is also a large, globally-renowned producer of roofing tiles,
and they were selected to ascertain if the US market is a steady
market for continued export development of this product category.
Developing low-risk, sustainable strategies in this subsector presents
difficult choices and diverse challenges for Portuguese SMEs.
Beginning with glazed ceramics, out of almost 1220 global products,

they are the 806th most complex and 255th most traded product
(OEC 2014). This product category includes flags, paving and hearth
materials, wall tiles, and mosaics. The total US import market value for
glazed ceramics in 2014 was $1.23B, the most lucrative market of all
ceramic building products examined here. Figure 2.16 shows the 2014
US market share for imported glazed ceramics, and of the total market
value, Figure 2.17 details each of the top ten 2014 glazed ceramics
producers’ market value, compared to Portugal’s share (.6%).

• 37
Figure 2.16 – Top Ten US Glazed Ceramics Producers (2014)
◼ Italy
◼ China
◼ Mexico
◼ Spain
◼ Turkey
◼ Brazil
◼ Peru
◼ Canada
◼ Japan
◼ Columbia
◼ Portugal
Figure 2.17 – US Glazed Ceramics Imports Market Value

◼ Italy
◼ China
◼ Mexico
◼ Spain
◼ Turkey
◼ Brazil
◼ Peru
◼ Canada
◼ Japan
◼ Columbia
◼ Portugal
In 2013, the US import market value was $1.29B. Figure 2.18 reveals
the top ten glazed ceramics producers’ US market share; Portugal’s
share was .51 % and value was $6.61M. Some notable changes in
this product market were that Italy outcompeted China for the
top producer position by increasing their market share 2% and
a resulting $7B. With the exceptions of Brazil and Japan, all top
producers’ market share increased, and Portugal’s market value
increased by almost $1M or 18%.
In 2012, the US glazed ceramics import market value was $1.08B.

Figure 2.19 shows the top producers’ US market share at time when
Portugal’s share was .54% and value was $5.87M. From 2012 to 2013
the US market increased $210M, and China and Italy continued
to outcompete each other – as did Turkey and Brazil. With the
exception of Mexico (where market shares decreased 1%), all top
five producers increased their US imports; the remaining top ten
and Portugal lost market shares, demonstrating that gains were
concentrated among top US producers this year. The 2011 US import
market value was $1.01B, and Figure 2.20 highlights market shares.
Portugal’s share was .29%; value was $2.88M. Notable changes
were that Italy maintained the top producer position, Colombia

outcompeted Peru, and top producers experienced varied losses
and gains. From 2011 to 2012, Portugal almost doubled its market
share with an almost $3M gain.
Portugal has demonstrated excellent performance by improving

glazed ceramics exports more than 100% over four years. Portugal’s
ability to secure a larger share of this market has resulted in over
$4.5M gains. In 2011, Portugal was the fourth largest European
exporter of glazed ceramics; Italy dominates the European, global,
and American market in this product category. Since 2011, Portugal
has held their position as the third largest European glazed
ceramics US producer, outcompeting San Marino – another top
European competitor in the US market.
San Marino’s competitiveness can be linked to its association

with the quality of Italy building ceramics products, which has
facilitated San Marino’s high rank as a US producer. Table 2.1 reveals
that since 2012, Portugal has outcompeted San Marino, and this
has added an average of $1.9M annually for Portugal. However, as
Portugal becomes more competitive in the US glazed ceramics
market, so too does San Marino, and it is likely San Marino’s goal
is to outcompete Portugal. The analysis suggests that Portuguese
SMEs should monitor San Marino’s glazed ceramics exports
quarterly where possible. Where San Marino’s exports are exceeding
Portugal’s immediate focus should be placed on increasing exports
through existing relations, as to not lose their competitive edge.
Table 2.1 – Portuguese / San Marino US Import Competition
2011 Rank 2012 Rank 2013 Rank 2014 Rank
Portugal 18th 12th 13th 12th
San Marino 15th 15th 14th 14th
Difference (Diff) $568K $1.7M $1.4M $2.7M
Portuguese SMEs could also aim to better compete with Europe’s

second largest US producer: Spain. The gap between Portuguese
and Spanish US imports is large; however, the gap between
Portugal and Canada less so. A trend analysis highlights that the
gaps between Portugal and Thailand, Colombia, and Japan are also
narrowing. Table 2.3 examines these US glazed ceramics import
competitors and finds that Portugal overtook Thailand, top ten US
producer from 2011 to 2013. If Portugal’s average annual growth
rate (23%) continues and US market trends remain stable, Portugal
could become more competitive than Colombia (-12% average
annual growth) and Japan (.5% average annual growth rate) in this
product category. Outcompeting Colombia and / or Japan would
enable Portugal to become a top ten US glazed ceramics producer.

• 39
Table 2.2 – Portuguese US Glazed Ceramics Import
Competition (Millions)
2011 2012 2013 2014

Value Diff Value Diff Value Diff Value Diff
Portugal $2.9 $5.9 $6.6 $7.4
Spain $84.1 -$81.3 $93 -$87.1 $114.3 -$107.7 $123.5 -$116.1
Canada $4.2 -$1.3 $0.2 $5.6 $9.4 -$2.8 $10.9 -$3.4
Colombia $16.7 -$13.8 $11.9 -$6 $12.9 -$6.3 $9.7 -$2.3
Japan $10.4 -$7.5 $9.7 -$3.8 $10.2 -$3.6 $10.2 -$2.7
Peru $15.2 -$12.3 $14.8 -$9 $14.7 -$8.1 $17.2 -$9.8
Thailand $11.9 -$9 $11 -$5.2 $10.5 -$3.9 $5.5 $2
Moving to unglazed ceramics, out of almost 1220 global products,

this product category is the 630th most complex and 480th most
traded product (OEC 2014). The 2014 US import market was valued
at $259M, a comparatively smaller market for unglazed flag, paving,
hearth, wall tiles, and mosaic products. Figure 2.21 shows 2014 US
market shares for unglazed ceramics and of the $259M total import
market, Figure 2.22 indicates the top ten US producers’ value.
Figure 2.21 – Top Ten US Unglazed Ceramics Producers (2014)
◼ Italy
◼ China
◼ Argentina
◼ Spain
◼ Germany
◼ Mexico
◼ Netherlands
◼ Canada
◼ Portugal
◼ Turkey

Figure 2.22 – US Unglazed Ceramics Imports Market Value
◼ Italy
◼ China
◼ Argentina
◼ Spain
◼ Germany
◼ Mexico
◼ Netherlands
◼ Canada
◼ Portugal
◼ Turkey
In 2013, the US import market value was $237M. Figure 2.23 shows
the top ten’s market share; in this year, Portugal’s share was .82%
and value was $1.94M. Some notable changes were that Argentina’s
share increased considerably – increasing its rank and market value
by $4M – and Hong Kong and Ukraine lost their top ten positions to
Turkey and Portugal. Portugal’s change in rank (from 11th in 2013 to
9th in 2014) did not result in a value gain, though total market value
increased because the market shares of the 9th and 10th largest
US producers of unglazed ceramics declined between 2013 and
2014. In 2013, the ninth and tenth producers (Ukraine and Canada)
possessed 1% and .84%, respectively, of the US market. Whereas in
2014, the ninth and tenth (Portugal and Turkey) held .75% and .59%.
In 2012, the US unglazed ceramics import market value was

$209M, and Figure 2.24 shows the top ten producers’ market
share. Portugal’s share was .9%; value was $1.88M. From 2012 to
2013, Italy and China’s market share decreased somewhat, and
Hong Kong was considerably less competitive, as was Germany
to a lesser extent. Portugal lost its position in the top ten due to a
.08% market share loss. Atypically, this resulted in a market value
increase of $60K, likely the result of an almost $30M total market
value increase. The 2011 US import market was $189M, and Figure
2.25 details the top producers’ market share. Portugal’s share was
.72% and value was $1.36M. From 2011 to 2012, Italy’s share increased
7% or $26M, and Argentina lost half its market share; Germany, the
Netherlands, Mexico, Colombia, and Canada also suffered value and
share losses, but Portugal continued to grow slowly.
Unglazed ceramics represents a unique case for analysis because of

its many irregularities, such as in 2013 when Portugal’s market share
declined but value increased. It is also a product category where
Portugal has performed well. The US market for unglazed ceramics
experienced large-scale competition changes across 2011 to 2014
when total values were fairly stable. Italy has continually increased
their dominance in this product category (70%), but the 2014 market
changes could indicate that US importers sought to diversify suppliers.
Unless policy or industry changes can be connected to import
inconsistency, particularly among Italy, Hong Kong, and Argentina

• 41
which have lost considerable market shares, Portuguese SMEs are
advised to be cautious in developing or enhancing export strategies for
this US market. Portugal has twice been in and out of the top ten US
producers, which shows a degree of focus in existing strategy.
The last product category, roofing tiles, presents a similarly complex

opportunity for SMEs. Out of almost 1220 global products, they
are the 468th most complex and 957th most traded product
(OEC 2014). The 2014 US import market value for roofing tiles was
$15.5M, the smallest of the building ceramics markets. Roofing
tiles include products such as chimney-pots, cowls, chimney liners,
and architectural ornaments. Figure 2.26 indicates the top ten US
producers, and of the $15.5M market, Figure 2.27 details top ten
competitors’ market value compared with Portugal, which held a
.55% share.
Figure 2.26 – Top Ten US Roofing Tiles Producers (2014)
◼ Mexico
◼ Colombia
◼ Spain
◼ Honduras
◼ Italy
◼ China
◼ France
◼ Japan
◼ Germany
◼ Turkey
◼ Portugal
Figure 2.27 – US Roofing Tiles Imports Market Value (Millions)

By Country (2014)
◼ Mexico
◼ Colombia
◼ Spain
◼ Honduras
◼ Italy
◼ China
◼ France
◼ Japan
◼ Germany
◼ Turkey
◼ Portugal
In 2013, the US roofing tiles import market was $20.6M. Figure 2.28
shows the top ten producers’ market share; Portugal’s share was
.35% and value was $72.4K. Notable changes in this product market

were that Mexico increased its competitiveness by 4%, paradoxically
resulting in a $1.86M market value loss, and Italy’s competitiveness
decreased by 5%, resulting in a $1.21M market value loss. The most
likely explanation for this confounding set of changes – where a
4% market gain results in a $1.86M loss and a 5% market decline
results in a $1.21M loss – is market volatility, as Figures 2.29 and 2.30
also demonstrate. Year to year, the total market value fluctuates
wildly (a $5.1M total loss from 2013 to 2014, for example); the top ten
producers are erratic, and the total number of producers also varies.
Despite this volatility, Portugal increased its market share by .2% in
this year.
In 2012, the US import market value was $16.7M. Figure 2.29 shows
the top ten roofing tiles producers’ US share of this market value.
Portugal’s share was .52%; value was $87.2K. From 2012 to 2013, the
total market increased by almost $4B, approximately a quarter.
Italy and Mexico experienced 5% gains and losses, respectively,
demonstrating the volatility trend. Portugal lost .17% of their market
share, but this resulted in only a fractional value loss, demonstrating
how widely the quarter increase in the total market value was
dispersed among producers. The 2011 US roofing tiles market value
was $17.8M, and Figure 2.28 highlights the top ten producers’ market
share. Portugal’s share was .32% and value was $56.6K. This was
the most stable year of the four-year period, characterized by share
changes of 3% or less for Mexico and China. There was relatively more
consistency among top producers, with the exception of Australia,
which lost 5.3% of the US market. Portugal made steady gains in 2012
by increasing its market value by over 50%.
The US roofing tiles market should be perceived as volatile,

particularly as it is tied to the 2008 financial crisis’ slowdown in
home building. Examining Figure 2.31, the analysis shows unstable
market values for even the top producer, Mexico, which experienced
almost $2M in losses in a single year. Countries such as Trinidad &
Tobago, Turkey, Nicaragua, Belgium-Luxemburg, Italy, and Australia
are particularly vulnerable in this market. Belgium-Luxemburg and
Trinidad & Tobago have missing values for some years, indicating their
exports either did not reach the US or were so low in value that they
were considered insignificant. Trade analysts would typically look for
political or economic instability to explain such phenomenon, but
with the exceptions of Turkey (upper-middle-income) and Nicaragua
(lower-middle-income), all are high-income economies that are
politically and economically stable (World Bank 2016i).

• 43
Figure 2.31 – Top US Roofing Tiles Producers Market Value
(Millions, 2014-2011)
◼ 2014
◼ 2013
◼ 2012
◼ 2011
The lack of consistent, comparable market features makes

assessing this product category and recommending export strategy
problematic. Colombia and Spain export the most consistent
volumes of roofing tiles to the US; Spain is a high-income country
– indicating economic and export stability – and Colombia is one
category lower, an upper-middle income country (World Bank
2016i). Even top, reliable industrial producers, such as Germany,
Japan, and Canada, performed poorly and inconsistently in this
product category, reflecting the lack of stability in this market.
Figure 2.32 shows Portugal’s US roofing tiles import performance
(2011-2014), and the effects of market volatility become transparent.
On average, Portugal holds a .44% share of the US roofing tiles
market. While Figure 2.32 explores market value in thousands –
rather than the millions in Figure 2.31 – investment barriers for SMEs’
export development in roofing tiles is higher when compared
with other product categories, especially the more lucrative and
opportunistic US glazed ceramics market.

Figure 2.32 – Portuguese Roofing Tiles US Import Value
(Thousands, 2011-2014)
A few findings emerge from this analysis. The first is that the price
point for these products is the subsector’s lowest, and when price
points are low, markets often feature greater degrees of stability.
With high-value products, competition is generally higher, and
competitiveness can help explain volatility. With lower price points,
large-scale total and producer market value loss is atypical, unless
the producer suffers an industry setback, but the analysis reveals
inexplicable value loss, across producers – both top ten and at the
lower levels – and across years. The market could stabilize over time,
but the general market value trend is a 3.4% annual decline (2011
-2014). Between 2014 and 2015, the total US roofing tiles import
market declined a further 2% (Comtrade 2016).
The second general conclusion is that Mexico dominates this market,

and though Colombia is consistently the second largest producer,
the difference, on average, between them is $6.26M. Mexico’s
dominance is unlikely to change, and it is further unlikely that any
competitor will come close to outcompeting Mexico. Even if Mexico
were to be outcompeted, this does not guarantee a value increase.
Therefore, the assessment argues that increasing competitiveness in
this market does not appear to increase SME’s profitability.
Assessment of Portuguese Building Ceramics Products

Competition in the US Market
What is immediately clear comparing these three product
categories – glazed and unglazed ceramics and roofing tiles – is
that the most lucrative and probable gains are in improving
competitiveness in glazed ceramics, where Portugal has improved
US imports 100% over four years. This assessment highlights the
importance of continuing to outcompete San Marino and also
how Portugal could best break into the top ten US producers by
outcompeting Colombia and / or Japan.
The most volatile market for export development is undoubtedly

roofing tiles, though the assessment acknowledges that Portugal
is one of largest exporters of specialized ceramic roofing tiles.

• 45
However, the US roofing tiles market is highly volatile at this
time due to its deep connection with the US’ recovering housing
market, which is discussed further in Section 5.2b. US market entry
for roofing tiles is, therefore, risky for any producer – domestic or
international, small or large. SMEs are advised to monitor progress
in the US housing market and adjust investment in US roofing
tiles export development accordingly. Unglazed ceramics are an
irregular market but more accessible than roofing tiles; the US
unglazed ceramics import market is more complex, and Portugal
has twice been in the top ten US producer in these years. Because
unglazed ceramics have a lower price point, risk taking may be
rewarded, as producers face less financial strain when investing
in export development in this market. Keeping an eye on market
diversity – and Italy’s performance and recovery in the US housing
market, in particular – should indicate whether risk taking is more
or less likely to be rewarded. If the market continues to diversify, risk
taking is encouraged; if Italy maintains such a significant share of
the US market, risk taking may prove less fruitful.
2.3c Electrical Subsector Product Categories

The electrical subsector features an extensive range of products,
including low voltage protection equipment (LVPE) and light
fixtures, which are assessed here. The report assesses these
products because they are frequently traded (high demand),
have a high price point, and China’s market dominance is slowly
decreasing. This combination of features indicates good prospects
for Portuguese SMEs within this subsector. Additionally because
SMEs can process smaller orders and these products are relatively
lightweight, there is tremendous potential to fill supply gaps when
US suppliers require products to reach them within a matter of
days – particularly when unforeseen events, such as acts of God or
freight issues, interrupt supply chains – and this is explored further
in Section 6.2b.16
Beginning with LVPE, out of almost 1220 global products, they are
the 274th most complex and 21th most traded product (OEC 2014).
This product category includes switches, control panels, relays, fuses,
switchboards, fuse gear, isolators, boards, and logic controllers. The
US import market value for LVPE in 2014 was $9.89B, and Figure
2.33 shows top ten producers’ market share. Of the almost $10B
market, Figure 2.34 details each of the top producers’ market value,
compared to Portugal’s share (.22%).
16 See Interviews 1, 3, 5, 13, and 14, Appendix 4.

Figure 2.33 – Top Ten US LVPE Producers (2014)
◼ Mexico
◼ China
◼ Japan
◼ Germany
◼ Other Asia
◼ France
◼ Canada
◼ Switzerland
◼ South Korea
◼ Portugal
Figure 2.34 – US LVPE Imports Market Value (Millions) By

Country (2014)
◼ Mexico
◼ China
◼ Japan
◼ Germany
◼ Other Asia
◼ France
◼ Canada
◼ Switzerland
◼ South Korea
◼ Portugal
In 2013, the US LVPE import market value was $9.77B, and Figure
2.35 reflects the top ten producers’ share of this value. Portugal’s
held .23% and accumulated $22.3M in value. Some notable changes
from 2013 to 2014 were that Other Asia outcompeted France,
Canada, Switzerland, and South Korea, enhancing their market
value $130M in a single year. There were slight changes overall in
regards to competition, market shares and values, including for
Portugal, but overall, it was a very stable year.
The 2012 US import market value was $8.9B. Figure 2.36 shows the
top LVPE producers’ US market share. Portugal’s share was .28%,
and its value was $25.2M. From 2012 to 2013, the total market value
increased almost $1B, which appears to have been the result of a
2% Chinese market share increase that resulted in an across the
board loss for most competitors, including Portugal, which suffered
a $3M loss. In 2011, the US import market was valued at $8.31B, and
the top ten producers’ share is detailed in Figure 2.42; Portugal’s
share was .2% and value was $16.6M. There were few notable
changes other than a steady increase in overall import market value
and an increase in Portugal’s market value by almost $10M – the
result of a .08% market share increase.

• 47
Unlike the complexity and volatility that characterized the building
ceramics subsector, LVPE market is remarkably stable and steady.
With the exception of Other Asia, market competition, values,
and shares do not fluctuate extensively. In 2013 when Other Asia
outcompeted several other producers, the result was a $130M value
increase. Comparatively in 2012, Portugal claimed an additional
.08% of the market, and the result was an almost $10M boost. This
begins to characterize why export development for this product
category holds such promise: a small market share increase yields
considerable results.
LVPE is also highly traded, and enhancing exports to the US will

produce rewards in other foreign markets. Though the product
is highly traded, it is not highly complex; investing in higher
production levels, decreasing shipping time, or enhancing product
reliability could stimulate demand for Portuguese LVPE. Figure 2.38
reveals that progress in this product category requires collaboration
from SMEs in the industry to develop collective responses to
declining competitiveness of Portuguese LVPE in the US market.
Figure 2.38 – Portuguese LVPE Import Value (Millions, 2011-2014)
Moving to light fixtures, out of almost 1220 products, they are the
188th most complex and 69th most traded product (OEC 2014). This
product category includes lamps, lanterns, illuminating, signaling
glassware, electric, ballast, luminaire, chandelier, and flood lights.
The 2014 US import market value for light fixtures was $9.5B, and
Figure 2.39 highlights the top US producers’ market share. Of this
market, Figure 2.40 shows the top ten producers’ market value,
compared to Portugal’s share (.035%).

Figure 2.39 – Top Ten US Light Fixtures Producers (2014)
◼ China
◼ Mexico
◼ Canada
◼ Germany
◼ Other Asia
◼ India
◼ Italy
◼ South Korea
◼ France
◼ Denmark
◼ Portugal
Figure 2.40 – US Light Fixtures Imports Market Value (Millions)

By Country (2014)
◼ China
◼ Mexico
◼ Canada
◼ Germany
◼ Other Asia
◼ India
◼ Italy
◼ South Korea
◼ France
◼ Denmark
◼ Portugal
In 2013, the US light fixtures import market value was $9.04B. Figure
2.41 shows the top ten producers’ US market share of this market
value. Portugal’s market share was .034%, valued at $3.12M. Some
notable changes were that the total market increased by $450M,
and Denmark overtook Philippines in the top ten. While Mexico and
China each lost 3% market share – a 6% market loss at the top – it
does not appear this share was redistributed among the top ten
producers. Combined with the 5% annual market value increase,
this loss among top producers may have resulted in more diversified
competition, or market shares may have increased at lower levels;
however, Portugal does not appear to have benefited from this
share dispersal.
The 2012 US import market value was $7.37B, and the top light
fixtures producers’ market share is displayed in Figure 2.42.
Portugal’s share was .038% and value was $2.79M. From 2012 to
2013, the market value grew by 23%, and China may have been a
key – but not exclusive – driver of this increase; it appears to be the
only top ten producer with market share gains. At the lower end
of the top ten, competitors varied, including Indonesia’s inclusion
in the top ten for the first time and Denmark returning as a top

• 49
competitor. Portugal’s share slightly decreased, but its market value
increased 12%; this supports the earlier referenced supposition
that market value increases are distributed beyond the top ten
competitors, which is positive for competition and, potentially,
SMEs. In 2011, the US market value was $6.76B. Figure 2.43 shows
the top ten producers’ share of this market. Portugal’s held .029% of
the US market, valued at $1.94M. Some notable changes from 2011
to 2012 were that the UK and Philippines were in the top ten, there
was solid growth (9% overall), and Portugal increased its market
value by 44% in one year.
There are reasons to be not only optimistic but excited about

Portuguese SMEs’ opportunities in light fixtures. The first is consistent,
high-level market growth. On average, this market is increasing
12% per year. Second, while China’s share of this market appears to
fluctuate from 64% to 67%, top producers also appear to fluctuate.
From 2011 to 2014, the UK, Philippines, Denmark, Indonesia, and
South Korea have come in and out of the top ten. This suggests
the US imported light fixtures market is flexible, dynamic, and that
producers can work their way into the top. However, in recent years,
stability in the top producers in this market has gone from the top
seven producers to the top nine, which suggests that over time top
producers have become more stable.
Another exciting feature of the US imported light fixtures market is

that value increases appear to be distributed outside of the top ten.
This means that a producer does not have to be in the top ten to
reap the benefits of market value gains, as Figure 2.44 demonstrates
in the case of Portuguese imports. The average annual growth rate
for this product category was 12%; the average annual growth rate
for Portugal was 14%. Portugal is outpacing average US light fixtures
market growth by 2%.
Figure 2.44 – Market Value (Millions), US Light Fixtures Imports

2011-2014
◼ Total Market
◼ Portugal

There are also reasons to be cautious, aside from China’s market
dominance in the US imported light fixtures market. Preferential
trade agreements and relationships appear to significantly impact
this market, particularly NAFTA; Mexico and Canada are also
consistently dominant in this market – albeit Canada to a lesser
extent. Caution is also warranted for this product category because
of the irregular spikes in the market, despite the steady pace of
growth overall. From 2012 and 2013, the total US light fixtures
market value increased 23%, and it is not uncommon for large,
sudden growth spurts to be accompanied by periods of decline.
Small, brief declines are visible in Figure 2.44, and from 2014 to 2015,
the US import market increased a further 9% (Comtrade 2016). This
assessment, therefore, encourages SMEs to develop exports in the
US light fixtures market, while being “cautiously optimistic” about
the pace of overall US imported light fixtures market growth.
Portugal, on average, ranks as the 35th largest US light fixtures

producer. Its consistent competitors are Egypt, Pakistan, Israel,
New Zealand, Brazil, and Singapore. Figure 2.45 shows Portuguese
competition with these producers over the four-year period. The
y-axis (vertical) represents competition rank; countries at the
top of the figure – consistently Egypt, Pakistan, and Israel – are
less competitive than those at the bottom – New Zealand most
consistently. Portugal will continue to have difficulty outcompeting
New Zealand and less difficulty outcompeting Egypt, Pakistan, and
Israel, although Israel is becoming more competitive. This leaves
Brazil, which experienced significant decline in market value in
2014, and Singapore as Portugal’s nearest competitors. However,
both of these countries import at inconsistent levels, demonstrating
slightly more instability when compared with Portugal. This
assessment advises that SMEs endeavor to understand their
own US import fluctuations in these years in order to enhance
competitiveness. This will also assist SMEs in outcompeting New
Zealand as a long-term strategy and Brazil and Singapore in the
short-term through US market access or growth.
Figure 2.45 – Portugal’s Competitors in the US Light Fixtures

Market
◼ Portugal
◼ Brazil
◼ Egypt
◼ Israel
◼ New Zealand
◼ Pakistan
◼ Singapore

• 51
Assessment of Portuguese Electrical Materials Competition in the
US Market
This subsector spans a large scope of product categories, and this
assessment has examined two with the current highest levels of
Portuguese export volume and US demand, explored further in
Section 5.2c. The US imported LVPE market is steady and stable,
but certain light fixtures market features present challenges to
Portuguese competitiveness. For example, Portugal is outpacing
the overall US imported light fixtures market growth rate, but
Chinese dominance, US FTAs, periods of overall market decline,
and inconsistent Portuguese export volume highlight difficulties
SMEs face with export development in this subsector. However,
this export subsector is lucrative and more secure than building
ceramics by comparison, and a producer need not be a top ten
producer to build a strong market. Examining the two electrical
materials product categories has also demonstrated that a small
increase in market share can translate into a considerably large
market value gain.
In addition, products in the electrical materials subsector tend to be

frequently traded, with high US demand and good price points – an
advantage for SMEs because growth may occur quicker, easier, and
in greater volume by servicing small to medium-sized orders for
US importers and distributors. In interviews, American companies
argued this was essential. something that they argued was essential
in interviews. Because the products themselves are lightweight,
there may be extra value in export development, as air cargo
remains possible for small, immediate orders. This combination of
factors, coupled with Portugal’s proximately to the US – particularly
when compared with China – are strong selling points when
developing relationships with potential US import and distribution
partners. US import markets – and trade in general – were
constricted in 2015 (as seen with the ceramics subsector and light
fixtures), but this subsector is strongly recommended for export
development. The report suggests export development strategies
should emphasize industry collaboration and cooperation to more
effectively respond to the competitive nature of the US market and
suppliers’ volume, timing, and project needs.
2.3d PVC Subsector Product Categories

The PVC subsector features a medium range of products, including
tubes, pipes, hoses, and their fittings (plastic pipes) and other plastic
sheeting. The report examines these products because they are
frequently traded (high demand) and Portugal’s exports to the US
are not significantly high (0.0% market share or above. Beginning
with plastic pipes, out of almost 1220 products, they are the 590th
most complex and 152nd most traded (OEC 2014). This product
category includes tubes, hoses, fittings, joints, elbows, and flanges.
The 2014 US import market value for plastic pipes totaled $2.01B.
Figure 2.46 outlines the top producers’ US market share for plastic
pipes. Of the total import market, Figure 2.47 sets out the top ten’s
market value, compared to Portugal’s share (.011%).

Figure 2.46 – Top Ten US Plastic Pipes Producers (2014)
◼ China
◼ Canada
◼ Mexico
◼ Germany
◼ Japan
◼ UK
◼ Other Asia
◼ Czech Republic
◼ South Korea
◼ Italy
Figure 2.47 – US Plastic Pipes Imports Market Value (Millions)

By Country (2014)
◼ China
◼ Canada
◼ Mexico
◼ Germany
◼ Japan
◼ UK
◼ Other Asia
◼ Czech Republic
◼ South Korea
◼ Italy
◼ Portugal
In 2013, the US imported plastic pipes market value was $1.94B, and
the top ten producers’ share of the market is shown in Figure 2.48.
Portugal’s .013% share represented $248K in value. Some notable
changes in the US imported plastic pipes market from 2013 to 2014
were that the Czech Republic and Italy outcompeted France and
Switzerland, respectively, for their top place in the rankings. Across
the board, there were minor changes in market value and shares
– some positive and some negative – including for Portugal, which
experienced a small value and share loss.
The 2012 US import market value reached $1.63B. Figure 2.49 outlines
the top plastic pipes producers’ share of this market when Portugal’s
market share was .0094% ($153K). From 2012 to 2013, the market
increased 19%, which seems to have been evenly distributed across
most of the top producers with at least a 1% market share gain. China
overtook Canada as the top producer, a position it has maintained;
South Korea outcompeted its closest European competitors but was
unable to close the gap with Other Asia, and France lost its place
in the top ten to the Czech Republic. Portugal increased its market
share 38%; however, because imports were still below significant

• 53
levels (less than 0.0%), the financial impact was only $95K. In 2011,
the US imported plastic pipes market was worth $1.39B. Figure
2.50 shows the top producers’ US market share; Portugal’s share
was .0027% and value was $38K. Some notable changes were a
17% market value increase, Mexico outcompeting Germany, UK
outcompeting Asia – the latter trend has not been reversed since
2012 – and Italy outcompeting its European counterparts. In this year,
Portugal more than quadrupled its market value – a strong showing
import volume remains insignificant.
The US imported plastic pipes market is large considering the

simple manufacturing and low weight of the product category,
and Portugal has done well to steadily increase its exports. The
US import market has grown at an average annual rate of 13%,
and Portugal has increased its US imports at an average rate of
54% annually. Once Portuguese imports to plastic pipes should
consider four findings to develop a sustainable export strategy. The
first is that US market export development does not need to occur
relative to competitors, as was recommended with New Zealand,
Singapore, and Brazil with light fixtures.
SMEs interested in developing or enhancing plastic pipes exports

can improve their market share by simply focusing on building
relationships with American producers and distributors. One
industry specialist for a large general contractor suggested that
about 95% of materials purchasing is specified by subcontractors
on US building projects.17 “Most of the time it’s basically on us to
figure out what to use, and we consult feedback off the job site.”18
Therefore, SMEs should aim to develop relationships with general
contractors, as well as importers and distributors, and Section 5.4
provides resources for SMEs looking to make US connections to
increase their product visibility and use.19 Another consideration is
that market dominance by large Portuguese competitors is unlikely.
This assessment found that Portugal exports plastic pipes widely

outside of the US, and large companies may be prominent
globally or within Europe; however, in the US, this is not the case.
Additionally, increasing market share and value in this product
category is further likely for SMEs because the US import market
is mostly dominated by developed, high-income countries. This
indicates that workers’ wages are not a factor that greatly influences
competition, which signals two further findings. First, Portugal
has lower average labor costs to that of its neighbors in the UK or
Switzerland, and this could be used to establish a small edge over
competitors. Second, SMEs can be even more competitive because
staffing numbers and staff overhead costs are lower.
The third and related feature to consider is that Portugal is not

currently exporting plastic pipes significantly to the US, and beyond
the absence of large companies, this indicates another advantage
17 See Interview 11, Appendix 4; Interview 7 also confirms that contractors make the majority
of purchasing decisions for US building projects.

for SMEs. Portugal’s 2014 global plastic pipes exports were over 660
times what it exported to the US in the same year; it also exported
eight times more plastic pipes to Mexico than the US, and the US
imported plastic pipes market was 35% larger than Mexico’s in 2014.
There is great opportunity for SMEs to develop plastic pipes exports
for the US market, and SMEs must aim to develop relationships
with US suppliers.
One way the report suggests SMEs should approach developing

and maintaining relationships with the US suppliers with the long-
term goal of becoming their producer is by understanding how they
are competitive, linked to the fourth point below. Once SMEs know
how they can compete with Czech, Italian, or Hungarian producers,
they should get to know US suppliers by asking about any issues
suppliers confront with these producers. For example, Italian
producers may make frequent invoicing mistakes; Czech shipping
may be longer and less predictable, or Hungarian producers may
send too much or too little product. In developing US relationships,
SMEs must be able to sell how they would address US suppliers’
challenges with existing producers to be competitive.
Fourth, finally, and related to the above, Portuguese plastic pipes

producers would be well served to focus on increasing their
global competitiveness among their European competitors,
especially the Czech Republic, Italy, and Hungary. Outcompeting
these competitors in other foreign markets – such as those
in Germany, Mexico, China, and Canada – is likely to impact
Portuguese competitiveness in the US market. Several US
importers, distributors, and retailers indicated that global market
competitiveness and export volume is an influencing factor when
evaluating potential new suppliers.
Moving to other plastic sheeting, out of almost 1220 products, they

are the 422nd most complex and 147th most traded product (OEC
2014). This product category includes sheets, film, and foil, often
used in and for the construction of certain types of aircraft. The 2014
US import market value for other plastic sheeting was $4.83B. Figure
2.51 shows the US market share for other plastic sheeting, and of the
almost $5B total import market, Figure 2.52 highlights the top ten’s
market value, compared to Portugal’s share (.14%).

• 55
Figure 2.51 – Top Ten US Other Plastic Sheeting Producers (2014)
◼ Canada
◼ China
◼ Germany
◼ Mexico
◼ Japan
◼ South Korea
◼ Ireland
◼ UK
◼ Other Asia
◼ Colombia
◼ Portugal
Figure 2.52 – US Other Plastic Sheeting Imports Market Value

◼ Canada
◼ China
◼ Germany
◼ Mexico
◼ Japan
◼ South Korea
◼ Ireland
◼ UK
◼ Other Asia
◼ Colombia
◼ Portugal
In 2013, the US other plastic sheeting import market totaled

$2.07B, and Figure 2.53 shows the top producers’ market share.
Portugal occupied.1% of the market, valued at $2.99M. Some
notable changes were that the market more than doubled, and
this market influx was not merely concentrated at the top. The top
two producers, Canada and China, grew their market value by 6%
and Germany’s grew by almost 8%, but effects were distributed
throughout other producers. There were some rank changes
(Mexico, Japan, Ireland, Colombia and the Dominican Republic),
and Portugal increased its market share slightly, which resulted in
an increase of almost $1M.
The 2012 US import market value was $1.94B; see Figure 2.54 for the
top ten other plastic sheeting producers’ market share. Portugal’s
market share was .1% and value was $1.84M. From 2012 to 2013,
there was an almost 7% market value increase, Canada’s market
share decreased, China’s increased, both Ireland and Mexico
outcompeted South Korea, and Other Asia outcompeted the
Dominican Republic. Portugal continued to enhance its market
value by 14% or a quarter of a million dollars. In 2011, the imported

other plastic sheeting market value was $1.83B. Figure 2.55 outlines
the top producers’ market share. Portugal earned $673K through a
.04% market share. The total market value increased 6%, and there
were several competition changes. Japan outcompeted South
Korea, and India lost its place to the Dominican Republic, which
outcompeted Other Asia in addition to gaining a top ten position.
This year saw tripled market gains for Portugal.
Other plastic sheeting is an interesting market for Portuguese SMEs.

While Canada and China are the two largest US producers, their
combined share does not constitute 50% of the market; no single
or combined producer dominates this market, which is unusual.
Additionally, the countries that are in the top ten exporters are
industrial, high–income countries; as with plastic pipes, Portuguese
SMEs may have a competitive advantage in this product category
due to competitive labor and lower overhead costs.
More importantly, the US other plastic sheeting import market not

only demonstrates growth but consistent high level of growth, 49%
on average over three years. Growth was steady until 2013, when the
market doubled within one year, but there could be a rebalancing
of this market increase; since 2014, there has only been a 1.8%
decline in other plastic sheeting (Comtrade 2016). Like previous
recommendations this report has made, when markets experience
sudden, large-scale growth, the international and US markets
usually recover and level off; trade data from 2016 will give a clearer
indication of whether the market will return to pre-2011 levels or
stabilize around $1.87B. Research suggests that “peak decline” in
this product category occurred in January 2016, and once recovered,
it would not be atypical to expect market value to continue to grow
by 4-7% from 2017 to 2018 (Datamyne 2016).
The top ten producers in the US imported other plastic sheeting

market do not tend to change frequently, but they do change,
suggesting there is room for enhanced competition. Portugal is on
a progressive track to improve its competitiveness in this product
category with an impressive 45% growth over four years. Like several
other product categories assessed in this report, Portugal need not
aim to be a top ten competitor to grow in other plastic sheeting. A
slight market share increase from 2013 to 2014 resulted in almost
$1M of growth. Competition analysis for other plastic sheeting
suggests that Saudi Arabia, Australia, Turkey, and Hungary are
Portugal’s most consistent competitors (from 2011 to 2014) in this
product category. Considering various comparative and competitive
advantages – such as proximity to US ports, infrastructure, labor
costs, etc – it appears that Hungary is the most appropriate
competitor for Portuguese SMEs to target when developing a
sustainable export strategy for the US market.

• 57
Assessment of Portuguese PVC Products Competition
in the US Market
Assessing both product categories – plastic pipes and other plastic
sheeting – there are several commonalities, such as high demand,
lucrative US market, and slow but steady growth in Portuguese
exports. In both product markets, Portugal has not yet reached a
significant level (0.0% and above) of US imports but is on track do
to so within a couple years. Once significant US import are attained,
concerns over market access should be replaced with concerns for
longer-term, sustainable SME sustainable export strategies. With
both product categories, Portugal need not aim to be a top ten
US producer in order to achieve significant market gains. Currently
between the low 30s to high 40s in the competition rank, the report
recommends developing a sequence of short-term strategies that
can be incorporated into a longer-term plan that targets a position
in the top 25 competitive US producers in this subsector.
A sequence of short-term plans will allow SMEs in the industry

to revise strategies as successes and challenges become more
apparent. Because the longer-term plan is likely to span over
five years, it is important that SMEs support each other, ensuring
continuity in export volume and strategy development. Finally, both
markets hold opportunities for SMEs to utilize various competitive
advantages, and Portugal also has geographic and economic
advantages that will be further discussed in Section 6.2b. The
analysis has highlighted countries Portugal should leverage these
competitive advantages against in forging new relationships with
US importers, suppliers, distributors, and retailers by exploring with
them issues with current producers and how SMEs can address
these issues. The final point in summarizing internal competition
in this subsector is to reinforce a slight degree of market instability
with other plastic sheeting in the US. Market indicators suggest
that the US PVC market will fully recover to its pre-2008 level within
the next couple years (approximately by 2018). One way for SMEs to
continue developing exports in the PVC subsector while ensuring
the security of their investment would be to enhance exports with
existing trading partners as well.
2.3e Metalware Subsector Product Categories

The subsector category of metalware products features another
large range of products, including and iron pipe fittings, iron pipes,
and iron stovetops, cookers, and BBQs – the latter two of which
are assessed here. This report assesses these products because
the market is somewhat more dynamic compared to previous
subsectors, and the markets for iron pipes differs considerably from
iron stovetops. The subsector market is more dynamic because of
long-standing disputes over iron / steel, the primary material from
which these products originate, and the markets for iron pipes and
iron stovetops differ considerably because iron pipes have more
varied applications and uses; whereas, iron stovetops are more
limited (and traded less).
Because there is a close supply relationship between iron pipes and

iron pipe fittings, only one of these products is assessed – the one
with the higher price point where the market is more diverse and

Portugal’s top competitors are more prominent. What further binds
these two products – and enables the report to examine them
collectively – is that US imports in both product categories have
declined rapidly and have yet to recover, discussed further in the
assessment below.
Beginning with iron pipes, out of almost 1220 global products, they
are the 235th most complex and 91st most traded product (OEC
2014). This product category includes pipes, blanks, steel, oil, gas,
pipelines, and circular cross-sections. The total US import market
value for iron pipes in 2014 was $5.75B. Figure 2.56 shows the US
market share for iron pipes in 2014. Of the almost $6B total import
market value, Figure 2.57 shows each of the top ten 2014 iron pipes
producers’ market value, which does not include Portugal’s share as
export figures for 2014 were below 0.01% or $73K.
Figure 2.56 – Top Ten US Iron Pipes Producers (2014)
◼ Mexico
◼ Japan
◼ Germany
◼ Canada
◼ China
◼ Austria
◼ Argentina
◼ Italy
◼ Czech Republic
◼ Russia
Figure 2.57 – US Iron Pipes Imports Market Value (Millions)

By Country (2014)
◼ Mexico
◼ Japan
◼ Germany
◼ Canada
◼ China
◼ Austria
◼ Argentina
◼ Italy
◼ Czech Republic
◼ Russia

• 59
In 2013, the total US iron pipes import market value was $4.93B.
Figure 2.58 shows the top ten producers’ US market share of this
market value. Portugal’s market share was .01% and value was $27K.
Some notable changes in the iron pipes market from 2013 to 2014
were that the total market value increased 16% and competition
varied greatly: Japan outcompeted Germany for top producer
status, Mexico outcompeted Canada, Argentina outcompeted
China and Italy, and Czech Republic replaced Russia in the top ten.
This year Portugal was one of the smallest European exporters of
this product category.
In 2012, the total US import market value was $6.12B. Figure 2.59
shows the top ten iron pipes producers’ US market share of this
market value. Portugal’s market share was 0.01% and value was
$16K. Some notable changes in the iron pipes market from 2012
to 2013 were that the total market value declined by 19%, which
affected market shares, but Portugal still able to increase its market
value 69%. There was some variation among top producers, with
Japan maintaining the top producer position.
In 2011, the total US imported iron pipes market value was $5.13B.
Figure 2.60 shows the top ten producers’ US market share of this
market value. Portugal’s market share was not above 0.00% or $1K
for 2011. Some notable changes in this product market from 2011
to 2012 were that the market value increased by $1B (19%) and
Austria, Canada, Italy, Czech Republic, and Russia improved their
competitiveness.
Two things are immediately clear about the US market for iron
pipes from this assessment. First, the market has not demonstrated
stability lately. With the 19% decline in 2013, the steady growth rate
of previous years, and the 2014 16% rebound, the market has an
average growth rate of 5% annually. This is positive news, but the
market took a large hit between 2012 and 2013, and the US import
market continues to experience decline since 2014 (Datamyne
2016). There are two factors at work within the US imported iron
pipes market that likely impact this decline and continued lack of
recovery; the first is that iron pipes are a commodity-based product
category, subject to fluctuations in commodity prices, and the
second is that oversupply of iron product categories has continued
to drive down import markets’ value.
One iron pipes wholesaler said the current US market is: “very
complicated. A lot of people get kickbacks, rebates; they can literally
sell it at a loss on the front end and get a rebate on the back end.
It costs practically nothing right now. They move mass amounts of
this stuff, and a lot of people can’t compete because they’ve got
truckload of this stuff.”20 Two industry experts interviewed confirmed
that the US construction materials market requires large volumes,
truckloads, to be competitive in price, which may pose difficult for
SMEs. One alternative may be to collaborate on filling big orders.
The second thing that is immediately apparent about this product
category is that competition varies considerably; with a targeted

export strategy, gaining a position in the top ten is an achievable
goal for many European countries. Portugal’s ability to achieve this
goal, however, is uncertain.
In both 2011 and 2014, Portugal’s US imports of iron pipes were

negligible. In the years in between, Portuguese imports remained
insignificant, on average $29K. Therefore, there is a plethora of
good news for Portuguese SMEs exporting iron pipes, particularly
because the market is not dominated by large Portuguese iron /
steel companies. In 2014, Portugal exported $22.9M worth of iron
pipes to its trading partners, including the US. The Harmonized
Tariff System (HS) indicates that there are no tariffs for this product
category in the US and that preferential trading relationships do
not affect US imports of iron pipes. The report recommends that
Portugal work to enhance its presence and brand awareness with
US importers, distributors, and retailers. One retailer interviewed
suggested: “What [Portuguese SMEs] need to do is set up with a
master distributor in the US, instead of going through a wholesaler.
Someone who distributes on a large scale in the US, like Kelly Pipe
or Merfish, who buy container loads and distribute it to retailers.”21 If
Portugal exported iron pipes to the US at the same level as its Polish
or Italian trading partners, it would be competitive with Finland or
Algeria in the US market; if it exported at the same level as it does
with France, it would be competitive with Singapore or Chile in the
US market (OEC 2014). A key issue for SMEs in expanding export
development in this product area will likely be funding, which the
report covers in Sections 3, 4, 5, and 6.
Finally, the last product, iron stovetops, are the 512th most complex
and 313th most traded product OEC 2014). This product category
includes barbecues, domestic, cooking apparatus, plate warmers,
and heating products. The total US import market value for iron
stovetops in 2014 was $2.51B. Figure 2.61 shows the US market share
for iron stovetops in 2014. Of the $2.51B total import market value,
Figure 2.62 shows each of the top ten 2014 iron stovetops producers’
market value, which does not include Portugal’s share as export
figures for 2014 were below 0.0%, just under $64K.
Figure 2.61 – Top Ten US Iron Stovetops Producers (2014)
◼ China
◼ Mexico
◼ Canada
◼ Thailand
◼ Other Asia
◼ Italy
◼ South Korea
◼ India
◼ Norway
◼ Japan

• 61
Figure 2.62 – US Iron Stovetops Imports Market Value (Millions)
By Country (2014)
◼ China
◼ Mexico
◼ Canada
◼ Thailand
◼ Other Asia
◼ Italy
◼ South Korea
◼ India
◼ Norway
◼ Japan
In 2013, the total US iron stovetops import market value was $2.46B.
Figure 2.63 shows the top producers’ US market share of this market
value. Portugal’s market share was .0045% and value was $111K.
Some notable changes in the iron stovetops market from 2013 to
2014 include that China lost 3% market share, which seemed to be
distributed between Thailand, which almost doubled its market
share and outcompeted Other Asia, and the rest of the lower top
ten. However, Portugal did not appear to benefit from China’s loss,
as its market share and value was decreased by nearly half.
In 2012, the total US import market value was $2.22B. Figure 2.64
shows the top ten iron stovetops producers’ US market share of
this market value. Portugal’s market share was .0049% and value
was $108K. Some notable changes in the iron stovetops market
from 2012 to 2013 were that the total market increased by almost
a quarter of a billion, and there were some losses and gains in this
product category but no significant change other than Norway
outcompeting India.
In 2011, the total US imported iron stovetops market value was

$2.18B. Figure 2.65 shows the top ten producers’ US market share of
this market value. Portugal’s market share was 0.0% and value was
$20K. Some notable changes from 2011 to 2012 were that China lost
4% of its market share, which appears to have been redistributed
to Mexico – with a 3% share increase – and slightly among other
top competitors, Japan increased its competitiveness, and India
and Norway continued their bi-lateral competition. Portugal’s
contribution to this market in 2011 was not significant, less than
$21K, but from 2011 to 2012 exports increased by 414%.
The major obstacle to competition in the US iron stovetops

market is China’s dominance. The encouraging aspect of China’s
dominance in this product category is that it is declining, from
almost 70% in 2011 to 63% in 2015. While preferential trade
agreements appear to play a role in this product category, top ten
competitors are able leverage their less than 1% market shares to
increase GDP by the millions. However, growth in this market is
slow, and more recent figures suggest that this US import market is
in decline, as US exports grow at a very slow pace (Datamyne 2016).

In 2011, Portuguese imports were considerably low – ranked 56th out
of 70 US iron stovetops producers; in 2012, there was considerable
growth for Portugal, which resulted in a $87K market value increase.
This level of competition, however, remained insignificant for
this market, and unfortunately, there has not been considerable
improvement in Portuguese imports for this product category in
the US market. In 2014, Portugal’s iron stovetops export growth
accumulated from 2011 to 2013 was reduced by almost half. The
US market reflects positive growth and opportunities for Portugal
in almost all product categories, but the construction materials
market continues to be highly restrictive to countries without
bilateral investment treaties (BITs) and / or free trade agreements
(FTAs) with the US. One element that appears to be affecting
declining Portuguese construction materials’ competitiveness is
short-term product availability.
Basically whatever you put on the job site, they use. …our main
focus is customer service and pricing; if you win us over in pricing,
we have to make sure your customer service is top notch. We
need things at the drop of the dime. On site, everything could be
doing well, and 4 seconds later a pipe could burst. Everything is in
chaos then. That’s where customer service comes into play.22
In 2014, globally, Portugal was the 34th of 165 exporters of iron

stovetops, and of these 165 exporters, 52 exported in amounts that
were significant (0.1% of global market or above). If reassessed
considering countries that export iron stovetops at a significant
level, Portugal would fall in the bottom 35% of all global iron
stovetops exporters. Therefore, the report suggests that SMEs in the
industry discuss whether exporting this product category to the
US is a sustainable strategy, given Chinese dominance in the US
market, export costs, and investment in the industry. The majority
of Portugal’s iron stovetops export market ($36.2M for 2014) is
concentrated among Spain (56% for 2014), Angola (11% for 2014),
Belgium-Luxembourg (6% for 2014), and Saudi Arabia (4.3% for 2014),
Cape Verde (3.2% in 2014), and Europe in general (OEC 2014). It may
be a more sustainable strategy for Portuguese SMEs to work towards
export development of iron stovetops in other foreign markets where
competition from China is less prominent and where preferential
trading relationships play less of a role in determining competition.
Perhaps once iron stovetops exports have grown in other foreign
markets, perhaps at that time it would be more appropriate for
Portuguese SMEs to revise a sustainable export strategy for the US
market, particularly focusing on value added and superior quality
products with Portuguese name recognition.
Assessment of Portuguese Metalware Products Competition

in the US Market
Looking at the metalware products assessed here – and considering
iron pipe fittings, where data was gathered and analyzed but not
presented here – the results are mixed for Portugal. For all these
product categories, US imports are below a significant level (0.0%

• 63
and below). For iron pipes, there is consistent growth for Portuguese
exports to the US, but the US market is not steady or stable for
imports in this product category. For iron pipe fittings, analyzed by
not presented here, Portuguese exports to the US reflect similar
market inconsistencies, from $117K in 2011, $186K in 2012, almost $8K
in 2013, and $130K in 2014. Consistency is key to competitiveness
in the US market, and like iron stovetops, Portuguese metalware
imports, across these products, lack import volume.
To a degree, import volume below significant levels (0.0%) can be

improved with effective, targeted, and sustainable export development
strategies. However, the combination of inconsistency and low import
volume make the development of a sustainable export strategy for the
US market much more complex, requiring an intense examination by
both Portuguese and American industry specialists.
This report recommends that US and international metal

commodity markets and disputes be carefully monitored over
the next years. With the US, Europe, and Japan currently meeting
to discuss the widespread effect of global iron / steel products
oversupply, the US metalware market is highly competitive. SMEs
can develop competitive advantages in stable, consistent supply
chains among other factors, such as customer service, short-term
product availability, and flexibility on export volume with diverse
products. In interviews with US construction materials companies,
the report gathers that when producers experience a considerable
decline in export volume, such as Portugal’s 2014 iron stovetops US
exports that were half the value of previous years – this damages
trust and positive relations with US companies. As availability
and reliability are key in forging new supply relationships in the
US construction materials industry, SMEs must adapt to navigate
volatile, macro-level commodity market forces that shape market
access for countries like Portugal.
2.4 Conclusion
The analysis of US import competition has yielded important

findings, and in many ways, this is the core of the report: helping
Portuguese SMEs understand their competition and providing
recommendations for enhancing export development strategy in
the selected product categories. This section will summarize the
findings and reflect on the top US construction materials producers
and Portugal’s most similar US market competitors.
The report finds slow but steady growth across the majority of
product categories with highly lucrative possibilities for Portuguese
export development due to product weight and shipping and labor
factors within these subsectors, which are mostly frequently traded
and less complex. Prospects for Portuguese export development
look particularly strong in hardware (padlocks and other metal
fasteners), building ceramics (glazed and unglazed), electrical
(LVPE and light fixtures), and PVC (plastic pipes and other plastic
sheeting) products. Portugal has done increasingly well in glazed
ceramics and electrical products, both highly lucrative markets.

The market for metalware products is notably unsteady and stands
out as a volatile and restrictive subsector for export development
due to US and international iron / steel disputes. Narrowing down
further, the product categories of other metal fasteners, ceramic
roofing tiles, and, to a degree, other plastic sheeting and unglazed
ceramics, appear present fewer short-term opportunities for
SMEs – although unglazed ceramics was recommended for export
development. This report finds Portugal performed poorly in PVC
and metalware products.
Some of the strategy recommendations include:
»» Development of holistic, industry-wide, long-term, sustainable

collaboration
»» Focusing on small improvements to US market share by
outcompeting targeted competitors (more below)
»» Monitoring US and Italian markets in the next two to three
years in this subsector, specifically, and in building ceramics and
metalware, in particularly, while developing:
–– Enhanced export strategies with existing foreign trading

partners
–– Relationships with US industry experts, importers, distributors,
(sub)contractors, and retailers
–– Strong selling points for Portuguese construction materials
»» Revising short-term (1-3 year) export strategies within a larger

(3-5 year) sustainable plan with coordinated support and
communication between SMEs, taking into account diverse
business life cycles, as factors that contribute to success become
more apparent and challenges change
»» Understanding that consistent growth and market presence are
key to enhancing exports in the US market and that reliability is
fundamental within this subsector’s US supply market.
With respect to competition, the report has found FTAs, BITs,

geography, (commodity) market volatility, customer service, and
existing supply relationships to be key. Competition at the top,
particularly the top five, does not vary greatly across years and
product categories. Across most years and product categories
the top US producers were: China, Mexico, Germany, Japan,
Italy, Canada, and Other Asia. Portugal can focus on improving
competitiveness across product categories through US market
access and consistent export volume strategy development.
Generally, the producers that Portuguese SMEs should target to
best understand their competitive advantage in the US construction
materials market are San Marino, Romania, Estonia, Czech Republic,
Italy, Denmark, and Hungary within Europe and Nicaragua, Trinidad
and Tobago, and Australia outside of Europe. Within particular
product categories, the key countries to outcompete are:
»» For padlocks: Sweden

• 65
»» For metal mountings: Ireland, Iceland, Italy, Lithuania, Latvia,
Macedonia, Malta, Netherlands, Norway, and Poland
»» For other metal fasteners: Switzerland, Israel, and Romania
»» For glazed ceramics: Colombia, Japan, Canada, and San Marino
»» For unglazed ceramics: Canada
»» For roofing tiles: Turkey
»» For light fixtures: New Zealand, Brazil, and Singapore
»» For other plastic sheeting: Saudi Arabia, Australia, Turkey, and
Hungary.
Having analyzed the internal US import market competition, the

report now focuses closely on the subject of the above paragraph:
external competition, globally and within Europe, that will aid
Portuguese SMEs in developing sustainable strategies for export
development and growth in the construction materials sector.
The section is organized similarly, with an introduction, analysis
of the top global and European competitors, and examination of
Portugal’s top sector exports.

Section 3:
External Sector
Competition
3.1 Introduction
The US market is the largest single-country import destination

for global goods and services and highly competitive. For the
Portuguese SMEs to develop long-term, sustainable export
development and growth strategies, a full picture of market
competition is essential. Competition and demand are two
cornerstones of export strategy, which makes knowledge of
external competition fundamental. For example, global iron / steel
competition has been the focus of countless legal and political
action for the last decade, if not more. The US recently imposed
tariffs of over 500% on Chinese steel imports due to “dumping”
allegations and has encouraged British and European import
markets to follow suit (Kollewe 2016). Dumping refers to: “the
practice of trying to sell products in the United States at lower
prices than those same products would bring in the producer’s
home market” due to subsidies or artificially deflated prices
(CBP 2006). This section aims to enhance Portuguese SMEs’
understanding of how competitive the US market is through a
snapshot of external market competition for subsector products.
Portuguese SMEs face exorbitant competition in the construction

sector globally but the analyses from Section 2 revealed that
Portugal’s top competitors in the US market were often European.
Further, Section 1 highlighted that Portugal’s competitiveness
is fiercest among its European counterparts. Countries with
considerably less export experience and smaller GDPs are
outcompeting Portugal in the US and global market. The objective
of the report is to help Portuguese SMEs develop sustainable export
strategies by recovering pre-2008 export volume in the construction
materials sector, which has yet to catch up with export volume from
other sectors.
This section discusses who competes in the global construction

industry for access and dominance of the US market. A frequency
analysis identifies Portugal’s most significant global and European
competitors. A close-up of this distribution is examined by looking
at one product category within each subsector covered in the
report, first globally and then within Europe. The product categories
examined in this section were selected based on Portuguese
and US market features, such as import / export volume and
competitiveness following the analysis from Section 2.
The report has isolated Portugal’s European competitors so that an

in-depth analysis of its most consistent and fiercest competitors
can be conducted. The World Economic Forum’s Competitiveness
Index (Section 1.2) and Section 2.3 revealed that Portugal’s best

• 67
opportunities to improve competitiveness are through US market
access and growth, relative to its European competitors, such as the
Czech Republic, Spain, Italy, Hungary, Romania, Estonia, Greece, etc.
Additionally, the Next Challenge USA and Compete 2020 projects
measure competitiveness primarily at the European level. However,
Section 2.3 also demonstrated that SMEs must understand their
competitive advantages with respect to the US’ trading partners in
Latin America and Southeast Asia, making it essential to evaluate
Portugal’s global construction materials competition. How can
Portugal compete with both global competitors that have FTAs or
BITs, lower production costs, established relationships, and more
immediate product availability with US suppliers and its European
competitors – some of which are currently outpacing Portugal in
the US market? By isolating global and European competitors, this
is what Section 3 aims to address. Analyzing the global market
provides findings that are both complimentary and distinct
from those within Europe, and analyzing the European market
compliments and contrasts findings about the global market.
3.2 Top Sector Competitors
This section analyzes the largest global and European construction

materials exporters. This section speaks to the general state of
global construction materials competition and isolates Portugal’s
European competitors to give Portuguese SMEs a better idea
of how to improve competitiveness globally and within the
common market. Global competitors are analyzed first and then
European competitors follow; to accommodate for this division,
2014 global market values are given for all competitors. This allows
for comparison across exporting countries. Through a frequency
analysis, these seven countries represent the strongest construction
materials competitors on the global market from 2011 to 2014, with
all European competitors removed:
1. China ($39.14B)
2. US ($6.92B)
3. Japan ($5.4B)
4. Mexico ($4.54B)
5. South Korea ($2B)
6. Turkey ($1.91B)
7. Canada ($1.5B).
Portugal’s total global exports were $512.4M.
It is of little surprise that China or the US, the world’s first and
second-largest economies, are at the top; what is striking is the gap
between the US and China’s total export values. After China, the
top five global construction materials export markets, combined,
are less than half of China’s global exports in these subsectors,
which gives a strong indication of China’s dominance. However,
commodity prices have recently fallen globally, and Chinese
construction materials exporters face increasing tariff barriers in
US and European market. There is also indication that the Chinese

construction materials manufacturing is beginning to level off or
even decline (Serapio 2016; Kollewe 2016; Yan and Roantree 2016).
Canada and Mexico’s special relationship with the US, the world’s
largest economy for decades, is a contributing factor in their success
in global markets. High US demand due to availability and transport
costs has led to brand and quality recognition globally. Portugal’s
global exports in these subsectors equates to about 34% of Canada’s
or 1.3% of China’s exports, but competition among Portugal’s
European competitors paints a much more optimistic picture.
Shifting to the largest European global construction materials

exporters, the report finds that across these five product categories
from 2011 to 2014 the top competitors were:
1. Germany ($10.73B)
2. Italy ($8.36B)
3. Spain ($5.25B)
4. France ($3.35B)
5. Austria ($2.4B)
6. UK ($2.18B).
If European competitors were to be integrated into the global

competitors rank, a different picture emerges.
1. China ($39.14B)
2. Germany ($10.73B)
3. Italy ($8.36B)
4. US ($6.92B)
5. Japan ($5.4B)
6. Spain ($5.25B)
7. Mexico ($4.54B)
8. France ($3.35B)
9. Austria ($2.4B)
10. UK ($2.18B)
11. South Korea ($2B)
12. Turkey ($1.91B)
13. Canada ($1.5B).

• 69
It is interesting that within the global market for construction
materials exports the US is not the second largest exporter. Germany
and Italy export these products at significantly higher volumes
than the US, which may indicate that US construction materials
manufacturing is less competitive when compared to European
imports. Recalling that Portugal’s global exports of these products
amounts to $512M, Portugal’s global export volume is about 10% of
its neighbor, Spain’s. Portugal was a top global exporter (with Europe
isolated) in glazed ceramics across all four years. There were two
other European countries with the same frequency:
»» The Czech Republic ($1.94B)

»» Poland ($1.79B).
What is concerning is that Portugal’s global exports in these product

categories equates to $512M or about 27% of their European
competitors’ average export volume. These inconsistencies should
be further examined by looking internally at various factors such as
commodity fluctuations, product price, or export volume. Regarding
export volume – something also discussed in Section 2.3b, roofing
tiles and Section 2.3e, metalware – the report emphasizes the extent
that consistency affects competitiveness. Poland and the Czech
Republic’s almost $2B export volume can be attributed to their
ability to hold the top exporter rank across four years. Whereas,
Portugal was 4th in 2011, 3rd in 2012, 4th in 2013, and 5th in 2014.
Next, the section examines top global and European exporters
performance in specific product categories to better understand
the interacting processes and events that shape external export
competition, known as a dialectical process.
3.3 Global Competitors
Detailing the top five global competitors in a product category

within each subsector provides insight about market dynamics
that influence external export competition, which, in turn, shapes
internal US competition. The US is often a top exporter within
these subsectors on the global market. This is referred to as a
dialectical, where several concurrent processes or events influence
outcomes that produce differing effects for competitors. For
example, the on-going steel dispute between a handful of countries
affects commodity prices, trade policy, import / export quotas,
and countries’ trade surpluses / deficits for all exporters. The US’
trade deficit with China is also an influencing factor that shapes
global interactions that influence competition. Without trying to
be unnecessarily complex, the report argues that is essential that
SMEs understand the complex formulas that shape US, global, and
European competition.
3.3a Hardware: Other Metal Fasteners

Before this analysis begins, it is important to reiterate that European
competitors are analyzed separately under Section 3.4. Beginning
with the hardware subsector product category of other metal
fasteners, in 2014, the global market was valued at $2.97B. The top

five exporters were China (market share: 27%, market value: $813M),
Other Asia (market share: 5.7%, market value: $170M), Hong Kong
(market share: 5.3%, market value: $157M), the US (market share:
5.3%, market value: $157M), and South Korea (market share: 4.7%,
market value: $140M). China holds almost a third of the global other
metal fasteners market; the largest market share is in Asia with 48%
of the global market, compared to the US’ 5%.
Section 2.3 provided that China’s US other metal fasteners US

imports were $59.6M for 2014, and Other Asia imported $19.6M to
the US. The third largest US producer of other metal fasteners for
this year was the UK, which earned a $10.8M market value. These
numbers begin to have more meaning for SMES in consideration
of the dialectical factors that influence competition in the US and
global market. Globally, Portugal holds a .49% market share for
other metal fasteners in 2014, a $14.5M market value. The share
is significant (greater than 0.0%), and the value is a considerable
contribution to Portuguese GDP, $230.1B in 2014 (World Bank 2016).
While it is unlikely that Portugal will become a top US other metal
fasteners producer in consideration of Asia’s (China and Other
Asia) dominance, Portugal can leverage its global export volume to
enhance its US import opportunities.
Looking at other years, global competition almost does not vary

among the top five. Global market value has steadily risen by almost
2%; on a global scale, this is entirely positive, steady, and shows few
signs of risk. It is important to note that over the years, Chinese,
Hong Kong Chinese, and Other Asian global exports increased
steadily, a natural continuation of Asia’s market dominance within
this product category.
3.3b Building Ceramics: Glazed Ceramics

In 2014, the global market value for glazed ceramics was $13.5B
– almost five times the size of the global other metal fasteners
market. The top five global exporters of this product were China
(market share: 27%, market value: $3.67B), Turkey (market share:
4.1%, market value: $547M), the UAE (market share: 2.8%, market
value: $379M), Mexico (market share: 2.7%, market value: $357M),
and India (market share: 2.4%, market value: $327M). In this product
category, Europe holds the largest share of the global market (49%),
but China holds the largest single country share. Iran, Egypt, and
Brazil are also top global exporters in this product category (2013-
2011), and the market shows steady 4% growth, although growth
may be slowing.
In the US import market, Chinese glazed ceramics imports ($290M)

are second to Italian ($350M), and Mexican glazed ceramics
products are imported at a slightly smaller volume than Chinese
($281M). Again, this reinforces the importance of a dialectical
understanding of market competition. This analysis shows that
there are clear market preferences for glazed ceramics products
and that preferential trade agreements and geography appear less
influential competition factors in this product category. Portugal
held 1.6% of the global glazed ceramics market in 2014; the product
category is more lucrative compared to other metal fasteners, and

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Portugal is competing better in this product category. Contribution
to GDP ($216M) is significant, considering that this is one product
category out of 21 Portuguese export sectors.
This sector (stone and glass) is the tenth largest for Portugal, which also
makes it nearly the median – the midway point – of all of Portuguese
export sectors. Machines are the most exported sector, and arts and
antiques are the least exported. Because glazed ceramics are near
the median, there is an almost equal statistical chance of increasing
or decreasing in export value and volume. By exporting or enhancing
exports to the US, SMEs in the ceramics subsector can play a key role
in Portugal’s economic future. Egypt’s global export share is declining,
which could present opportunity for Portuguese SMEs ready to supply
the global market. However, Portugal’s share of the global market is
also declining, from 2.1% market share and $245M market value in 2011
to 1.6% market share and $216M market value in 2014. Recall that this
export sector was the median – equally likely to increase or decrease
– and again, numbers and statistical analyses begin to have more
practical implication.
3.3c Electrical: Light Fixtures

In 2014, the global market for light fixtures was $46.4B – more than
three times the size of the glazed ceramics and the largest so far.
The top five global exporters of this product were China (market
share: 55%, market value: $25.4B), Mexico (market share: 4.4%,
market value: $2.05B), the US (market share: 3.6%, market value:
$1.68B), South Korea (market share: 1.9%, market value: $859M), and
Canada (market share: 1.1%, market value: $513M). Asia holds the
majority of the global market (63%). Through the years, these trends,
shares, and values did not change considerably, except for 2011
when Other Asia was a top exporter.
The global market for light fixtures is growing at a rapid rate (9.1%);
the US market is growing at an average annual rate of 12%. While
Section 2 highlighted reasons to be excited about opportunities for
export development in this product category, the assessment urged
Portuguese SMEs to be “cautiously optimistic”. China’s dominance
is reason for caution alone, but the US market has also shown sharp
spikes in market value accompanied by brief declines (see Figure
2.44). While the global market does not show similar declines, spikes
are evident, reinforcing the recommendation to be cautious in
markets with such high growth.
Portugal held .26% of the global light fixtures market in 2014,

a market value of $123M; global export volume is significant.
The contribution to GDP is particularly interesting because the
subsector of electrical products falls within Portugal’s 4th smallest
export sector (Miscellaneous). Connecting the various data points
that shape this analysis, the report highlights that the product
category is:
»» the most lucrative of the three analyzed to this point,

»» the fastest growing of the three,
»» more dominated by China than any other, and

»» one in which Portuguese exports have been steadily declining,
resulting in an average loss of $6M for each year since 2011.
In Section 2.3c, the report noted that Portuguese exports to the

US were irregular from year to year, and the findings suggested
short and long-term competition target strategies. This section
intentionally examined light fixtures because enhancing Portuguese
light fixtures exports to the US presents a challenge, and here, the
report has further uncovered that challenge within the context of
the global market.
3.3d PVC: Plastic Pipes

In 2014, the global market value for plastic pipes (tubes, pipes,
hoses, and fittings) was $23.9B – about half of the global light
fixtures market, the second largest market so far. The top five global
exporters (save for European nations) of this product were the US
(market share: 12%, market value: $2.84B), China (market share:
9.4%, market value: $2.25B), Turkey (market share: 3.7%, market
value: $882M), Japan (market share: 2.7%, market value: $642M), and
Canada (market share: 1.8%, market value: $431M). In this product
category, Europe holds the majority of the global market (55%).
Portugal’s share of the global market for plastic pipes was .57% – a
value of $136M.
Through 2013 and 2011, these trends, shares, and values do not
change considerably; it is clear that South Korea aim to outcompete
Turkey on a global level, but it has difficulty being consistent. The
market shows slow growth, but from 2011 to 2012, the global market
declined by $200M. Portugal’s share has also declined from .63%
or $135M in 2011 slowly to .57% or $136M. Though the market value
loss is not as apparent as the global share loss, this global market
is growing at an average rate of 3%, and Portugal’s exports are
unable to keep pace. In 2011, Portuguese exports of plastic pipes
were 3.7% of total exports; in 2014, they were 3.1%. This slow decline
contributes to a scenario in which Portugal’s global competitors are
gaining from its market share loss.
The analysis in Section 2.3d found that the US market for plastic
pipes is growing at an average rate of 13%, and Portugal increased
its US imports at an average rate of 54% annually; however, these
imports are still below a significant level (0.0%). The assessment
recommended that Portuguese SMEs focus on building
relationships with American importers and distributors and
maintaining low production / labor costs to develop a sustainable
US competition strategy. One retailer interviewed said that when
developing relationships with new suppliers they are looking for
exporters to have: “a good supply record, where they provide good
service and quality. [They should] probably [be] rated number one
in terms of price. That’s who we work with.”23
While these recommendations remain relevant, the analysis of

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global competition in plastic pipes reveals that this industry is at a
“critical juncture” in its development. Portuguese SMEs exporting in
this product category should conduct an immediate self-evaluation,
asking such questions as:
»» Are there global factors that have contributed to Portugal’s

decline in plastic pipes exports; what are they, and how can SMEs
respond to these challenges?
»» Can exporters decrease their shipping time and improve
availability?
»» Can trade financing for SMEs reverse export decline?
»» Can collaboration with organizations and trade associations,
such as the International Organization for Standardization (ISO)
or European Plastic Pipes and Fittings Association, improve
Portuguese competitiveness?
Without a concentrated and collaborative industry reassessment

and strategy revision, global trends highlight a real possibility of
export decline for Portugal in PVC products.
3.3e Metalware: Iron Pipes

In 2014, the global market for iron pipes reached $35.8B, replacing
plastic pipes as the second largest product market analyzed so
far. As with plastic pipes, Europe holds the largest market share by
a fractional margin over Asia, and excluding Europe, the top five
global exporters of iron pipes are China (market share: 20%, market
value: $7.01B), Japan (market share: 13%, market value: $4.51B),
the US (market share: 6.2%, market value: $2.2B), Mexico (market
share: 4.9%, market value: $1.75B), and South Korea (market share:
1.9%, market value: $693M). Figure 3.1 reflects that this market has
perhaps the most access barriers of all, as discussed in Section 2.3e.
One reason for this may be commodity prices and on-going global
disputes in iron / steel, which have affected many countries. The
trends for this product category and subsector are mostly negative,
globally, within Europe (see Section 3.4e), and in the US.
Figure 3.1 – Global Iron Pipes Export Value (Billions)

Section 2.3e advised Portuguese exporters to monitor international
disputes, tariff rates, and markets over the coming years while
looking to increase exports with their existing top trading partners,
such as Spain, Angola, and the UK, as the iron / steel industry in
the UK continues to decay. This external competition analysis
pulls in dialectical factors that almost contradict this advice
because Portugal’s top trading partners are also its primary export
competitors in this product category. It will be challenging to
increase iron pipes exports with countries that are similarly aiming
to increase their iron pipes exports. Across industrial products,
commodity prices have been in decline for the last five years; all iron
pipes exporters will be feeling the effects of this decline with the
objective of increasing exports across foreign markets. The report
lacks the ability to make a recommendation for Portuguese SMEs
exporting metal products. Portuguese SMEs should consider that:
»» Portuguese performance in this product category has not reached

significance (below 0.0%) in the last five years
»» Metal products are Portugal’s fifth largest export sector
»» Globally and in the US market, iron / steel products are
performing poorly
»» Markets across countries are unstable and, mostly, unprofitable
(see Section 5.4 for further information)
»» Iron pipes, while a sort of “indicator species” within the metal
products sector, are in the bottom third of Portuguese exports,
and though global and US markets continue to decline in this
product category, possibilities for export development and growth
may be more positive in other product categories, such as raw
iron bars (HS code: 7214).
To reiterate what was said of light fixtures, the products chosen for
further analysis under Section 3.3 and 3.4 are selected because they
present a challenge for the report parties and SMEs. The analysis of
external competition of iron pipes did not yield conclusive results;
it did refine the picture of metal subsector exports by focusing on
prospects and challenges, explored further in Section 6.2b. The
analysis of external competitors within Europe refines this picture
further still.
3.4 European Competitors
This section focuses exclusively on Portugal’s European competitors’

performance within the global market. The report further
narrows the competition analysis. Examining Portugal’s European
competitors allows the report to better assess how Portugal can
improve competition within the common market. Again, there
are dialectical factors at work in this assessment that impact
Portugal’s competitiveness within the American market. For
example, Portugal’s post-2008 recovery aid from the EU and IMF
influences its competitiveness, and assistance is ending. Portuguese
businesses will be expected to drive export growth with less input
from Brussels, the IMF, and the Portuguese government, and the

• 75
effect of this process has yet to be determined. While this may
put Portugal at a temporary disadvantage with some European
competitors, such as Italy, France, and the Netherlands, Portugal
continues to have a plethora of advantages over other European
competitors. Greece is still in crisis; Moldova requires enhanced
export infrastructure, and Estonia is comparatively further from
France. Dialectical factors remain in play, but this section provides
intimate detail that further illuminates export development and
growth opportunities for Portuguese SMEs.
3.4a Hardware: Other Metal Fasteners

Before this analysis begins, it is important to once again reiterate
that European competitors were excluded from the global analysis
in Section 3.3. Sections 3.3 and 3.4 provide market values, and
therefore, competitiveness can be compared. In 2014, the European
share of the global other metal fasteners’ market ($2.97B) was
$1.33B, 45% of the global market. Though Asia holds the largest
market share, Europe holds just under half. The top five European
exporters of other metal fasteners were Italy (European market
share: 35%, global market value: $467M), Germany (European
market share: 14%, global market value: $188M), France (European
market share: 11%, global market value: $146M), the UK (European
market share: 8.5%, global market value: $113M), and Hungary
(European market share: 4.2%, global market value: $55.2M). Italy
heavily outcompetes its European competitors, and a vast divide
exists between Italy and Germany – the next largest global other
metal fasteners competitor from Europe.
Portugal’s share of the European market was 1.1%, and global value
was $14.5M, which is most similar to the Czech Republic (1.3% of
the European market and global market value: $17.8M), Poland
(European market share: .92%, global market value: $12.2M), and
Belgium-Luxemburg (European market share: .78%, global market
value: $10.3M). From the analysis in Section 3.3a, the report concluded
that Portugal has a significant global market share, and though
Portugal will likely not become a top US producer of this product, it
can use its global exports to enhance US import opportunities.
This report would add that Portugal’s ability to export this product,
compared with its European competitors, is noteworthy. Portugal
should set export volume targets that are similar or greater than
the Czech Republic’s exports, while assuring that Portugal is not
outcompeted by Poland – a $2M matter. Above the Czech Republic
is Switzerland, which holds 3.3% of the European market and a
global market value of $43.4M. Within the next three to five years, it
is unlikely that Portuguese SMEs could develop an export strategy
to increase global other metal fasteners exports as aggressive as
necessary to outcompete Switzerland. Therefore, SMEs exporting
other metal fasteners should look target exporting similar volumes
compared with the Czech Republic to improve competitiveness in
the US, global, and European market.
3.4b Building Ceramics: Glazed Ceramics

In 2014, the European share of the global glazed ceramics’ market

($13.5B) was $6.67B, the largest continental share although Asia was
not far behind at $5.62B. Europe’s global glazed ceramics exports
growth rate is 2.4%, while Asia’s is 7.3%. If dialectical conditions
hold, Asia could claim the largest global market share within a few
years. The report recommends Portugal enhance US exports in this
product category and sector – although some product categories are
more volatile than others – and also suggest that Portugal consider
approaching the European Commission to discuss funding and
development support for Portuguese SMEs exporting in this area.
Continuing the 2014 analysis, the top five European exporters of

glazed ceramics were Spain (European market share: 40%, global
market value: $2.68B), Italy (European market share: 39%, global
market value: $2.62B), Poland (European market share: 3.3%, global
market value: $223M), Germany (European market share: 3.3%, global
market value: $223M), and Portugal (European market share: 3.2%,
global market value: $216M). Spain and Italy heavily outcompete
other European competitors, and a vast divide exists between
them and the rest of the top five (Poland, Germany, and Portugal).
Furthermore, a significant divide exists between Poland, Germany,
and Portugal and the next closest competitors – Ukraine (European
market share: 1.7%) and Russia (European market share: 1.6%).
The global competitors’ analysis found that Portugal’s share of the

global market is significant; the product category is more lucrative
than some of the hardware, electrical, and PVC products, but
Portuguese competitiveness has declined. Among its European
competitors, this is also true; Portugal fluctuated between the 3rd
and 4th largest global exporter from Europe from 2011-2013. In 2014,
Portugal was outcompeted by Germany and in 2013, by Poland.
Because Section 3.3b also highlighted that exports in this subsector
fall near the median of all Portuguese export sectors, Portugal’s
decline in competitiveness among its European neighbors is
especially pertinent. It was almost equally as likely that exports
would increase, as they would decrease. The report suggests
that even more emphasis and industry collaboration be focused
on revising recent export strategy in this product category and
subsector to regain the competitive advantage that Portugal has
partially lost.
3.4c Electrical: Light Fixtures

In 2014, the European share of the global light fixtures market
($46.4B) was $12.8B; Asia possessed the largest market share
at $29.1B. The top five European exporters of light fixtures were
Germany (European market share: 24%, global market value:
$3.03B), Italy (European market share: 15%, global market value:
$1.92B), Austria (European market share: 7.3%, global market value:
$930M), France (European market share: 6.4%, global market value:
$822M), and Spain (European market share: 6.1%, global market
value: $782M). Germany holds almost a quarter of the European
market, and Italy also has a sizeable share; the competition past this
point is close – a trend that continues through the top ten European
exporters of light fixtures. This trend also continues through 2013 to
2011, with Austria, Spain, and the Netherlands in fierce competition
in all four years.

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While the global competitors’ analysis found that the market is
growing at an average rate of 9% per year, the European market’s
average annual growth rate is 3.2%, and the US import market
is growing at an average of 12% per year. Europe’s light fixtures
exports are not growing at a rate consistent with the global or
US market. Again, this concerning factor can be used to support
Portuguese SMEs export development through enhanced EU
financing. Portugal held .96% of the global light fixtures market in
2014, .99% in 2013, 1% in 2012, and .93% in 2011. Table 3.1 looks at
Portugal’s most similar European competitors between 2014 and
2011. The table reveals that average growth rates among European
competitors in this product category are high; Romania’s exports
are growing as fast as the US market. Portugal’s growth rate is the
second lowest, behind Switzerland, and this further supports the
report’s recommendation that trade financing is essential for SMEs
in developing sustainable export strategies.
Table 3.1 – Portugal’s European Competition in the Global Light

Fixtures Market
2014 2013 2012 2011 Average

Country value value value value growth rate
Portugal $123M $117M $109M $104 4.3%
Estonia $111M $101M $88.9M $92.7M 4.6%
Norway $137M $128M $118M $107M 6.4%
Romania $129M $108M $92.8M $82.4M 12%
Switzerland $140M $129M $119M $133M 1.3%
3.4d PVC: Plastic Pipes

In 2014, the top global exporters of plastic pipes were Germany
(European market share: 31%, global market value: $4.08B), Italy
(European market share: 11%, global market value: $1.48B), the UK
(European market share: 6.3%, global market value: $681M), the
Czech Republic (European market share: 5.9%, global market value:
$775M), France (European market share: 5.8%, global market value:
$771M), and Poland (European market share: 5.1%, global market
value: $681M). These trends remain consistent across 2011, although
the Czech Republic and UK alternate, year by year, for the third and
fourth positions. The European market mirrors the global market,
with a slightly larger market loss from 2011 to 2012 – though fully
recovering and growing from 2012 to 2013 – and an average annual
growth rate of 1.2%, just under the 2% global average.

During 2014, the total global market for plastic pipes was $23.9B,
and Europe held the majority at $13.2B. The US held the top global
exporter rank – as discussed in Section 3.3d and this may be linked
to a domestic transition away from PVC, discussed further in Section
5.2d – but its 2014 market value was only 2/3rds of Germany’s. While
China outcompetes Italy in this product category, Italy’s market
value is over 1.5 times Turkey’s. It would appear that with Europe
holding the largest market share – a trend that has remained
consistent since 2006, when North America, not Asia, held the
second largest global plastic pipes market share – Portugal’s
competition is within Europe. This is would be particularly good
news because Portugal could focus on competition on a regional
level – a less intensive assessment – while reassessing and revising its
US and global market export development strategy, as discussed in
Section 3.3d.
Portugal will need to quickly utilize this regional strategy; Asia’s

global plastic pipes market value has been increasing at an average
rate of 5% annually, almost four times that of Europe. However in
2014, Europe held $13.2B of the global market, and Asia held only
$5.79B; it will be some time before Asia outcompetes Europe, if it
does, and Portuguese SMEs would be well advised to use this time to
consider the questions posed in Section 3.3d. Portuguese exporters
of plastic pipes would also be well served to focus on increasing their
competitiveness with Romania, Estonia, and Hungary; this strategy is
likely to have positive effects in the US market.
3.4e Metalware: Iron Pipes

Finally, in 2014, Europe held the largest share of global iron pipes
exports – a trend that has a lengthy history and caused deep divides
between all competitors. During this year, Europe held $14.7B of
this $35.8B global market, and for the first time since 2011, Europe
outcompeted Asia in this product, if only by a small margin. Table
3.2 below looks at competition between continents and annual
growth rates in depth. The impact of declining commodity prices
and increased tariffs and import restrictions on global competition
due to unresolved dumping disputes between American, European,
and Asian exporters on global competition is apparent. Asian
exports of iron pipes have fallen just as much as they have grown,
and this decline seems to be tapering off in Europe faster than
in Asia. Again, there are dialectical factors at work here, explored
further under Section 5.4, but the report aims to pull in the rather
disappointing and inconclusive analysis from Section 3.3e to make
a more decisive set of recommendations for Portuguese SMEs
exporting this product category.

• 79
Table 3.2 – 2011-2014 European and Asian Iron Pipe Exports
2011 2011 2012 2012 2013 2013 2014 Average

Value Growth Value Growth Value Growth Value Decline
Europe $15.9 3.1% $15.4 -2% $15.1 -2.6% $14.7 -5%
Asia $15.2 7.2% $16.3 -4.3% $15.6 -5% $14.7 -2.1%
Portuguese exports of iron pipes from 2014 to 2011 show steady

growth from $15.5M in 2011 to $22.9M in 2014; its exports shifted to
significant levels (greater than 0.0%) in 2012, and in 2014 it claimed
.16% of the global iron pipes market. With an average annual
growth rate of 10%, Portugal seems to be doing well in this market,
but US imports are not significant ($29K for 2014). Because of the
complex and dynamic factors at work, the report advises that SMEs
would be best served by gathering industry leaders and analytical
specialists in iron / steel and meeting with Portuguese and EU trade
authorities to better determine a collaboration that reflects mutual
and differing interests. Outcompeting Hungary, Ireland, Finland,
and Lithuania, with a particular focus on Estonia and Slovenia – their
closest and consistent global competitors – is the most definitive
strategy the report can recommend should SMEs continue to
develop exports within this subsector.
3.5 Conclusion
A large amount of information – both numerically and conceptually

– has been presented in this section on external competition. The
report views competition and export development as part of the
dialectical equation that influences construction materials trade
– two factors in a constantly changing environment. Section 3.2
used a frequency analysis to uncover the top exporters within this
industry, from China to Canada. China dominates, and Poland
and the Czech Republic are Portugal’s nearest overall competitors
across all products and subsectors. Though Portugal is most similar
to these two countries in some respects, its total sector exports
amount to only a quarter of Poland and the Czech Republic’s due
to inconsistency in export volume.
In hardware (other metal fasteners), Portugal is a significant

global exporter in a global market showing an average growth
rate of 2% where Asia holds 48% of the global market. Combined,
Europe and Asia comprise 93% of the total export market for this
product category. Within Europe, Italy dominates, and Germany
follows. Portugal’s strongest competitors are within Europe – the
Czech Republic, Poland, and Belgium-Luxemburg – and Portugal
looks especially well-suited to outcompete the Czech Republic.
Outcompeting Switzerland (their next competitor) will pose a more
difficult challenge.

Within glazed ceramics (and the ceramics subsector, in general),
Portugal is a much more significant competitor in a market
with 4% average annual growth, which is dominated by Europe;
Chinese competition is fierce, and a $1B difference exists between
Europe and Asia in this product category. Within a few years, Asia
may outcompete Europe. The report advises Portugal to use this
information to lobby national and EU authorities for increased trade
development financing and funding for SMEs. Portugal’s share
of the market is declining (from 2.1% in 2011 to 1.6% in 2014) and
requires support. Spain and Italy dominate the European market,
and a vast gap exists between their export volume and the rest of
the top European competitors, including Portugal. In this product
category, Portugal had an almost equal opportunity to increase
or decrease export volume; exports declined, and this should be
viewed as a strong case for reviewing requests for industry support
for SMEs.
In electrical (light fixtures), Portugal is again a significant exporter, but

export volume is declining at an average rate of $6M per year. This
is the largest market examined in this section, with over 9% global
market growth. Asia holds the largest market share (63%), and Asia
and Europe (28%) comprise 91% of all global exports in this product
category. Like hardware above, Germany and Italy are at the top of
European exporters, but competition is close at all levels. European
growth (compared to US and global levels) is low, ranging from a
third to a quarter of those markets. Like glazed ceramics, the report
advised that Portuguese SMEs leverage this knowledge to request
additional funding and support from national and regional institutions.
However, Portugal has the second lowest growth rate of its nearest
European competitors, and SMEs will likely need to offer a guarantee
of competitiveness or demonstrate highly targeted and realistic export
development strategies to secure such financial support.
In PVC (plastic pipes), again, Portugal is again a significant exporter,

and exports are in decline. Unable to keep pace with the global
market, at an average rate of 3% annually, this is the 3rd largest
market. Europe holds the largest share (55%); Europe and Asia
possess 79% of the market. North America holds another 16% – a
large share for comparatively fewer countries. This may indicate a
considerable deal of protectionism in the subsector but may also
reflect the effective of volatile oil prices on production, as well as
a lack of development in this subsector in Oceania, Africa, and
South America. A handful of retailers, distributors, and importers
emphasized that the US construction materials market is: “closely
related to the oil field… We’ve seen a dip in some sales in some
product categories.”24 Again, Germany and Italy dominate the
European market, and Portugal’s nearest competitors are Romania,
Estonia, and Hungary. The report suggested that Portuguese SMEs
re-evaluate the sustainability of exporting these products and
within the subsector in general.
Finally, the most precarious subsector, metal (iron pipes) in 2014,

Europe reclaimed the majority of global market by a slim margin
24 Interview 2, Appendix 4; see also Interview 4.

• 81
from Asia after being outcompeted from 2011 to 2013. Europe
and Asia hold 82% of the export market; North America has 13%,
and South America has 5%, highlighting the extent of tariffs
against Asian (particularly Chinese) exports globally and lack of
development in this subsector in Oceania and Africa. This is the
only product category where Portugal is not a significant exporter,
but export volume is increasing. In this second largest market with
a .5% global decline, the report suggested SMEs consider decline
in commodity prices, market access barriers, and the volatility of
global and US markets before enhancing their export strategy in
this subsector. Should Portugal want to press forward with export
development in this subsector, the report recommended focusing
on outcompeting Hungary, Ireland, Finland, and Lithuania, with a
particular focus on Estonia and Slovenia.
Portugal faces many challenges in developing and enhancing

its export development and growth strategy. The report focused
on general and specific ways that Portuguese SMEs can work
towards short and long-term goals that will enable them to export
sustainably. Some subsectors and product categories carry a
considerable market access barriers, and Portuguese companies may
be better advised to work on building relationships, carving out its
competitive advantage, and increasing exports outside less volatile
markets as a precursor to US market access and growth. The report
turns to setting out, in broad detail, legal and regulatory compliance
issues necessary to gain US market access to assist Portuguese SMEs
in this complex endeavor with many moving parts.

Section 4:
Legal Regulations
and Compliance
4.1 Introduction
This section focuses on legal, regulatory, and compliance issues in

the US. Portuguese SMEs are encouraged to familiarize themselves
with US import regulations and compliance beginning with the
200-page document, Importing into the United States: A Guide for
Commercial Importers (“importing guide” hereafter), from the US
Customs and Border Protection Agency (CBP), a division of the US
Department of Homeland Security. The document includes advice
on expedited merchandise clearance, full scope documentation,
foreign trade zones, bonded warehouses, packing, invoicing, and
country of origin marking. As a resource for guidance, this section of
our report and the CBP importing guide are intended to provide an
overview and do not contain the sort of verification and detail that
parties like licensed brokers or customs attorneys would be legally
authorized to provide.
We have made every effort to include essential requirements,

but it is not possible for a book this size to cover all import laws
and regulations. Also, this publication does not supersede or
modify any provision of those laws and regulations. Legislative
and administrative changes are always under consideration and
can occur at any time. Quota limitations on commodities are also
subject to change. Therefore, reliance solely on the information in
this book may not meet the “reasonable care” standard required
of importers (CBP 2006).
For more detailed compliance and regulatory information,

the report encourages SMEs to contact a US CBP attaché,
representative, or specialist at one of the European foreign offices.
They will most likely also be able to assist exporters with the
transition from the Automated Commercial Environment (ACE) –
how US imports and exports are currently processed – to the Single
Window, a paperless system designed to improve efficiency and
ease in compliance with US import regulations and compliance.
The transition is expected to be completed by December 2016.
4.2 Labeling and Packaging
Clear labelling is one of the best ways to expedite the process

of importing to the US. The CBP advises that “palletization” –
transporting cargo in pallets or other consolidated units – is another
effective technique that can aid the import inspection process
once cargo has arrived at a US port. The CBP also recommends
that itemized labelling and documentation of materials helps

• 83
the exporter receive the correct tariffs applied to each product.25
If different items packaged collectively are not clearly labelled,
the highest tariff for all items packaged together will be applied;
having interviewed trade associations, importers, and distributors
the report fully recommends care and compliance with US labeling
and packaging requirements. Upon reaching the first port of entry,
items are also sampled and verified, and evidence for performance
testing is evaluated.
For almost all products, country of origin labelling is required,

with the exception of a range of products listed in the importing
guide (see CBP 2006: 97-100). Some subsector products categories
assessed in this report are included on this list, such as (metalware)
metal bars and (hardware) screws, bolts, nuts, and washers. There
are also requirements for imports arriving in wood packaging
material, including pallets, crates, and boxes; packaging must be
treated and marked or subject to immediate (re)export (CBP 2006).
4.3 Special Requirements
The CBP has special requirements for a range of subsectors that

fall within the scope of the report, including metalware, electrical,
hardware, and PVC products, and requirements can have both
federal and state components and vary state to state.26 Products
require testing and certification according to consumer safety and
environmental protection standards (see Section 4.7 for further detail).
Additionally, many retailers and distributors interviewed said that
product certification serves as an entry barrier to ensure imported
products are of acceptable quality, and that they would be unlikely
to speak to any foreign producer unless their products passed
certification. “They have to supply very detailed information about what
materials, the cost, if they’ve passed US standards, product codes, and
everything else. It has meet all the criteria for us.”27
4.4 Tariffs
The report analyzes a vast range of subsector product categories

and aims to give tariff information where Portuguese SMEs are most
likely to find tariffs on their imports. This section focuses specifically
on tariffs for the product categories analyzed in Section 2. For other
subsector products where Portuguese exporters face tariffs upon
entry into a US port, further information has been provided in
Appendix 3 and HS codes can be consulted in Appendix 3.
The US has bilateral investment treaties (BITs) and / or free trade

agreements (FTAs) with a range of countries, and the general
rate of duty (tariff) does not apply to these countries. They receive
preferential or “special” duty rates. Additionally, there are “column
25 See Appendix 3 for a sample list of tariffs that apply to the subsectors and product
categories assessed in this report.
26 Product names, not HS codes, are listed in the importing guide, see pages 106-114, 133.

2” or “statutory” rates, which are reserved for countries where the US
has issued an embargo, such as Cuba or North Korea. Beginning
with the hardware subsector, tariffs range between 2.3% and 6.1%
per dozen or per kilo for padlocks product categories, between 2%
and 7.5% per item or per kilo for metal mountings, and from 1.1¢/
kg + 2.9% to 3.9 per kilo for other metal fasteners. For the ceramics
subsector, tariffs range between 3.2% and 13.5% per square meter
(m2) for roofing tiles, 10% per m2 for all unglazed ceramics, and from
8.5% and 10% per m2.
Within the electrical subsector, tariffs ranged between 2.7% to 12%

per dozen or per item on light fixtures. In the PVC subsector, tariffs
ranged between 3.1% and 6.5% per kilo – with one product being
tariff-free – for plastic pipes and 4.2% to 6.5% per m2 or kilo for other
plastic sheeting. Finally, the metalware products in this report have
surprisingly low general tariffs considering the on-going dumping
disputes and tariff hikes for countries like China; for iron pipes, tariffs
range between 3.2% to 6.2% per kilo, and for iron stovetops, tariffs
range from 2.9% to 5.7% per item. Exporters should also be aware
that certain products are subject to US tax and / or user fees upon
entry and that tariffs differ from US port to port. Generally speaking,
the sea port with the lowest tariffs is Newark, New Jersey, while
New York state has some of the highest rates of duty. For detailed
information, exporters are advised to contact an import specialist at
the port through which products will arrive.
4.5 Distribution Structure and Channels
Many importers are large general contractors or distributors who

have applied for and gained importer’s licenses to lower costs –
most notably time and money – and diversify their businesses; this
gives a general indication of the market barriers that Portuguese
SMEs face in the US. While conducting the interviews, there was
persistent difficulty identifying importers – something consistent
across US sectors. If Portuguese SMEs were to conduct a Google
search of “US construction materials importers” or “US construction
materials buyers”, for example, they would find no company name
or contact details. Rather, results bring up import-export sites –
most of which require a buyer or supplier to register in exchange for
access to a small database across ten countries, including the US.
The report parties located importers by inquiring about companies’
roles in the US supply line. One retailer said knowing importers
comes with having “contacts” and what products producers send
for distribution is based on volume. “[It’s] American companies just
sending out what they’ve bought in big numbers. They are like our
middleman.”28
Another retailer agreed that distributors are like middlemen in

the import process, but they exercise more choice and control in
the products and origin of products. “We tell our distributor what
we need and the price, and they get it in for us.”29 The difficultly

• 85
Portuguese SMEs face is gaining face-to-face access to these
industry elites to influence purchasing decisions. The same retailer
suggested hiring a marketing management firm. “We’re a Spear
One member; it’s a collective of a lot of different companies and
especially good for small and medium-sized businesses.”30 Another
retailer said that they acquire products through distributors by
being part of a large affiliated dealers, which is: “like an exclusive
club with a wide reach, a big presence.”31 This gives context to the
recommendations in Sections 2 and 3 that “relationships are key”
to being a successful US construction materials producer.32 Without
relationships and connections, SMEs face a situation where they
are welcome to: “send a package, with full information... If [decision
makers] want it, they’ll call.”33 A distributor interviewed suggested
that US companies: “get a lot of emails like that, and so it would
have to be pretty specific for me to look at it.”34
The US government once maintained a database of construction

materials importers and distributors for foreign suppliers to contact,
but this database was terminated in 2010. According to the site,
the database was shut down as the leads generated through the
American government’s database were overwhelmingly fake or “dead
ends” for foreign suppliers and because importers and distributors
were receiving a large volume of cold calls from exporters looking to
sell their products. The Buy American provision may have played a
part in the decline of foreign suppliers’ access to importers.
In the case of construction materials, the best avenue for US

distribution may be through wholesalers and distributors, not
importers. Resources for locating distributors include a website
called “SICCODE”, where exporters can locate US companies by
Standard Industrial Classification (SIC), North American Industry
Classification System (NAICS) codes, or targeted internet searches,
such as “roofing tile distributors” or “hardware distributors Arizona”.
The problem with this approach to distribution is that the
companies are often large, such as Halliburton. Industry experts
have advised that large and established wholesalers, distributors,
and retailers acquire new materials predominantly through existing
contacts / networks or “owner” and “designer” agreements regarding
projects’ customized needs that change dynamically. This is why
relationships are critical for Portuguese SMEs in developing a
sustainable export strategy for the US market. Even for distribution,
the US market requires intimate knowledge and deep connections
that are fostered over time through face-to-face contact.
There are several ways to facilitate knowledge and foster

relationships, including a continued relationship with the report
parties. One industry specialist advised that an excellent website,
34 Interview 2, Appendix 4; Portuguese SMEs exporting metal fasteners should particularly

read this interview.

updated with a full listing of products and certification information is
the first step, and the challenge for many Portuguese SMEs will be to
present English versions of their websites. From interviews, it appears
that while an excellent, updated, English-language website helps a
great deal in steering US retailers, distributors, and importers towards
Portuguese products, ultimately, the construction industry remains
traditional in its business development practices. “We’re kind of an
old fashion company, not super high tech. [We don’t have] a huge
online presence for sales or purchasing. [We are] using this down
time to upgrade software and purchasing systems. But we tend to
like to build relationships based off of word of mouth, reputation,
product quality that sort of thing.”35
Another way to deepen knowledge and build relationships is

through trade shows, trade publications, trade associations, and state,
regional, and national conferences – explored further in Section 5.4.
A brick and mortar headquarters is also an option for facilitating an
import and / or distribution license, albeit a costly one, or purchasing
a US subsidiary. “For me, the best thing to do this is to open a big
showroom, but it’s expensive.”36 For SMEs, this is either having a
Portuguese representative that is either deeply familiar with the
US construction materials market or a trade specialist. “They need
someone who is very familiar with all shipment and marketing needs
here though, and I don’t know if a Portuguese representative already
knows this.”37 This individual or collection of individuals should serve
as the SME’s primary point of contact in developing relationships and
sharing in-depth industry knowledge.
From here Portuguese construction materials SMEs can explore

several options to initiate or enhance US imports, including:
distribution partner searches; face-to-face networking; establishing
a trade office; ensuring US product approval and certification
compliance; setting up a system for exporting and receiving
materials stock; and maintaining a consistent presence among
distributors, wholesalers, and retailers. As this report has repeatedly
stressed, consistency is key to an effective and sustainable US
market strategy. Construction materials needs change dynamically,
and quick availability is essential in the fast-paced industry. “I need
to make sure I have enough in my supply chain, and so delivery
time may be a bigger concern. [Whether] I need a 30, 60, or 90-
day supply affects my purchasing process, depending on price or
movement from place to place. If I can buy direct from someone
local then that’s what I’m doing to do.”38 SMEs that are flexible,
present, and well-known are more likely to be successful. “The
industry is moving so fast over the last couple of years, we can’t
afford to source products from far away.”39
37 Ibid.

• 87
Options vary for fostering successful relationships and knowledge
that contribute to initial and enhanced distribution range. The
essential point is that relationships and knowledge can only be built
sustainability over time and in-person. As one retailer interviewed
recalled:
We’re getting a lot of people trying to sell German and European

materials in here lately… they are looking for opportunity. I love
new technology… but you have so many entrenched ideas about
what to use, when to use, and then there are so many regulations!
It’s hard to get new products approved, but once you do, you
open up an avalanche of opportunity. If you have the money and
resources to develop relationships here in the US (distribution,
expertise, all of those other factors, logistics, service), it can really
pay off; but you can’t just come in here with a glossy brochure
and your new product and think it’s going to sell.40
4.7 Effect of Legislation
The industry specialist quoted above expressed that exporters often

lack knowledge about the US product approval process, discussed
in this section. The section also highlights the most significant
piece of US legislation for construction materials trade – the Buy
American Act provision, part of the 2009 American Recovery and
Reinvestment Act (ARRA). Beginning with the US product approval
process, products are tested to confirm their specifications and
that they meet minimum quality standards. “No one wants to buy
something that’s not tried and proven.”41 This process varies state
by state and even county by county; however, several states and
regions share procedures, and checking requirements with the
relevant trade agencies and associations will also help Portuguese
exporters with marketing their products in the US, particularly
among designers like architects and engineers.
To use an example from the Florida Department of Community

Affairs, Building Codes and Standards (2011), the process for product
approval entails:
1. Submit application for product approval

2. Initial review conducted
3. (If product passes initial review) Validation that product
complies with federal, state, and / or local codes and regulations
4. (If product validation is certified) Product submitted for
evaluation and quality assurance
5. (If product passes evaluation and quality assurance assessment)
Product submitted for testing
6. (If product passes testing) Product approved by relevant
authority (fee may be applicable).
Exporters have various options and paths in this process, including

having the agency write the product specification instead of writing
it themselves. Exporters can also check with the ISO or National
Evaluation Service (NES, US) to verify that products meet standards.
Exporters are also advised to know which states they want their
products to be distributed and sold, which emphasizes the need for
short and long-term planning. They must ensure that their products
pass certification before they reach their respective US port of entry.
Most states have an approved list of products that are authorized
for distribution or sale within the state, and it is highly likely that
many of the products from the subsectors and product categories
analyzed in this report are included on those lists.
One particular product category has its own certification process –

incandescent light fixtures. The following information was provided
by a retailer and importer and does not pertain to halogen or LED
light fixtures. For SMEs to get their incandescent light fixtures on
the US market, the product must pass a costly certification process.
The standard certification is from Underwriters Laboratories (UL) –
an American safety and compliance company with testing bases in
Africa, Europe, North America, Asia Pacific, and Latin America. “Lights
that are used for commercial installation have to go through the UL
certification process, which costs European producers $30,000 to
$40,000 per fixtures. It’s a type of American protectionism; they don’t
call it that, but that’s what it is. And it’s per product; if you have a
green and red fixture, that’s double the price.”42
This certification, which the retailer / importer also referred to a

market barrier for companies not selling high volumes on the US
market, serves as a sort of “club fee” for entering the US market. For
SMEs exporting incandescent light fixtures for commercial building
projects, the report offers two alternatives. The first is a “field UL” that
can be issues for $100 or $200, and retailer / importer believed that
the field UK is easier to obtain: “with lights that are more expensive;
wholesale is [even] easier.”43 The second alternative is that UL is not
the only company authorized by US Occupational Safety and Health
Administration (OSHA) to issue a certification mark for getting
lighting products certified for the US market. “There are now a few
other companies that can do this. The trouble is some cities still
require UL (even though federal law [like Buy American] is different),
and UL certified products have a name-recognition that the other
OHSA providers do not. Most foreign vendors do UL”.44 The report also
advises that products are approved before attending trade shows,
organizing a partner search, or presenting the product to distributors
or retailers in a face-to-face meeting. This information has been
included to help Portuguese SMEs ensure they are as prepared as
possible when developing sustainable export growth strategies.
Other similarly complex legislation that affects Portuguese SMEs

looking to export to the US that is similarly complex is the 2009
Buy American provision, which applies to any US business receiving
funds from a federal, state, or local government authority. Part of
43 Ibid.
44 Ibid.

• 89
the ARRA – otherwise known as the Stimulus Package or Recovery
Act – the US, like many nations, enacted legislation after the 2008
global financial crisis to aid recovery efforts. As has since been
argued across academic, public, private, national and international
fora, this legislation borders on trade protectionism and has, in part,
prompted retaliatory actions across the globe, further restricting
trade flows, trade growth, and economic development. The Buy
American Act was no exception.
For example, the US legislation requires any public building or

works project to use only US iron, steel, or other manufactured
goods. One trade association representative interviewed continues
to work extensively on changing the Buy American provision and
believes it affected many members of his associations.
Our policy position is to oppose the expansion of Buy American

and make the definition more uniform. [The US Department of]
Transport has a different definition than Department of Defense,
and for Transport the definition is very restrictive and makes it
difficult for contractors to get work done in a timely and effective
manner. There are two different laws that govern the same thing,
and we are trying to change that. If you’re a contractor that works
for multiple agencies, it’s difficult too because it affects your
supply... We’ve been working mostly at the state level, not even
at the federal level, because the barriers are even more restrictive
at the state level. If you are a federal contractor or taking federal
money, you are allowed to treat products with whom the US has
a preferential trade agreement as American made, but at the
state-level this doesn’t apply. On a federal project, Portuguese
materials might be fine but not at the state level.45
To clarify the point about countries the US has a BIT or FTA with and
the Buy American provision, the report finds that Portuguese SMEs,
especially those looking to import metalware, have the following
reasons to be optimistic:
»» A foreign product may be purchased and used for federal

contracts if a contracting officer believes that the lowest domestic
price offer is unreasonable
»» Exceptions apply to:
–– Acquisitions for small US businesses

–– End products for resale
–– Construction contracts below a certain value threshold (GSA
2014).
This, in combination with various dumping disputes, helps continue

to clarify why importing and distribution in the US requires long-
term, intensive strategy development.

• 91
4.8 Conclusion
As this section draws to a close, it is appropriate to highlight to

Portuguese SMEs that the US market is vast (this will be the subject
of the immediate and coming sections). There are many companies
of various sizes and expertise looking to gain or increase US market
access and distribution. The costs of compliance failure are great;
there can be mandatory waiting periods if compliance is not
adhered to or if products fail to be approved. SMEs should make no
mistake that in a market of this size, where competition is extensive,
second chances are uncommon. The costs of being “export ready”
are great. To continue to clarify the US market picture for SMEs, the
next section features an “insider’s perspective” of the US market.

Section 5:
An Insider’s Perspective
of the US Construction
Materials Market
5.1 Introduction
In this section, the report offers Portuguese SMEs a behind-the-

scenes sketch that first looks at US sector and product category
imports. This differs from the competition analyses of Sections 2 and
3, as it analyzes supply and demand, rather than import / export
origin. Following this, the report shifts to an exploration of US trends
that affect demand for construction materials by examining market
indicators such as employment data. Here the report aims to refine
export development strategies and give a sense of the best states in
which to market products.
After exploring US demand, the report turns to helping Portuguese

SMEs understand how they can supply US demand through a series
of recommendations that builds on the previous sections. This is
brought full circle with an assessment of what Portuguese SMEs
should expect when competing to supply US demand, including
information on trade shows and publications that is essential
to begin or enhance US networking and relationship-building
campaigns. The goal of this fifth section is to provide SMEs with
exclusive information that can be used to gain a competitive edge.
5.2 US Construction Materials Demand
The section begins by looking, generally, at US demand for products

within sectors included in this report and then, specifically, at US
demand for the product categories within the report. This gives
both a macro and micro view. The US construction industry has
survived and thrived due to competitiveness, product quality
reputation, governmental support, subsidies, labor union support –
atypical in the US – and powerful lobbying at local, state, national,
and global levels.
It is essential for Portuguese SMEs to understand that this industry is

protected; however, as international institutions have urged the US
to open its construction market to foreign suppliers, it has complied
– particularly when it suits its needs. For example, the 2000 “Dotcom”
economic surge fostered a nearly unprecedented expansion
of industrial building that had not been witnessed since 1950’s
industrialization. When the Dotcom “bubble” burst, large facilities
were abandoned and sold to banks or overseas investors, who used
the opportunity to set up bases in the US and grow their businesses
and interests in the US economy. A considerable portion of the
Dotcom bubble building was conducted by foreign contractors and

• 93
suppliers, but since the 2008 global economic crisis, a preference for
domestic contracting and supply has strongly re-emerged.
When asked what portion of construction materials used in the US

are foreign versus domestic in interviews, industry experts said it
would be incredibly difficult to say because it varies by project, the
owner’s wants and needs, and subsector.46 For example, the owner
may want specialty cabinets from Italy because they have used
them in the past and prefer the look and / or quality, or the owner
may want to save costs and buy cheaper cabinets from China. At
times, the owner and designer select the products collectively, or
the designer may suggest a substitute for an owner-recommended
product to offer value. This industry expert offered that while many
retailers suggested price matters most in purchasing decisions,
materials that cost more – no surprise – are also valued for higher
quality and product longevity.47 Several retailers interviewed also
confirmed that price and quality are the main factors in purchasing
materials. “There’s a wide gamut, some are all about what it’s going
to cost them. They are all different, everyone likes to save a buck but
some are more into quality.”48 Demand for construction materials
in the US is simply dynamic and highly subjective. Another industry
expert suggested that foreign versus domestic demand varies by
subsector. “Some products like timber may be more domestic,
same for cement; steel products are really a mixed bag.”49
5.2a: Metal Sector Demand

Beginning with the largest sector, including both hardware and
metalware subsector product categories, the US demand for metal
is high; it is the fifth largest sector for US imports and has been
since 2010. Prior to 2009, it was the sixth largest US import sector,
which shows the continued and increased demand for metal
imports in the US. The metals sector falls behind the chemical
products, transportation, mineral products, and machines sectors in
US demand. In 2014, the most in-demand metal product categories
in the US were:
1. raw aluminum
2. iron pipes
3. metal mountings
4. iron fasteners
5. other small iron pipes
6. other iron products
7. refined copper
8. hot-rolled iron
9. coated flat-rolled iron.50
46 See Interviews 10 and 11, Appendix 4.
50 See Appendix 2 for HS product codes.

Each of these product categories constituted more than 3% of
the total US metal imports. Product categories lower in demand
continue to total more than $1B in US imports; the report uses
the 3% marker as an indicator of the most in-demand imported
products for that year. Year to year, there is variance. For example in
2013, refined copper was in higher demand than iron pipes; other
iron products were also more highly demanded than other small
iron pipes, and hot-rolled iron and coated flat-rolled iron were lower
in demand (less than 3%). In general, the most demanded product
categories fluctuate year to year, but raw aluminum is always the
most demanded product category.
The reason for this – and for other product categories in high
demand – likely relates to the Buy American requirement in federal
contracting. Raw and base material products can be “melted and
poured” in the US, which is how the Buy American provision defines
“US-made” products. It is also important to consider that foreign
products are allowed on federal contracts, as long as they come
from a country with which the US has a BIT or FTA.51 Under certain
circumstances, products from (least) developing countries are also
allowed on federal contracts under the Buy American provision.
While it is not in the interest of this report to argue either side, it
appears that Buy American does impact trade in constructional
materials and that the Buy American provisions could be classified
as discriminatory.
Table 5.1 shows a general breakdown of US import value and

market share of metal sector and product categories within the
hardware and metalware subsectors from 2011-2014. From this table
a numerous of important observations can be made:
»» Though 2012-2013 experienced a small downward spike, the

metals sector, overall, shows slow, positive growth in value,
although its share of total US imports is neither increasing or
decreasing; this suggests there is a steady domestic supply chain.
»» As detailed in Section 2, the padlocks product category shows
similar growth in share and value – value growing more than
share; this may mean that domestic supply has decreased or costs
of importing (transport, raw materials, labor, processing, etc) have
increased.
»» The metal mountings product category shows excellent growth in
value; however, as a percent of metal imports, metal mountings
are unsteady. This is likely due to domestic supply issues, demand
increases, and / or currency fluctuations.
»» Iron stovetops, more than any other product category or the
metal sector as a whole, has experienced consistent growth in
terms of value; share has declined slightly in 2014. Value growth
has somewhat outpaced share growth, which may indicate
similar findings to that of metal mountings; there is also a chance
that consumer preference for upscale goods may be a factor.
»» Iron pipes continue to recover but have not yet returned to 2012
value or share import levels. It seems, particularly in the US, there

• 95
are quality-control issues with this product category that have
affected import preference (demand for imported iron pipes
sharply decreased following quality issues and has not returned).
Table 5.1 – US Metal Sector and Subsector Product Categories

Demand Levels (2014-2011)
Metal Other Metal Iron Iron

Metals Padlocks
Mountings Fasteners Stovetops Pipes
2014 Value
$127B $2.2B $5B $148M $2.51B $5.75B
2014 Percent
5.8% 1.7% 3.9% 12% 2% 4.5%
2013 Value
$117B $2.17B $4.84B $161M $2.46B $4.93B
2013 Percent
5.5% 1.9% 4.1% .14% 2.1% 4.2%
2012 Value
$122B $2.03B $4.85B $180M $2.22B $6.12B
2012 Percent
5.8% 1.7% 4% .15% 1.8% 5%
2011 Value
$118B $1.87B $4.45B $165M $2.18B $5.13B
2011 Percent
5.7% 1.6% 3.8% .14% 1.8% 4.4%
Because of the scope of the report, not all product categories that
Portuguese SMEs currently export or plan to export are included. At
this point, the report would like to highlight that in iron housewares
or “table, kitchen or other household articles and parts thereof, of
iron or steel” imports in the US have witnessed steady value growth
from 2011 to 2014, although import share has only gone up once, in
2013 by .2% and returned to 1.6% after. The four-year average import
market for these products in the US is $2B. Iron toiletry or “sanitary
ware and parts thereof, of iron and steel” – another product category
of interest – imports in the US mirror changes witnessed in other
metal fasteners: steady growth in value and share with a sharp
increase in 2013 and small decline in 2014. 2014 imports are still
above 2012 levels, both in value, which exceed 2012 considerably,
and import share, which is the same as 2012.
Overall, the demand for metal products in the US is consistent

and growing, both in value and as a share of US metal imports. A
distributor interviewed said demand is the biggest driver of the
metal market, and it includes demand for variety and a “need

to be able to get products quickly”.52 This supports the analysis
from Section 2 and advice from Section 4 about consistency in
Portuguese exports to the US. In the micro sense, the US market
is a good export destination for Portuguese companies exporting
the product categories in Table 5.1 and the paragraph above.
In the macro sense, the US market also appears to be a good
export destination for Portuguese companies exporting metal
products from the hardware and metalware subsector – although
caution must be exercised with particular metal products due
to US legislation, attitudes towards certain foreign products, and
international disputes and import quotas.
5.2b: Ceramics Subsector Demand

The ceramics subsector is comparatively smaller than the metal
sector, as it is a subsector of the larger, stone and glass sector;
the stone and glass sector is also imported in considerably
smaller volumes into the US than metals. Stone and glass is the
sixth smallest import sector for the US, and only approximately
ten product categories or 25% of the stone and glass sector are
ceramics. Therefore, this demand analysis focuses on a much
smaller area of imports. In 2014 in the US, the most imported
product categories within ceramics were:
1. Glazed ceramics
2. Bathroom ceramics
3. Laboratory ceramic ware
4. Ornamental ceramics.
The report recognizes that laboratory ceramic ware and ornamental

ceramics are not likely export products for Portuguese SMEs in
the construction materials industry but has included them to
demonstrate the small scope of the US ceramics import market.
Because the ceramics subsector is smaller – in terms of import
volume, value, percent, and product categories – the range for
import share was extended to 2%; each of these product categories
constitutes 2% or more of all US stone and rock sector imports.
Glazed ceramics, the largest product category imported, is the
only of the three product categories examined in this report to be
imported in high volume. From 2011 to 2014, there was one change
in imports in this subsector; since 2011, refractory ceramics have not
been imported at 2% or more of all stone and rock sector imports,
which is to say that their imports were not at a high level, though
still significant.
Table 5.2 below shows the import values and shares for glazed
ceramics, unglazed ceramics, and roofing tiles from 2011 to 2014, and
the table reveals similar findings to Table 5.1 (metal sector), including:
»» Though percentage of total US imports from the ceramics

subsector have declined here and there, values continue to stay
strong and growing.

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»» After a significant bump in imports after 2013, glazed ceramics
and roofing tiles have lost noticeable value and share; glazed
ceramics have returned to their pre-bump levels.
»» Unglazed ceramics have maintained a consistent, although not
strongly increasing, market for imports in the US.
»» With roofing titles, the opposite is true; the reason for this could
be preferences in building materials expressed by owners or
designers. Industry experts said that roofing tiles are used in
oceanic or volcanic high heat climates, such as the American
(south)west, and they may have fallen out of favor with owners,
designers, and/or consumers. However, parts of the US south, mid-
west, and west – from California to Texas – are beginning to face
increasing climate change effects, such as desertification, and
there may be a future trend towards ceramic roofing tiles.
Table 5.2 – US Ceramic Subsector and Product Categories

Demand Levels (2014-2011)
Glazed Unglazed Roofing

Ceramics53 Ceramics Ceramics Tiles
2014 Value $4.3B $1.23B $259M $15.5M
2014 Percent 23.8% 6.9% 1.4% .087%
2013 Value $4.2B $1.29B $237M $20.6M
2013 Percent 24.5% 7.4% 1.4% .12%
2012 Value $3.8B $1.08B $209M $16.7M
2012 Percent 23.3% 6.8% 1.3% .11%
2011 Value $3.6B $1.01B $189M $17.8M
2011 Percent 23.7% 6.7% 1.3% .12%
Two additional product categories with demand information of

interest to Portuguese SMEs may be interested in knowing US
demand information for are bathroom ceramics and ceramic bricks.
Bathroom ceramics, such as sinks, sanitary fixtures, baths, bidets,
urinals, or toilets, are experiencing intermittent demand in the US,
53 The report recognizes that not all products in this subsector are construction materials.
The product categories included in this subsector are all product categories imported a
significant levels (0.0% or higher): glazed ceramics, bathroom ceramics, laboratory ceramic
ware, ornamental ceramics, refractory ceramics, ceramic tableware, unglazed ceramics, other
ceramic articles, ceramic bricks, and roofing tiles. See Appendix 2 for HS product codes.

and the same is true for ceramic bricks (see Table 5.3 below). For
both product categories, import demand – both as a value and
share – peaked in 2013, similar to US demand for glazed ceramics.
Table 5.3 – US Bathroom Ceramics and Ceramic Bricks Demand

Levels (2014-2011)
Bathroom Ceramics Ceramic Bricks
2014 Value $961M $33.3M
2014 Percent 5.4% 19%
2013 Value $1B $38.1M
2013 Percent 5.7% 22%
2012 Value $872M $28.4M
2012 Percent 5.5% 18%
2011 Value $789M $30.2M
2011 Percent 5.3% 2%
Bathroom ceramics appear to be a highly lucrative and in-demand

product category, and from this initial exploration, Portuguese SMEs
may be well advised to diversify their US exports through this product
category (discussed further in Section 6.2). The top five countries
importing bathroom ceramics to the US for 2014 were China (45%),
Mexico (40%), Thailand (5.2%), Turkey (1.1%), and India (1.1%). The top
five countries for global bathroom ceramics exports in 2014 were
China (40%), Mexico (7.3%), Turkey (4%), Vietnam (2.9%), and Thailand
(2.9%), and within Europe the top five global bathroom ceramics
exporters are Germany (19%), Italy (14%), Portugal (global market
value: $155M, European market share: 7.7%), Poland (6.4%), and Spain
(6%). Portugal has a competitive edge in these products, and it might
be worthwhile for those in the ceramics subsector to further explore
this export opportunity in the US.
Ceramic bricks, while not a complex product, are in higher demand

in the US than roofing tiles, and it similarly may be worthwhile
for Portuguese SMEs to explore temporarily substituting or
supplementing roofing tiles exports to the US with ceramic bricks
as part of a short and long-term strategy. This would allow SMEs to
build relationships with US importers, wholesalers, distributors, and
retailers while marketing roofing tiles as a cost effective product
to cope with increasing US desertification in the years to come.

• 99
The top five countries importing ceramic bricks, a $33.3M market,
to the US in 2014 were Mexico (53%), Germany (15%), Canada
(12%), China (9.8%), and Spain (4%); Portugal is the 8th largest US
producer of ceramic bricks, just behind Italy (2%) and Denmark
(1.3%). The top five countries for global ceramic brick exports in
2014 were China (31%), the US (3.3%), Malaysia (2.6%), Mexico (1.6%),
and Australia (1.4%), and within Europe, which holds the largest
share of the global market for ceramic bricks, the top five exporters
were Germany (24%), Belgium-Luxemburg (19%), the Netherlands
(17%), Belarus (5.9%), and Denmark (5.8%). Portugal holds .72% of
the European market and $4.45M worth of global exports, making
ceramic bricks just as, if not more, competitive than other product
categories reviewed in this report.
5.2c Electrical Subsector Demand

The subsector for electrical products is the most difficult to gather
information on, due to product categories being split between the
“miscellaneous” sector for light fixtures and “machines” for LVPE
(electrical transformers, control boards, capacitors, ignitors, etc). As
such, this analysis will be able to contribute values and shares for
only the two product categories assessed in this report, and not the
electrical subsector. To nuance this information, the report adds
that in 2014, US demand for products in the machines sector was
$617B and in the miscellaneous sector — which includes product
categories such as seats, video and card games, pens, prefabricated
buildings, and lighters — was $76.9B. Additionally, the previous
two analyses have identified and gathered information on related
products that were not specified for study in the scope of this report
but for which Portugal has potential for developing exports to the
US. This analysis includes US demand information for two related
products to determine if Portuguese SMEs could develop a similar
competitive advantage in the US market.
Table 5.4 provides a breakdown of US demand for these product

categories, and following are the findings that can be extracted
from analysis of this table:
»» In 2012, US demand for light fixtures increased, shifting it

to the third largest US import product category within the
miscellaneous sector, which contains over 25 product categories.
This resulted in large import value increase but a small share for
miscellaneous imports, and this demand increase has continued
to increase in value. It is possible that a demand increase of this
scope indicates a shift to a larger reliance on imported light
fixtures. US manufactures could have slowed down production
for a variety of reasons, as well; however, a shift of this portion
indicates that domestic demand decreased.
»» Out of over 100 product categories in the machines sector in 2014,
LVPE was the 15th largest product category imported into the
US; value has increased with US imports but share has not. This
indicates that demand may be steady or that technical or quality
improvements may be driving product price; as always, there
could also be the typical range of issues with currency, availability,
and import costs that factor into the value increase.

»» In 2014, electrical transformers were the US’ tenth largest
imported product category within the machines sector, and
while share of US machines imports remain constant, value
continues to rise, by a billion dollars in 2012. This would indicate
no change in domestic US production of electrical transformers,
rather increased product price or demand for foreign electrical
transformers, in addition to the typical range of issues highlighted
in the LVPE bullet point above.
»» In 2014, electrical control boards came in just behind LVPE as the
16th largest product category imported by the US; in 2012, they
came in 22nd, reflecting the tremendous value growth within this
product category shown in the table below - $3B within 4 years.
Table 5.4 – US LVPE and Light Fixtures Demand Levels (2014-2011)
Electrical Electrical
Light Fixtures LVPE Transformers Control Boards
2014 Value $9.5B $9.89B $13.7B $9.64B
2014 Percent 12% 1.6% 2.2% 1.6%
2013 Value $9.04B $9.77B $13.2B $9.19B
2013 Percent 12% 1.7% 2.2% 1.6%
2012 Value $7.37B $8.9B $12.9B $7.96B
2012 Percent 10% 1.5% 2.2% 1.4%
2011 Value $6.76B $8.31B $11.9B $6.64B
2011 Percent 10% 1.6% 2.2% 1.2%
Table 5.5 gives highlights of US, global, and European electrical

transformers and control boards imports and exports. US import
figures from 2014 indicate Portugal has .12% of the US market, a
value of $17M. Within electrical products, Portugal held .27% of the
global market, an .87% European market share in 2014, and a value
of $246M. In 2014, Portugal exported $31.2M worth of electrical
control boards to the US, the 12th largest European exporter of
this product to the US market. Globally, Europe held the largest
share of the market for these products in 2014. Portugal exported
$416M, a share of .76% globally and 1.7% within Europe. As with the
findings in ceramics, if large Portuguese companies are not already
dominant in exporting electrical transformers and control boards,
a highly lucrative and growing market exists in the US where these
products are in demand.

• 101
Table 5.5 – 2014 Markets for Electrical Transformers and
Control Boards Products
Top 5 US Top 5 Global Top 5 Global

Producers Exporters Exporters (within Europe)
China (40%) China (35%) Germany (29%)

Mexico (17%) Japan (5.4%) Italy (8.6%)
Electrical Transformers Japan (6.6%) US (5.4%) France (5.7%)
Germany (4%) Mexico (3.1%) Netherlands (5.6%)
Philippines (3.4%) Other Asia (3%) UK (5.1%)
Mexico (39%) China (12%) Germany (39%)

China (14%) US (10%) France (7.3%)
Electrical Control Boards Germany (9.2%) Mexico (8.3%) Czech Republic (5.6%)
Canada (6.5%) South Korea (3.4%) Hungary (5%)
Japan (6.3%) Malaysia (2.3%) Italy (4.6%)
5.2d: PVC Subsector Demand

The last subsector for exploration in this section is PVC, and this
subsector falls within the plastics and rubbers sector. Plastics and
rubbers is the seventh largest US import sector and the sixth largest
export sector for Portugal. Though there are a handful of products
in this sector that do not fall within the PVC (construction materials)
subsector, it is difficult to isolate these non-construction product
categories — such as rubber tires, rubber apparel, rubber, synthetic
rubber petroleum resins, etc. — from the subsector. This section,
therefore, gives full information for the plastics and rubbers sector
while making the caveat that not all product categories within the
subsector are construction materials.
The top PVC construction products in this subsector for 2014 were:
1. Ethylene polymers
2. Raw plastic sheeting
3. Polyacetals
4. Other Plastic Sheeting
5. Plastic pipes.

Because the PVC subsector is relatively small compared to the
entire plastics and rubbers sector, the report considers high export
levels cut off at 2%, similar to the ceramics subsector. All the
above products are imported into the US at high levels. Two of
these highly imported product categories have been included in
the report’s assessment: plastic pipes and other plastic sheeting.
From 2011 to 2014, there was one change in US imports within this
subsector; in 2012, raw plastic sheeting overtook ethylene polymers
as the top product category within the PVC subsector, but by 2013,
this one-year anomaly was reversed.
Table 5.6 below shows the import values and shares for the plastics
and rubbers sector and product categories of plastic pipes, other
plastic sheeting, polyvinyl chloride (PVC), and polyvinyl alcohol
(PVA). Sector demand information is given in the table – as opposed
to subsector information – for reasons identified above, and
plastic pipes and other plastic sheeting are included due to their
assessment in this report. The last two product categories of PVC
and PVA – used by many American construction distributors and
retailers interviewed for the report – are included because they are
related products and ones that Portugal may have a competitive
advantage in supplying US demand. From 2014 to 2011, and the
table reveals interesting findings, such as:
»» US plastics and rubbers imports have been growing; however,

2014 saw a stall in growth, and 2015 numbers indicate a 1.7%
decline in US imports (Comtrade 2016).
»» Conversely, plastic pipes imports have consistently grown at a
steady and predictable pace, although this product category also
declined in 2015 by 2.6% (Comtrade 2016).
»» Other plastic sheeting has seen a slower growth in US imports
than plastic pipes, albeit consistent, but following the sector
trend, this product category has also seen a decline in US imports
– 8% since 2014.
»» The PVC product category, after a two-year decline, is struggling
to return to its 2011 US import level.
»» The PVA product category has been steadily increasing, and the
report argues this can be linked to the decline in PVC import
demand. Several US construction companies said they were not
buying PVC, but instead buying mostly PVA or other vinyl products;
there are a health and safety concerns with the chlorine molecule
added to PVC.54 These companies, however, said they were not
interested in PVA imports; they are buying domestic PVA. As PVC
use declines and other vinyl products like PVA become more
common in the US industry, domestic PVA demand may continue
to grow and so too may import demand for PVA.
54 PVC Pipes, a Brussels-based interest group, established itself to dispel against such
perceptions, and SMEs in the PVC subsector may benefit by membership, promotional
resources, and having through products tested and certified through affiliated testing
institutes.

• 103
Table 5.6 – US Plastics and Rubbers Sector and Related
Product Categories Demand Levels (2014-2011)
Plastics and Plastic Other Plastic

Rubbers Pipes Sheeting PVC PVA
2014 Value $75.3B $2.01B $2.18B $1.02B $316M
2014 Percent 3.4% 2.7% 2.9% 1.4% .42%
2013 Value $75.3B $1.94B $2.07B $984M $292M
2013 Percent 3.5% 2.6% 2.8% 1.3% .4%
2012 Value $71.9B $1.63B $1.94B $998M $273M
2012 Percent 3.4% 2.3% 2.7% 1.4% .38%
2011 Value $68.8B $1.39B $1.83B $1.03B $247M
2011 Percent 3.3% 2% 2.7% 1.5% .36%
Because PVA is one of the few product categories in this sector

and subsector experiencing continual growth, the report would
like to suggest Portuguese SMEs in this subsector consider this
product category in developing sustainable export strategies for
the US market. The top five countries importing PVA to the US for
2014 were Germany (29%), Other Asia (16%), Canada (14%), Japan
(12%), and China (8%). The top five countries for global PVA in 2014
were the US (19%), Japan (9%), Other Asia (6.5%), China (6%), and
Singapore (2.5%), and within Europe the top five PVA exporters
are Germany (48%), Belgium-Luxemburg (11%), the Netherlands
(9.3%), the UK (7.1%), and Italy (6.4%). Portugal exported $8.77M in
PVA products in 2014 (.35% global market share). SMEs may be
well advised to explore opportunities for export development and
growth in PVA to diversify US market opportunities.
Assessment of US Construction Materials Demand

The results of this analysis are encouraging, as the majority of the
subsector and product category analyses continue to confirm the
previous sections’ recommendations. Hardware and metalware
subsectors experience similar spikes that are consistent throughout
the metals sector, while also experiencing slow and steady growth.
But the product categories assessed in this report do not appear to
be affected by falling iron / steel commodity prices, restrictions on
US imports (quotas, tariffs), or subject to any pending international
disputes. The advice remains to exercise caution, continue to
monitor EU/US cooperation on this matter, and build exports with

existing trade partners while establishing US relationships. Iron
stovetops seem the most promising; with a strategic marketing
campaign and the establishment of relationships, Portugal has
great opportunity to grow its US imports. Across the board in metal,
it appears US supply is just as strong as demand, and in some cases,
demand may outpace supply – a good area to develop exports.
Within ceramics, demand is not as high in the US as other countries;

however, value from US unglazed ceramics imports remains strong
and increasing, but this is not the case for glazed ceramics or
roofing tiles. The report highlighted low demand, perhaps linked
to consumer, owner, or designer preference; it also pointed out
increasing desertification across the western half and southwest
US. In the interim, the report suggested Portuguese SMEs explore
export opportunities for the US market in other ceramics product
categories, such as bathroom ceramics and ceramic bricks.
Demand for electrical products in the US is strong, and in the

case of light fixtures, demand may even be shifting to imports
over domestic production, particularly as the US continues to rely
on Chinese imports. An industry expert indicated where the US
construction industry is more likely to rely on Chinese imports.
“The question is: do I need 400 of something or 2, and how quickly
do I need it. If I have bigger supply needs, I could see going with
something cheap if it didn’t need to last long.”55 In other electrical
products, a range of issues could be responsible for price increases
but no corresponding increase in import share, including currency,
quality perceptions, and associated import costs. Both suggested
product categories – electrical transformers and control boards –
show incredible opportunities for growth, and if large Portuguese
companies are not already exporting these products, including
them in a short and long-term export development plan not
only supports SME growth, but also Portugal’s shift to advanced
manufacturing.
Finally, demand for PVC products in the US is generally declining.

This may be linked to a health and safety concern, and the report
suggested SMEs look into importing PVA products. If Portuguese
SMEs moved on this information fairly quickly, it could also be a
way for Portugal to outcompete some of the other industrial export
competitors in Europe, such as the Czech Republic, Romania, and
Estonia. As one retailer said: “We have numerous suppliers in all
aspects of what we sell; there’s not just one supplier for one product
or one company. And we go to multiple suppliers to see who is the
most competitive.”56 The report emphasizes that timing is key in
the US market, and the section now turns to analyzing US trends as
part of an insider’s perspective of how to supply demand effectively
in the US market.

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5.3 Trends Affecting Supply and Demand
This section focuses on giving Portuguese SMEs an idea of how to

supply demand in the US market by examining trends that affect
supply and demand. Trends in the US, in general, are much stronger
market forces compared to Europe. For example, while Europe
tends to rely on tradition and craftsmanship, the US embraces
trends, and as construction projects are supplied on a project-
by-project basis, trends can play even more of a role. Within the
construction materials industry trends are less subject to fashion
and more utility-based. The biggest trends driving US construction
demand would likely be technology and quality improvements. A
retailer clarified: “A lot of it is demand for something new, someone
is asking for something we don’t have, or we find a product that’s
innovative, meets our needs, and is cheaper. We’ll order that then,
and [the supplier] will give us a deal on a truckload, bulk quantity.”57
These also reflect on US infrastructure, housing, and commercial
business developments.
Within technology, the strongest trend is towards energy efficiency,

sustainability, and ecology in product certifications. In interviews,
several trade association and industry representatives were asked
how strongly they felt the “green” movement was driving the future
of construction. Several retailers and distributors replied that they
might not be in the best position to give a definitive response,
but there was the impression that while numerous associations,
organizations, and councils had been established by the
government to push forward green building initiatives with owners
and designers, the reality with importers, wholesalers, distributors,
and retailers (suppliers) was distinctly different. A designer
working for a large industry leading contractor, who felt he was in
a position to comment, suggested that: “the industry is trying to
keep up. It’s the first thing that comes to mind when we do a new
project, the impact.”58 The government, owners, and designers may
push the green revolution, but suppliers’ main concern remains
quality; if green products can provide the same level of quality
as conventional, then they will lead future trends. If not, they will
continue to be difficult products to market.
The US is facing what the American Society for Civil Engineers

has called an “infrastructure crisis”, calling for a $3.6 trillion federal
investment to repair the US’s energy, transport, sanitary, education,
and waterway infrastructure (2013). As the US, like most other
countries, continues to recover from the 2008 recession and
sluggish trade growth in subsequent years, this report expects
federal construction spending to increase in response to poor
domestic infrastructure. This is also why one industry expert is
fighting for changes to the Buy American provision of the ARRA.59
As reinvestment projects have progressed in the construction
sector, contractors are finding it increasing difficult to meet
federal contract terms, particularly if foreign supply materials

are prohibited. These measure have led to delayed initiation
and completion of much-needed infrastructure improvements.
However, one contractor argued that Buy American improves
contractors’ ability to map project delays and completion. “Buy
American doesn’t constrain us; it works for us. It’s easier for us to
track materials when it comes from California versus from overseas.
When know when a product will arrive and can keep working
based on this information.”60 Therefore, the quality improvement
trend overlaps with the trending preferences for domestic, over
imported, construction materials as a matter of economic policy
and practicality.
This is not the only factor shaping the quality improvement trend;
dialectical factors influence industry trends, as well as competition.
For example, one retailer revealed that: “Its availability, which drives
the market price; if Chinese prices goes up, we go to domestic steel
or Turkish. If Chinese prices go down, we go with them.”61 Several
industry experts interviewed indicated that they have stopped
importing or buying Chinese construction materials, especially
for advanced manufacturing products (ie: beyond basic hardware
like screws and nails). One retailer mentioned sanitary, health, and
consumer issues with Chinese building products; another said
that too many instances of Chinese exporters flooding the market
has turned American preferences away from Chinese materials,
which established a firm hold during the Dotcom building bubble.
Another specialist confided that his company is owned by a top
Chinese construction firm, and they are the US face for the Chinese
building association. Almost every industry specialist interviewed
was open to European construction materials because of quality
reputation, and the report argues that Portuguese SMEs have an
existing and well-established competitive advantage over exporters
that may currently outcompete them in the US and global markets.
Moving on to more specific trends, the US housing market suffered

considerable losses as a result of the 2008 financial crisis; however,
building is rebounding, especially when compared to European
countries. It will be of no surprise to Portuguese construction
materials exporters that trends in housing and commercial building
projects are linked to employment. The retailers, distributors,
wholesalers, importers, and trade associations selected for
interviews have one trending feature in common: their cities and /
or states are experiencing strong and consistent job growth. These
states where employment has and continues to grow are, from west
to east:
»» Washington »» Colorado
»» California »» Texas
»» Arizona »» Florida
»» Utah »» New York.

• 107
The report advises Portuguese SMEs pay particular attention to
these states and job growth rates when developing their export
development / growth strategies.
For companies more engaged in the housing supply side of

construction materials, the markets in Arizona, Utah, and Colorado
are perhaps the strongest, due to a higher demand for housing and
lower supply. The same could be said for Nevada; however, due to
environmental changes (desertification and decreasing access to
the water table shared with California), Nevada’s market may grow
slower. “If we didn’t have a good water year, we won’t have a good
residential market because you need water to set up new homes.”62
Overall, the report would classify the US housing market as volatile.
This market continues to recover from the 2008 crisis, which was
precipitated by an outstanding number of sub-prime mortgages.
Property lending in the US market, at the individual or corporate
level, is still below what it was prior to the financial crisis.
Relatedly, the US is not unlike most European countries in

that the financial crisis has impacted individuals’ ability to own
property, though the US continues to have a higher percentage of
its population in home ownership than Europe. In 2015(i), it was
estimated by the National Multifamily Housing Council (NMHC) that
37% of the US population lived in rental accommodation; 74% of
these individuals are under the age of 44-years-old (NMHC 2015ii).
Almost 45% of American residents live in single-family dwellings,
and these trends should help Portuguese SMEs better understand
the trends that shape demand in the US market (NMHC 2015).
While the US housing market has not yet recovered from the 2008
crisis, rental housing demand is surging (JCHS 2013).
The Joint Center for Housing Studies of Harvard University (JCHS)

points out that this widespread rental market urgency has an
alarming feature – affordability of rental housing is declining (2013).
With demand for rental housing increasing, prices are as well,
producing pressure on the construction industry to rapidly build
new rental accommodation. The JCHS has called on the federal
government to build cheaper and government-subsidized rental
accommodation, which will certainly impact imported materials.
Because the housing market accounts for a majority of construction
spending, Portuguese SMEs are also advised to monitor US housing
developments, building permits, home sales, foreclosure rates,
unsold home inventories, mortgage rates, household incomes, and
employment data.
Shifting to the commercial or industrial or commercial building

market, these trends reflect factors influencing office and retail,
hospital, and school construction projects. Supply for most schools
and some hospitals will be conditioned by the Buy American
provision; unlike most European countries, the majority of hospitals
in the US are privately funded. Office and retail construction projects
are similarly privately financed, and these projects are opportunities
for Portuguese SMEs to build their brands and develop or enhance

their export growth. The report would classify this market as sensitive
(as opposed to the volatile classification of the housing market
above). Industrial building in the US has been in decline since the
early 1980’s. As the US continues to outsource industrial production
and utilize global supply chains for manufacturing, this report
expects industrial building to continue to decline.63 Retail and office
spaces were heavily expanded in the 2000-era Dotcom building
bubble, and many of these developments remain empty. However,
changes in agricultural product and marijuana legislation could
transform this declining trend.
Increasing desertification in the US – some naturally occurring,

some exacerbated by unsustainable large-scale agribusiness and
declining biodiversity, particularly in the western, midwestern, and
southern (westward from Texas) states – is affecting the construction
industry’s adaptability in its water needs for new developments
(UNCCD 2012). The river basins, major lakes, and underground
aquafers that supply water to the western half of the US are
declining at a rate described as somewhere between a 500-year
crisis and a 16-year catastrophe (Vice 2016; Lustgarten, Kirchner,
and Zamora 2015; Sneed, Brandt, and Solt 2013). Population growth
and density in these high-growth regions, such as Texas, Colorado,
Utah, Nevada, Arizona, and California, also play a factor. The effect of
desertification on the construction materials industry ranges from a
slowdown in building to an influx of indoor agriculture with diverse
new construction supply needs to changes in building materials –
such as a possible shift from roofing shingles to ceramic tiles.
While desertification’s full impact on the construction industry

has not yet manifest, a national agricultural trade association
spokeswoman suggested that many American construction
companies are not prepared to respond to the industry’s changing
needs.64 Portugal’s climate bears similarities to these diverse
regions, and offering adaptable solutions in advance of peak impact
could have a transformative effect on SMEs’ US market access and
growth. The report advises SMEs keep pace with US residential and
non-residential construction spending, office vacancy rates, urban
sprawl or development, and the Architectural Billing Index to stay
on top of these related trends and their effect on US construction
materials demand.
Assessment of US Trends
Before continuing, it is worth pausing to emphasize the
recommendations made so far that will help SMEs keep pace of US
trends. The importance of keeping pace cannot be overstated; in
the US, succeeding at any level of business requires an enormous
amount of luck – or being at the right place at the right time. This
means being ahead of the curve when it comes to US trends, but
trends change. By the time Portuguese SMEs digest this report and
begin to form an action plan for sustainable export development,
some of these trends may have less potency.

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For example, a wholesaler interviewed stated that: “iron pipe, PVC,
fittings all that stuff is off at the moment… [Exporters and importers]
are trying to keep [these products] off the market to try to keep
the price artificial.” Following the US 2016 presidential election,
Brexit, developments in yuan, dollar, pound, and Euro, and various
other factors, metal and PVC markets could fluctuate, and prices
could become more realistic. Currently trending preferences for
American-made products could also change based on the outcome
of the 2016 US presidential election, but as one industry expert
said: “no one knows what the new administration’s trade policy will
be.”65 There are always unforeseen issues that affect supply lines,
everything from acts of God to freight disruptions. The only way
to get ahead in the US market is to monitor industry, economic,
and political trends, in the US and globally, and this is a difficult
task for SMEs without industry contacts or existing relationships.
In concluding this section, the report summarizes what is known
about US supply and advises on creating demand for Portuguese
construction materials.
Starting with exports, this report advises a multifaceted strategy,

and not all these elements are appropriate for all SMEs, as the range
of business sizes, needs, and products is vast. One facet would be
to build on existing US exports where the report has advised and
exercising caution in more volatile subsectors, such as ceramics,
metalware, and PVC. A second facet that should be implemented
among all SMEs currently exporting to the US is to improve
import consistency. Third, the report suggests that building brand
recognition is not a strategy for the US market alone and advises
enhancing product reputation with existing trading partners, as
well as establishing Portuguese product reputation in new markets.
A 2016 report by the International Trade Administration (US, ITA)
projected the top ten overall construction materials markets are,
respectively: Canada, Mexico, China, Japan, the UK, Saudi Arabia,
Germany, Australia, Hong Kong, and South Korea.
The top markets for lighting products for up to year 2018 are
expected to be: Canada, Mexico, China, South Korea, Saudi Arabia,
Germany, Japan, the UK, Taiwan, and the Netherlands (ITA 2016).
For plumbing products, Portuguese SMEs should also seek to
expand in Mexico, Canada, Saudi Arabia, the United Arab Emirates,
Taiwan, the UK, Venezuela, South Korea, Australia, and South
Africa (ITA 2016). Advertising ratings on English-language websites
is an effective way to reach US owners, designers, and importers
who research foreign products without exporters’ knowledge.
Adding testimonials and obtaining product approval are other
ways American companies, distributors, and importers verify
product quality. Finally, the report suggests that Portuguese SMEs
diversify exports by initiating or enhancing exports in other product
categories, such as those explored in Section 5.2. One US wholesaler
with over 23 US branches and 60 years of operations contributed
that diversifying products is an effective strategy when their primary
products are not experiencing high demand and said of the general
US construction materials right now that: “everyone is sort of in a

holding pattern right now” because of the upcoming presidential
election and issues with China.66
One of the most effective ways of improving US imports is

identifying supply gaps prior to their emergence and being able
to quickly fill supply lines with foreign products. “There’s a lot
of different things that can affect supply, transportation, union
strikes, shortage of raw materials; it all depends on dynamics, and
therefore, suppliers, distributors, importers need to be quick to
respond to our needs because our customers won’t understand
why we can’t get the job done on time.”67 Though outside the
scope of this report, Portuguese cork flooring and wall coverings are
cheap, have high technological utility, are a natural product, and
offer excellent thermal and acoustic insulation. Cork shelters, like
those designed by Portuguese architect David Mares in 2009, could
fill supply needs the US has with its homeless or at-risk veteran
population (AICEP 2013). The Homes for Vets, Homes for Troops,
Homes for Heroes, Operation Finally Home, Wounded Warriors, and
Operation Homefront are a handful of projects and organizations
looking for low-cost supply solutions to growing demand issues.
Beyond building exports, SMEs are best advised to build

relationships in the US; this was reiterated in almost all interviews
conducted for this research. Another facet of sustainable
export development strategy is to seek collaboration with other
Portuguese SMEs in the construction materials industry. Not only
does this recommendation improve several issues highlighted in
Sections 2 and 3, but it also is an effective way to address diverse
supply needs. The majority of companies interviewed did not
specialize in one or two subsectors, with limited exception to
ceramics. With collaboration, Portuguese SMEs can look to reach a
wider array of US contractors, importers, distributors, and retailers;
costs can be reduced in shipping, coordinating the establishment of
trade offices, and even relationship building missions.
Additionally, some retailers were not interested in meeting

individual foreign supply companies; coordinated business-to-
business meetings with diverse Portuguese product suppliers — like
those organized by the report parties, trade shows, conferences, and
association events — are likely to yield more productive results.
[We use] a variety of sources, industry contacts, online / phone

search, face-to-face meeting, visiting a brick and mortar shop,
searching industry reputation / ratings online, word of mouth
referrals when making foreign purchasing decisions. Trade shows
are a good place to do assessments; when I went to the Home
Builders show in Las Vegas, there were loads of Chinese [industry
representatives] who we worked with.68
Additionally, this report has reiterated the importance of

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Portuguese SMEs organizing and establishing a case for increasing
financial and trade-related resources with local, national,
and regional (EU) authorities. Industry collaboration is likely
to strengthen the case, demonstrating upward mobility and
assurances necessary to lobby those with resources to enhance
funding for Portuguese SMEs. These strategies are further
elaborated in the report’s conclusion, Sections 6.2a and 6.2b.
5.4 Understanding How the Competition Responds to Trends
Becoming a top US producer requires strategy development and

enhancements, some of which are outside the scope of this report.
Consistent sustainable export development that is supported –
financially and with other resources – by the European, Portuguese,
and local business and construction community, such as AEP and
the Agência para o Investimento e Comércio Externo de Portugal
(AICEP), puts US market access and growth opportunities within
the grasp of Portuguese SMEs. Before concluding, this section will
help SMEs understand how the competition responds to US market
trends and why this gives them the competitive edge that facilitates
their success.
Some of the top US construction and building companies (in

no particular order) that Portuguese SMEs may be interested in
researching are:
»» Ferguson Enterprises, Inc (hardware, ceramics, electrical, PVC, and

metalware subsector products)
–– $13B in revenue, 1,400+ US locations, and 22,000 employees

–– Largest distributor of commercial and residential plumbing
supplies, and pipes, valves, and fittings (PVF) in the US
–– Second largest distributor of kitchen and bathroom products
–– Third largest distributor of industrial and HVAC/R products
»» Clark Construction (general contractor)
–– Over 100 years in operation, 1,400 awards, including from the

most prominent trade association, Associated General Contracts
(see below), 4,200 US employees working on public and private
sector projects of various scope and size
–– Responsible for large (re)development projects or DC public
transport, museums, residential, and corporate buildings and
nation-wide hospitals, detention facilities, and conference
centers
»» Plaza Construction (general contractor)
–– Since 1986, one of the country’s leading contractors –

responsible for many of New York’s high rises – with regional
offices in DC, Miami, and Los Angeles, headquartered in New
York
–– Part of China State Construction Engineering Corporation, China
Construction America

Top US trade associations (no particular order) for Portuguese SMEs’
networking are:
»» Associated General Contractors of America (AGC)
–– Represents more than 26,000 firms, including over 6,500

general contractors, 9,000 specialty-contracting firms, and
10,500 service providers and suppliers
–– A nationwide network of chapters in most major US cities
–– Leading the movement to loosen supplier origin regulations in
the Buy American provision of the ARRA
»» The Construction Owners of America (COOA)
–– For more than 20 years, a nation-wide organization of public

and private facilities and improvement project owners
–– A forum for owners and designers that reflects collaborative
industry knowledge and vast source of industry resources,
events, and owners’ perspectives
»» Leading Builders of America (LBA)
–– Interest group established in 2009 that represents many of the

largest US homebuilding associations
–– In 2015, members sold over 155,000 new homes and stimulated
more than $60B in national revenue
»» World Green Building Council
–– Network of over 100 countries’ national green building councils

that organize to support industry leaders’ sustainability efforts
and transformations
–– Regional organizations in Africa, the Americas, the Asia Pacific,
Europe, and the Middle East and North Africa (MENA) region
sponsor bi-monthly events across regions
»» National Association of Home Builders (NAHB)
–– Federation of over 700 state and local associations, 140,000

members, founded in 1940s to be the voice of America’s
housing industry
–– Sponsors many of the top trade shows listed below, provides
members with business development resources, and member
of the International Housing Association
»» Electrical subsector associations
–– American Lighting Association

–– National Electrical Contractors Association
»» Metalware subsector associations
–– American Institute of Steel Construction

–– American Iron and Steel Institute
–– Cast Iron Soil Pipe Institute (for iron pipes and iron pipe fittings)
–– Association for Home Appliance Manufacturers (for iron
stovetops and product categories in hardware subsector)
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»» PVC subsector associations
–– American Water Works Association
–– National Rural Water Association
–– Plumbing-Heating-Cooling Contractors National Association
–– (Ceramics) Roofing subsector associations
–– National Roofing Subcontractors Association
–– Tile Roofing Institute
»» Materials and Standards associations
–– American National Standards Institute

–– American Society for Testing and Materials
–– Construction Specifications Institute
–– International Organization for Standardization
Some of the top US trade shows that Portuguese companies may

be interested in attending are:
»» Conexpo – Con/AGG, March 7-11, 2017 in Las Vegas, Nevada, a

tri-decade event that hosts more than 2,400 exhibitors from the
construction industry, including US government representatives,
featuring exhibits, education sessions, industry support sessions,
and specific information for international visitors.
»» Build Expo – various dates in US regions for 2016 and 2017,
including those in Texas, New Jersey, and California. A business-
to-business (B2B) trade show with 20 expert seminars and
workshops, product exhibitions, and opportunities to meet with
decision-makers and buyers.
»» NAHB International Builders’ Show, January 10-12, 2017 in Orlando,
Florida, America’s largest residential construction industry trade
show for manufacturers and suppliers of home construction
products and services attended by over 50,000 professional
tradespeople; web information available in Portuguese.
»» Brevard Home and Garden Expo, summer 2016, with over 65
exhibitors with products for kitchens, baths, home remodeling,
home repair, and new home construction; a smaller, regional
tradeshow aimed at introducing new products, increasing brand
awareness, developing sales leads, building relationships, and
addressing competitiveness among buyers and decision-makers.
»» Remodeling Show / Deck Expo / JLC Live Residential Construction
Show, October 2016 in Baltimore, Maryland, a gathering of
hundreds of the world’s top residential building and remodeling
industry specialists with over 300 products; provides business
education and networking / relationship-building opportunities.
»» International Roofing Expo, March 1-3, 2017, in Las Vegas, Nevada,
a trade source for relationship building, product exhibition,
and business development and growth education for owners,
designers, distributors, suppliers, and industry specialists.
Several retailers and distributors interviewed said they attended

trade shows, including some of the above. Rather than being a
forum for selling / buying products, trade shows are opportunities
to build relationships, particularly off the show floor at social

functions when there is less pressure to buy and an environment for
networking and face-to-face, trust-building conversations.69
Some of the industry’s leading publications include:
»» BUILDER Online, online source for industry and business news,

publication source for many smaller industry publications, such
as Journal of Light Construction and Tools of the Trade; news
database for US housing data, regulation and policy, materials
prices, and a directory of products.
»» Building Design and Construction, magazine and online source
for building sector news, top contractors, and sector-specific news;
direct trend reports from owners, designers, and contractors and
case study resources, whitepapers, and codes and standards
guidance.
»» Constructor, magazine and online source produced by AGC
includes web exclusives, advertising information, an online
marketplace, and archive.
»» Construction Today, magazine for North American trends,
business development opportunity news, materials costs updates
and policy changes, and direct best practices information from
the US’ most successful construction companies.
»» Electrical subsector publications
–– Electrical Construction and Maintenance

–– Electrical Contractor magazine
»» PVC subsector publication
–– Plumbing and Mechanical magazine
»» (Ceramics) Roofing subsector publications
–– Roofing Contractor magazine

–– Architectural Roofing and Waterproofing magazine
»» News sites and blogs featuring the top sources for up-to-date
developments in the US construction industry
–– AEC Business, strategic insight of construction business owners

–– Construction Data Company, latest research on US commercial
construction industry
–– Construction Drive, industry pricing70 and in-depth trend
analysis
–– Engineering News-Record, suppliers’ source for data, analysis,
and news
70 The report aimed to provide detailed information on industry pricing models for
subsector products; however, no industry expert interviewed could provide this information.
Some of the subsector products are commodities, and information is publicly available but
changes frequently. The majority of individuals either said they were unable to give this
information or price was driven by ever-changing supply, demand, quality, availability, and
a whole range of other factors that were difficult to pin down. See the end of Interview 6,
Appendix 4 for example.

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Understanding of how competition responds to US trends is
essential in establishing a competitive advantage in the US. As
highlighted in Section 5.3, one of the most effective mechanisms
for being competitive in supplying US demand is to respond to
supply gaps or issues that have not yet become critical. The US’
infrastructure crisis is an example of an issue that has reached
a critical stage; supply issues presented in this report that have
not yet reached a critical stage would be housing for veterans/
homeless, new construction for an growing rental housing market,
and changes in agricultural production. A related and ongoing
crisis that the report has not yet focused on is the iron / steel supply
issue, which appears to affect almost all levels of the construction
materials industry, including exporters, importers, distributors,
wholesalers, and retailers.
In the course of preparing this report, there have been many

developments in iron / steel trade. On May 24, 2016, US steel
manufacturers demonstrated to the US International Trade
Commission (ITC) the extent of market distortion, domestic job loss,
raw material product loss, and overall injury due to cold-rolled steel
imports from Korea, India, China, Brazil, the Netherlands, Russia,
and the UK (Inside US Trade 2016i). The G7 threatened action over
global steel overcapacity (Inside US Trade 2016iii), and the ITC filed
a petition to ban “steel imports from China’s forty largest producers
due to illegal competition via theft of trade secrets, price fixing and
false designation of origin” (Inside US Trade 2016ii; Bridges 2016i).
Brazil was cleared of steel bar dumping allegations by the US, and
final determinations and injury investigations on steel pipes and
cold-rolled steel are pending, following the above developments,
against China, Japan, the Oman, Pakistan, the UAE, and Vietnam
(Sandler, Travis & Rosenberg Trade Report 2016i). Investigation and
action is pending on many more iron / steel products, including
iron pipes and iron pipe fittings assessed in this report, from Brazil,
Italy, Taiwan, China, South Korea, Japan, Mexico, India, South Africa,
Germany, Spain, Belgium, and France. “It’s very competitive, you
have to really know your business, contacts, and relationships, at
a much different level than other products. …we’ll sell 100 feet of
iron pipe, but our competitors sell 1000 feet. You have no idea how
much it is, where it is.”71 The results range from tensions in other
export sector trade to allegations of American overprotection,
protectionism, and unfair trade policy (US CBP 2015; Bridges
2016ii; Sandler, Travis & Rosenberg Trade Report 2016ii, 2016iii,
2016iv). China, in particular, has argued the action by the US Steel
Corporation is: “extraordinarily broad, indeed unprecedented” with
337 cases pending (Inside US Trade 2016iv).
In interviews with trade associations, iron and steel repeatedly

presented themselves as problematic products for US companies
importing, distributing, or supplying contractors with foreign or
domestic steel.
Right now, we are buying steel pipe in amounts of $2M to $3M

a year; the majority of it’s domestic made. There may be some

Chinese stuff in there, but it’s not where we go to do business
usually… [I’d possibly be interested in Portuguese iron / steel
products, but] here’s the situation. We have long standing
relationships with domestic manufacturing, and so why would
I look to import or buy foreign materials when the availability,
service, and relationships already exist and are better in the US?
It just wouldn’t make sense. I would sit down and talk with them,
but I can’t say that anything is going to come out of it.72
All industry specialists interviewed were unable to provide opinions

for the future of iron / steel materials in the US and international
market. “There is very little competition. It’s literally a commodity.
The price is going down on all our products, both in exports and
imports.”73 The recommendations in this report around metalware
products have cautioned against risk taking in Portuguese
SMEs’ export development and growth strategy, and the above
paragraphs serve as a strong case study against current US market
entry or expansion for Portuguese metalware products or any
products related to iron / steel. The simple fact is that oversupply
and US and EU trade policies make these markets extremely
volatile and present problematic market access barriers for SMEs.
However, one retailer interviewed was careful to mention that the
reverse can also be true in the US market: “Shortage of materials
can be an issue; if the market outpaces the manufacturing, that’s a
related issue.”74
Success in supplying US construction demand requires keeping

pace with trends, news, developments, and complex relationships
within the US, Europe, and the international community. One
industry expert interviewed mentioned that the US construction
market is vastly different than it was 30 years ago.75 While certain
supply lines are cemented in long-term, productive relationships
between exporters and importers / contractors, the global economy
demands that competition become more open and transparent.
This industry expert did not see the US construction market
becoming more exclusive – more domestic product demand than
imported – although US construction manufacturers, particularly
steel workers, are highly protected. They are also highly unionized,
and one industry expert suggested that union strikes have and can
continue to cause supply problems that make imported iron / steel
products essential.76
Iron and steel in US is more of special case than indicator – the

industry has been protected for so long and been declining for
three decades now. The manufacturing industry is a powerful
force in the advocacy community to put it delicately and so is the
steel workers’ union. …both imports and exports are declining,
and no one knows where it is going to end up… The industry will

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eventually settle out and reconfigure. You’ve got two special cases
that will determine how this plays out: iron and steel products
and China in general (our trade deficit, Congress’ view on China,
and currency speculation). It really boils down to the blurred line
about their economic status, whether they are a market and non-
market economy. They are meeting to discuss this and trying to
move forward, but it basically means that we will continue to face
similar issues in the industry and supply chain.77
The G20’s trade ministers have promised to take “effective steps”

on: “excess capacity in steel and other industries”, but there is
no word on what those steps will be (Bridges 2016). The EU and
China have set up a “platform” for discussing how to cope with
global oversupply, but it is unlikely that the US market for these
subsector products will change within the next years or possibly
decade (Bridges 2016iv). The report advises that SMEs look to do
the same as Chinese competitors will be doing, which is to explore
developing markets, particularly in Africa, where steel imports are
less subject to tariffs and political ramifications. Portuguese SMEs
would be well advised to continue building relationships with their
African partners, such as those in Angola, Uganda, and Ghana,
rather than target the US market, until the issues highlighted above
regarding China are more settled.
5.5 Conclusion
This section aimed to give Portuguese SMEs an insider’s perspective

of the US construction materials industry. It began by looking
at US construction materials demand by subsector. This macro
focus allowed the report to draw in data from interviews and the
competition analyses from Sections 2 and 3 to advance a much
wider perspective about the likelihood of success in developing or
growing sector exports in the US market. Global trade is currently in
a precarious position; Section 1 gave a positive outlook about 2017
to 2018 global trade growth. In the time since the report began,
increasing protectionism in G20 markets, Brexit, and commodity
and currency fluctuations puts Portuguese SMEs in a difficult
place. WTO Director-General Roberto Azevêdo believes 2016 will
be the fifth consecutive year with sluggish global trade growth, the
“weakest sustained level of trade growth for 30 years” (WTO 2016i).
In consideration, the report advised that the safest markets are in
electrical and hardware; some ceramics and metalware products
demonstrate opportunities for Portuguese export development and
growth, but these markets are not without risk. PVC and iron / steel
products, such as iron pipes and cold-rolled steel, pose the most
volatile markets for SMEs.
The crux of the analysis from Section 5.2 highlights the importance
of competitive prices, good availability, export volume and
consistency, product quality and service, and relationships and
industry connections. “We need people nearby to supply our
needs in the case of things going wrong…. We try to use local or US
77 Ibid.

products only because we need such a high level of service.”78 At
this point in the report, it appears as if this would be best facilitated
by Portuguese SMEs investing in an American presence for this
export business, whether in brick and mortar or representative
form. Even if SMEs rely on trade shows, it is unlikely that purchasing
decisions will happen on the show floor – though several trade
shows advertise this. It is more likely that a representative would
need to be present in the US to assure product certification,
consistent communication, and networking with contractors,
subcontractors, and distributors.
Continuing to give an insider’s perspective, Section 5.3 examined

trends that affect US construction materials supply and demand,
including US infrastructure, housing, commercial, and agricultural
needs, as well as perceptions and demand for Chinese suppliers
that often outcompete the majority of exporters on price and
volume. The analysis examined how Portuguese SMEs could seek to
develop their target market in the US, as markets, supply, demand,
and compliance and regulation vary by state. The most critical
piece of insider information is that to be competitive, Portuguese
SMEs must keep pace with the American and global market for
their products. Developments occur dynamically, changing project
needs, and critical windows of opportunity arise. Should Portuguese
SMEs not have a strong presence in the US market – either
physically or through relationships and contacts – retailers and
contractors prefer to acquire materials locally.
Other essential takeaways from this section’s analysis is that

Portugal can better compete on the US market by developing
or growing exports in top export destinations for their subsector
products and that supplying a diverse range of products can
improve their competition. Similarly, joining together with other
SMEs to increase product diversity and product volume seems to
hold promising results, as US companies look for a broad product
range, from diverse sources, in varied locations (trade shows, existing
relationships, word of mouth, etc). SME collaboration may also
prove essential in gaining additional resources within Portugal or
Europe and help improve performance indicators when lobbying
for enhanced resources. However, there are certain products – and
perhaps even subsectors – where markets, in the US and elsewhere,
are stagnant. In some cases, this is because competition has
become too diverse and led to a condition of global oversupply,
such as with iron / steel products.
Section 5.4 examined how Portugal’s competitors respond to US

trends by presenting top US construction materials destinations,
trade associations, trade shows, and publications. Using these
resources and building relationships, Portugal’s competitors are
able to gain a competitive edge over other foreign suppliers. An
industry expert who has been working in Portugal for a few years,
upon being asked if their working relationship with Portuguese
construction materials firm has affected their US supply purchasing

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habits, said: “not yet, but they are talking to us about it.”79 Being
connected to a wide variety of contractor, subsector, and product-
specific resources helps exporters better prepare to fill US supply
gaps before they present problems. Following the detailed list of
resources, this section attempted to analyze the US and global iron
/ steel product market. Both industry experts’ testimony and the
copious developments as this report was prepared indicate there
is no clear path for the future of these products. It does appear
that the US, China, the UK, and select European countries will lead
future developments in iron / steel trade and that the US domestic
steel industry is fairly protected. For Portuguese SMEs exporting
metal subsector products, the report advises utilizing a similar
tactic as China by looking towards development in Africa.
This concludes the insider’s perspective of the US construction

materials market, supply and demand issues, resources, and cases
where US imports are unlikely to be sustainable strategies for
Portuguese export development and growth. This section’s analysis
also concludes the report on opportunities for SMEs that focused
on competition and demand. The following section provides a
summary of the report and highlights where Portuguese SMEs
have the greatest opportunities to be competitive in the US market
and what challenges mark the path ahead. The conclusion also
provides benchmarking information to enable SMEs to know
where they have accessed the US market, when reassessment
may be necessary, advice for sustainable growth, and signposting
maturation once Portugal becomes a more consistent US
construction materials producer.

Section 6:
Conclusion
6.1: Introduction
This report has analyzed, evaluated, and recommended strategies

for export development and growth in the US construction materials
market. The report’s analysis of internal (US) competition (Section
2) found slow but steady growth across the majority of product
categories, with highly lucrative possibilities for Portuguese SMEs in
hardware (padlocks and other metal fasteners), building ceramics
(glazed and unglazed), electrical (LVPE and light fixtures), and
PVC (plastic pipes and other plastic sheeting) products. Portugal
has performed best in the US with glazed ceramics and electrical
products. Metalware products are a highly uncertain market in the
US, and other metal fasteners, ceramic roofing tiles, and, to a degree,
other plastic sheeting and unglazed ceramics appear volatile markets
for SMEs. However, risk taking within certain product categories could
yield rewards pending industry developments.
The majority of Portugal’s competitors in the US market are within

Europe, and improving their competitiveness within Europe
would also have a positive effect on its World Economic Forum
Competitiveness rating. Outside Europe, Canada, New Zealand,
Brazil, Singapore, Saudi Arabia, Australia, and Turkey are substantial
competitors for Portugal in the US market. Key strategies to improve
internal competitiveness in the US market include:
»» Development of industry-wide, SME collaboration

»» Focusing on short-term goals, such as export consistency,
outcompeting key European competitors, enhancing exports in
other foreign markets, as part of a longer-term strategy on export
volume and increasing product visibility and service
»» Monitoring developments in US and key competitors’ markets
through 2018
»» Development of relationships and building industry contacts and
network presence through a US brick and mortar presence or a
Portuguese representative.
By examining external, global and European competition (Section

3), the report uncovered the top global and European exporters
of construction materials (see pg 54). Portugal holds a significant
portion of the global market for hardware, building ceramics,
and electrical products but not PVC or metalware products.
Within Europe, Portugal exports all subsector products (hardware,
building ceramics, electrical, PVC, and metalware) at significant
levels. Portuguese metalware exports have only recently reached
significant levels in Europe, and this market, whether within
Portugal, Europe, the US, or the world, remains the most precarious
for export development and growth. This section’s objective was
to translate complex “dialectical” relationships that shape global,

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European, and US trade in construction materials. The strategy
recommendations that emerged from this section’s analysis
confirm the findings from Section 2:
»» Build relationships
»» Discern where Portuguese SMEs have advantages in the US
market via trend analysis, trade shows, and publications
»» Enhance exports in other foreign markets as part of a longer-term
strategy to access and grow in the US market.
Section 4 provided general guidance for Portuguese SMEs in

complying with US legal regulations and guidance with particular
focus on labeling and packaging, special requirements, tariffs, and
distribution structure and channels. US distribution research yielded
interesting results. Overwhelmed with foreign suppliers’ cold calls
and a surplus of illegitimate or ill-reputed foreign companies,
importers have become difficult to identify in the US. A potential
partner search would be best directed through a brick and mortar
presence or a representative discussed above. Having a direct
presence in the United States — a presence that could express
Portugal’s interest in import growth and relationship development
— would help SMEs overcome the difficulties associated with
locating importers.
The section also highlighted that hiring business development and

marketing firms or networking with affiliated distributors or trade
associations could boost Portuguese competitiveness in the US
market. An industry expert suggested one way Portuguese SMEs
could be even more competitive when marketing their products in
the US is to work with US and Portuguese marketing consultants.
His company uses in-house US marketing resources to design and
review what Portuguese marketing firms create for distribution. “We
find that they are 50% cheaper than marketing services here, and
that’s one way they can be very competitive.”80
It highlighted how US legislation, such as safety certification

processes – some of which are specific to certain US states or
regions – and Buy American regulations, can affect Portuguese
SMEs’ opportunities for export development and growth. With
US trade associations fighting to change or overturn legislative
provisions, the effect of these potentially trade-distorting policies
on SME development and growth cannot be overstated. SMEs
would be well advised to further investigate which sectors
(transport, home building, infrastructure, commercial development),
subsectors (metal, hardware, etc), and product categories (iron
pipes, fasteners, etc) are most likely to discriminate against foreign
/ Portuguese exports. The report suggests that such an assessment
could be contracted through the report parties utilizing additional
EU funding.
Finally, the report offered an insider’s perspective of competition

and opportunities to supply US constructions materials demand
(Section 5). Assessing metal, ceramics, electrical, and PVC subsector
demand, the report found that, with the exception of electrical
products, US demand is currently in a general state of decline.
Between reduced global trade flows, dumping, protected US
manufacturing, and distaste for certain foreign products Portuguese
SMEs will find it challenging to develop sustainable strategies for US
market development and growth. SMEs must be strategic, selective,
and proactive about growing their export market, and this report
has highlighted many areas for export development and growth.
Trade relationships continue to grow despite contemporary issues
that have affected the construction materials market.
To succeed in the US, SMEs must have:
»» certified, quality products,

»» strong relationships and industry connections,
»» specific target markets (in states or US regions),
»» knowledge of US trends,
»» understanding of how to utilize resources to gain a completive
edge, and
»» collaborative, resourceful short and longer-term strategies.
The simplest way to emphasize the scope and potential for

development and growth in the US market is to compare the GDP
of European countries to specific American states. From largest to
smallest:
»» the UK’s GDP is comparable to California;

»» Italy’s GDP is equivalent to that of Texas;
»» Poland’s is similar to Virginia or Massachusetts’;
»» Portugal’s GDP is most similar to Alabama or South Carolina;
»» Greece’s GDP is between South Carolina and Kentucky’s; and
»» the Czech Republic’s GDP is akin to Oklahoma’s (US Department
of Commerce 2015; IMF 2016).
One industry expert interviewed who works both in the US and

Portugal conveyed the difference in market scope. “There we do
couple hundred square meters of renovation work, and here we
do a couple hundred thousand square feet.”81 While trade growth
is sluggish and there are many challenges for Portuguese SMEs
in this market, targeting development and growth in merely one
US state presents tremendous opportunity. Many large to small
exporters will target California, Texas, New York, Florida, and maybe
Colorado – if they have been following trends – but perhaps better
opportunities await Portuguese SMEs in Georgia, North Dakota,
Arizona, or Utah. This section has assembled the focal points of the
report by zooming in on competition and demand. From here, the
conclusion examines Portuguese SMEs strengths and challenges
and how sustainable export development and growth can be built
on the recommendations of the report.

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6.2 Portuguese SMEs’ Strengths and Challenges
In this final section, the report explores what it sees as Portugal’s

strengths and challenges in the US construction materials market.
Intended to compliment the insider’s perspective (Section 5), this
summary may give Portuguese SMEs critical insight into how to
market their products effectively in the US market. The summary
draws the report to a close by bringing together internal and
external competitiveness, legal regulations and compliance, and
supply and demand analysis.
Beginning with challenges, this final section examines:
»» critical resources SMEs need to increase their competitiveness

and respond to opportunities to supply US demand;
»» difficulty SMEs may encounter when building Portuguese product
visibility and recognition;
»» issues pertaining to the weaving of short-term goals into a longer,
more focused plan; and
»» outcompeting European competitors that have been leveraging
their competitive advantage(s) in the US market for several years
in advance of Portugal.
Following a discussion of these challenges, the report closes by

highlighting strengths that should motivate SMEs to seek access or
export growth to the US market via:
»» a comparison of Portuguese SMEs’ export potential to that of their

European (and/or global) competitors
»» assessment of competitive advantages that Portuguese SMEs
possess
»» underscoring how strategy-led growth can help SMEs work
towards recommendations from previous sections, such as:
–– consistent export volume

–– building relationships and establishing a US presence / industry
network
–– collaboration and SME-inclusive reassessment of short and
longer-term strategy
»» utilizing momentum in other foreign markets and goodwill

towards US-EU trade relationships
»» building a model for sustainable export development and growth.
6.2a Challenges
The challenges Portuguese SMEs face in the US market are
significant; the report parties are similarly SMEs and know first-
hand the challenges of developing and growing in the dynamic
US business environment. As Robert Burns, the Scottish poet, put
it: “The best laid schemes o’ mice an’ men / Gang aft a-gley.” Or: the
most well-developed export development and growth strategies
can easily go wrong. In Section 5.3, this report repeated the caveat

that succeeding at any level of business – in the US, Portugal, or
globally – requires a bit of luck. Being in the right place at the right
time requires luck and skill, and the best way to prevent unforeseen
events from disrupting export development strategies is to be
resourceful and flexible.
The most critical resource SMEs require to succeed in the US market

will be financial, and for this reason, the report has continued to
argue that SME collaborate to increase their chances of securing
funding. The report realizes that SMEs are in competition with
each other, but collaboration demonstrates an SME’s ability to
swim within a school of fish rather than go it alone, which can pose
restrictions on export development. Establishing an “export club”
would not only demonstrate to potential investors and funding
sources that SMEs can think creatively about how to grow their
businesses, but also that they are capable of cooperating in the
service of a shared goal: export development and growth across the
Portuguese and European construction industry. In Section 1, Figure
1.2 showed how recovery in Portugal’s construction materials export
sector has not kept pace with other sector exports. Because a single
exporter is nearly incapable of changing this course, collaboration is
critical to SMEs’ success.
SMEs may also find it beneficial to highlight Portugal’s strong track

record of satisfied foreign direct investment (FDI) customers. “FDI, in
net terms, registered an amount close to €5.4B in 2015, [down] 5.2% in
relation to 2014. The highest value in the last five years was registered
in 2012, when FDI reached €6.9B and in 2014 with €5.7B” (AICEP 2015:
8). Portugal’s top sources of FDI in 2105 were the Netherlands and
Spain (with 24.9% and 22.6% of the total respectively), Luxembourg
(18.5%), the UK, and France (7.3% and 4.9% respectively). FDI from
non-European countries reached 11.8% of total FDI in 2015, and key
contributors were Brazil (2.3%), Angola, Switzerland and the USA (with
1.6% each) and China (1.2%) (AICEP 2015).
Collaboration among SMEs is also a second-line of defense should

Portuguese SMEs be initially or ultimately unsuccessful in their
endeavors to enhance their financial resources. Establishing a US
presence, following dynamic trends, supplying diverse products
needs in the US, and building relationships are all expensive and
complex tasks for a single small or medium-sized business. A
collective of SMEs is exponentially more capable; however, such a
degree of collaboration will require trust, mutual goal-setting, and,
most likely, a series of legal agreements. Furthermore, the growth
rates of SMEs present an additional challenge to SME collaboration.
Companies grow at different rates, and some may not grow at all.
Because the business life cycles of SMEs can be less certain than
those of well-funded and established businesses, collaboration can
pose risks to SMEs, but an industry expert suggested the benefits for
SMEs cooperating in the US market far outweigh the risk. “They also
have to know that they will only make minor profit at the beginning,
at best, but then it builds from there. Growth can be very quick [in
the US market], so they have to be prepared to respond quickly.”82

• 125
Sections 2.3d and 2.4 reiterated the importance of short-term goals
in collaboration efforts, and for collaboration to work well among
competing businesses, short-term goals must center on individual
SME goals. Longer-term goals should be collaborative and
mutually beneficial, such as arresting the decline of construction
materials exports. To this end, collaboration with large Portuguese
construction materials exporters would be equally beneficial.
Resources like the AEP Chamber of Commerce, Industry of Porto,
and AICEP can play a key role in facilitating development and
growth among the construction materials industry as a whole. SMEs
would also be well advised to become or remain engaged with
other key players, such as the WTO, with its focus on SME growth;
the EU and Commission, to advocate Portuguese SME interests; and
Portuguese, European, or global interest groups, such as PVC Pipes
(see footnote 60). Financial support for SME trade liberalization and
collaboration are the most critical resources that will help SMEs
juggle the many elements that contribute to coherent and cogent
export strategies.
A second challenge Portuguese SMEs face developing or growing

in the US construction materials market is building the “Made in
Portugal” brand recognition and increasing product visibility. As
revealed in interviews, some importers, distributors, and / or retailers
have preferred sources for particular materials, be that American,
Chinese, or Turkish. Others look for new materials or alternatives in
various ways, such as through existing relationships, trade shows,
online research, or word of mouth. At present, it is unlikely that
Portuguese SMEs’ products would be uncovered through these
mechanisms. A strong US presence is the first deterrent to this
challenge, whether the presence is an individual SME’s brick
and mortar shop, a SME club representative, a US trade office,
or consistent trade show attendance and a period in the US to
conduct follow-up relationship building.
A club will definitely be effective here; the prices of Portuguese

materials, they are very competitive to here… if someone can be
here and show that their materials are 30-40% cheaper than
what we have here, they will be effective. There was a guy who
came from Spain and spent a lot of money marketing here. He
was in stone; he sold his products for $2 per square foot, and he’s
been very successful. Now everyone wants to buy from him.83
SMEs will recognize which option is most suitable for their needs,
goals, and budget.
After establishing a presence, the most important variable in

building the Made in Portugal product label is consistency, in both
export volume and continued presence. A handful of retailers and
distributors mentioned that companies come to sell their products
“door-to-door” or through cold calls or emails frequently. So much
so that the US government has ended their database of industry
contact; it is highly difficult to get a purchasing agent to speak
about potential products on the phone – even more challenging

via email. Where SMEs are currently exporting, the goal must
be on consistency. Portugal was outcompeted by its European
competitors because it has, in several product categories, failed
to export in consistent volumes. For example, Portugal has made
excellent progress in building ceramics exports, but year to year
the export volume varies significantly. While this can be related to
demand, the US construction materials demand is driven by owners
and designers, contractors and distributors. Consistent contact
and networking can help ensure export levels remain as consistent
as possible – such as Italy has managed to do in the ceramics
subsector – despite falling demand and sluggish trade growth.
Once presence and product visibility has been established through

a consistent presence, the concurrent goal is to improve Portuguese
product recognition. In interviews, retailers, distributors, importers,
and contractors knew the countries of origin for materials they
purchased, used, or imported. The goal here is get Portugal in the
front of their minds, and this can be achieved through obtaining
product certifications prior to exporting and marketing and
exceptional product quality and service, as learned from interviews.
SMEs will recognize whether it is in their current or future budget
to contract the services of a marketing, public relations, or business
development agency, but a handful of US SMEs interviewed said
these services were integral to their success. One industry expert
interviewed advised that Portuguese SMEs: “need to crash the
market at the beginning, and so they [need to] have someone
thinking about how they can do that – how they can stand out as
the cheapest, best quality products on the US market, a campaign
like that.”84
A third challenge will be to ensure that short and long-term

strategies are coherent and cogent, particularly for SMEs that
form an export club. A good way to identify coherence between
short and long-term strategies is the absence of interference, and
cogence can be recognized by clarity, persuasiveness, relevance,
and decisiveness. This recommendation sounds simple, but in the
pressures to develop and growth, SMEs often neglect to put their
goals and strategies to paper. Short and long-term strategies should
be reflected in every business decision. Without well-development
plans, the schemes of mice or men will certainly go awry – to come
back to Burns. “They need a long-term strategy to succeed [in the
US], just coming in with a short-term strategy to sell their products
will not work in a big country like this.”85
The case of a small e-commerce firm with over $3M in annual gross
revenue and more than a dozen employees is instructive. In its
excitement to grow domestic and foreign markets, the company
failed to adequately prioritize employee development, failed to
maintain facilities, and failed to reincorporate returned stock into
merchandise software. Amazon and eBay feedback deteriorated to
the point that the company’s accounts were suspended. Each slip
contributed to short-term irregularities that resulted in the eventual
84 Ibid.
85 Ibid.

• 127
collapse of the business. This demonstrates the importance of
coherence and cogence: short- and longer-term plans require
constant reassessment. Each challenge that SMEs face must be
recorded: what was the challenge, what actions were taken, what
result did actions have, was the challenge resolved positively or
negatively, and how did the challenge – and concurrent actions –
impact existing short and long-term strategies.
A final challenge SMEs face in the US market is outcompeting their

European competitors. There are many facets of this challenge,
and the first is to secure funding from regional, European sources;
this may require SMEs to build relationships with Portuguese
representatives active in Brussels to advocate for their interests. A
second facet is that some of Portugal’s European competitors (such
as Slovenia, Bulgaria, and Romania) have recently joined the EU.
Various domestic conditions — such as low labor costs, taxation,
and momentum around development in the newly industrialized,
capitalist economies — have helped these countries to establish an
advantage in the US market that makes them more competitive
against high-volume exporting countries like Turkey or India than
Portuguese SMEs.
Additionally, the US may have FTAs or BITs with many of Portugal’s

competitors where market access and trade facilitation are better
funded and focused and tariffs are lower or non-existent. Within
Europe, the US has BITs with Albania, Bulgaria, Croatia, the Czech
Republic, Estonia, Georgia, Latvia, Lithuania, Moldova, Poland (two
BITs), Romania, Slovakia, and Ukraine. Some of these countries have
been Portuguese competition targets in Sections 2 and 3, and some
are Portugal’s overall (global) competitiveness targets. The majority
of the US’ preferential trading agreements are with its North,
Central, and South American partners and a few Asian and Asian-
Pacific nations.
AICEP (2016) reported that Portuguese goods and services exports

to the US have doubled in the last five years because of bilateral
relations and export development cooperation. However, the
majority of these goods were in textiles, wine, software, and industrial
machinery. With many export countries receiving preferential
treatment or investment priority over Portugal, SMEs must mobilize
all aforementioned resources and strategies to outcompete foreign
suppliers in the US market, including working with trade associations
to deepen bilateral ties and export development cooperation. As
many of exporters with FTAs or BITs will have an already established
and consistent export presence in the US construction materials
market – an additional facet of this challenge.
6.2b Strengths
Confronting these challenges – rather than attempting to avoid
them – is an effective strategy for SME success, as is leveraging
strengths. When comparing Portuguese SMEs’ export potential
to that of their European or global competitors, it’s important
to consider comparative advantage. A comparative (economic)
advantage is the ability of one country or company to produce a
product more efficiently, using fewer resources, given all the other

products that it could produce. Comparative advantage is one
variable in a complex formula that country and company leaders
use to assess costs and benefits of production. At the global trade
level, this is how trade deficits / surpluses are configured, and why
it is good business for a country to import products that they also
produce for domestic and foreign markets.
Obvious reasons for utilizing comparative advantage are to supply

diversity needs, cope with dynamic markets, negotiate BITs and
FTAs (lower import costs), and respond to consumer demands and
preferences. Two interviews are relevant here. One interviewee
argued it made no sense for him to import materials that he could
acquire locally when he knows and trusts the quality. Another
argued that when cheap Chinese nails are good enough, American
companies have no reason to look for purchasing factors other than
lowest price. In consideration of these two challenges to Portuguese
SMEs, what comparative advantages can be leveraged?
SMEs can be comparatively effective at delivering urgent orders,

such as when a project needs change unexpectedly or when
labor issues in Canadian lumber industry cause a supply gap. Well
networked SMEs can play an instrumental role in filling supply
gaps immediately due to low communication and labor costs.
Additionally, a large Chinese manufacturer, if called up to fill an
immediate supply need, would most likely send products via a
large container ship. Portugal is 8 hours by air and 9 days by sea to
Newark, New Jersey – one of the US’ busiest ports – and 11 hours by
air and 20-40 days by sea to Houston, Texas, another very large port.
Portuguese SMEs could demonstrate reliability to US suppliers by

sending an initial order of products via air cargo and a larger supply
immediately following by sea, and the costs – in terms of shipping
time and transportation – would be comparatively lower than the
large Chinese manufacturer’s. Portuguese SMEs also have access
to a national shift towards more advanced and technologically
innovative modes of production, supply, and exporting, which
hold potential comparative advantages. Additionally, the costs of
exporting heavy materials — such as large loads of metal, ceramics,
or PVC products — is a much larger concern for distant exporters,
giving Portugal an enhanced comparative advantage. Portugal
avoids paying tax to use the Panama Canal in accessing east
coast US ports. Portugal’s trade infrastructure (road, rail, air, sea,
and broadband networks) is also already well established, and
this existing infrastructure, combined with high levels of English
language proficiency, will contribute to further comparative
advantages for Portuguese SMEs (AICEP 2013). In most subsectors
and product categories reviewed in the report, Portugal has
established thriving domestic and European industries; the
comparative advantage is in understanding the extent to which
these export industries can be expanded to the US.
Second, competitive advantage, as opposed to comparative, is

the ability of a country or company to produce products more
effectively by offering better value, quality, and service, and the
goal is to establish competitive advantage that is sustainable.
Portuguese SMEs can offer added value to US construction

• 129
materials companies by being more competitive on cost; interviews
suggest this is mandatory for entry into the US construction market.
Section 5.4 offered industry pricing resources. SMEs should carefully
understand what US importers and distributors are paying for their
products. This assessment has two core benefits; the first is that
products should not be offered on the US market until prices are
at the very least comparable to products currently on the market.
The second is that this assessment will also help SMEs determine
if there is greater competitive value in establishing a US brick-and-
mortar presence and obtaining and importers’ and / or distributor’s
license should SMEs find themselves priced out of the US market.
In addition to the resources highlighted in Section 6.2a, SMEs

should be savvy in the acquisition of financial resources, including
grants and opportunities to participate in EU-funded research.
For example, several universities and research institutions receive
European Research Council funding to investigate barriers to SME
growth, and the WTO and United Nations are focusing on SMEs as
part of their new agendas. Some newly developed SMEs may find
that they are eligible for Portuguese or EU start-up investment tax
credits, local tax and stamp duty exemptions, or research-and-
development opportunities funded by tax. Participation in seminars
and workshops, such as those held by the report parties, are also
worthwhile investments for SMEs.
The combination of quality labor at comparatively low prices has

helped Portuguese companies succeed in the past. Flexible labor
laws, high education standards, a highly skilled labor force, low
minimum wages, and existing US partnerships in business and
research all create advantages that SMEs can leverage to increase
their US market access. SMEs also tend to have more flexibility in
supplying demand. Filling small to medium-sized orders is one way
that Portuguese SMEs can compete with China on the US market,
as highlighted in Section 5.2a. They can also look to apply successes
they and large companies have had in the European and African
markets to US markets. SMEs can also concentrate on partnering
with one US state or large company. Becoming the primary supplier
for a state’s metal fasteners, or a general contractors’ bathroom
fittings, is an effective way to establish a competitive advantage.
As revealed in Section 2.3e, a 08% share increase in the US LVPE
market results in $10M.
This could also be the case for roofing tiles, where use of this
product is concentrated in US states with hot, arid climates, such as
Arizona and Nevada. In these two states, the housing market is also
rebounding after a prolonged post-2008 decline, which affected US
suppliers’ needs from 2011 to 2013 at minimum. Looking to establish
a competitive advantage in these states with roofing tiles (and
ceramics, in general), most US importers, distributors, and retailers
purchase Mexican, Italian, or Spanish materials. Therefore, SMEs
should ensure their product quality, price, availability, and customer
service compare with these top US producers.
Third, Portuguese SMEs’ can further develop by understanding how

strategy-led growth can help SMEs work towards recommendations
made in previous sections (consistent export volume, relationship

building, and collaboration on short and long-term strategy). One by
one each of these recommendations appears to be a large, possibly
unattainable goal, but by “operationalizing” – dividing a complex
process into actionable steps – strategy becomes a process of
development, assessment, revision, analysis, and achievement. For
example, the process of exporting in consistent volumes involves:
1. gathering subsector or product category export volume data

and analyzing five to ten year trends86
2. conducting a series of statistical analyses to determine average
export volume87
3. assessing how competitive advantage could help improve
export volume consistency88
4. using forecasting models to predict irregularities in export
volume, and applying predictive modeling to production cycles to
fill supply gaps before they present a problem; this not only ensures
that export volumes stay consistent, but also establishes SMEs as
industry leaders
5. applying predictive modeling to benchmark consistent export
volume to know when to launch new wave of US relationship
building campaign to advance from development to growth.
As indicated in the fifth step, relationships can be built through

campaigns, and it is essential that campaigns target the most
appropriate contractors, importers, distributors, retailers, states, and
regions for SMEs’ specific products. SME collaboration on short-
and longer-term strategy should include regular communication
and feedback to ensure that competition between SMEs does
not impede strategy development and execution. Through
operationalization, challenges appear more manageable, and
markets that seemed unattainable to SMEs open up via a series of
revisable step-by-step actions. With limited exception, all export
businesses began as SMEs, and the challenges presented in Section
6.2a are not unique to Portugal or the construction industry. They
have been overcome in the past and can be overcome again, even
in the world’s second largest single-nation import market.
Fourth, SMEs can become large exporters by capitalizing on

momentum in other foreign markets. Rather than see other
countries’ markets where large companies dominate as “occupied” or
“closed markets”, SMEs can network with those large companies to
fill smaller orders, take over production of less-profitable products or
orders, and / or work with smaller importers, distributors, or retailers.
By exploiting smaller markets in their formative years, SMEs gain
experience that will help them compete in the larger US market.
86 The report does not advise analyzing trends beyond 2008, as the export volume and
trade data will not be consistent with continued post-recession economic patterns and
trade flows.
87 The report would recommend conducting a “box and whisker plot” analysis to see means,
medians, and outliers of export volume.
88 The report suggests a highly complex “multivariate regression analysis” to indicate what
variables likely contributed to irregular export volume and to incorporate supply and value
chain analyses.

• 131
SMEs exporting construction materials should increase awareness
of projects of other Portuguese companies as part of their US
market development and growth strategy. Projects of particular
notability are:
»» In Portugal:
–– Vasco da Gama bridge

–– Marão Tunnel
–– Madeira Island Airport
–– Portuguese Motorway Network
–– Oporto Metropolitan Railway
–– Alqueva Dam
»» In the US
–– Northwest Parkway (Colorado, USA)

–– Cultural Center (Miami, USA)
–– Rockefeller Center (NY)
»» In Europe
–– University Campus (Belgium)

–– Fridhemsplan Metro Station (Stockholm)
–– Budapest’s Central Library
–– Sagrada Familia Cathedral, Barcelona
»» In the world
–– Macau Airport
–– Catumbela Bridge (Angola)
–– Bridge of Zambeze River (Mozambique)
–– Conference Plaza Hotel (Abu Dhabi)
–– Hotel Marriot (Mumbai)
–– New Supreme Court (Singapore)
–– Byelorusskaia Metro Station (Moscow)
–– Martin Place (Sydney)
In making presentations at trade shows or in face-to-face sales calls

or networking events, Portuguese SMEs should introduce their
companies and products with images and stories about large-scale
successes of the Portuguese construction industry. The US is a large
market, and first impressions are essential; SMEs must know how
to make a lasting impression on US buyers and decision makers.
Any part that SMEs’ materials played in these or other projects or
should be heavily featured. As one US retailer said, products that
are not tried and tested will not sell. It is essential to show how
products have demonstrated quality, service, and reliability, and to
utilize work that local and national business chambers and trade
associations have done to support Portuguese development and
growth. For instance:
»» Portugal is better: 3-minute video showcasing Portugal’s strengths

in technology, infrastructure, investment, trade, product quality,
quality of life, and business opportunity

»» Choose Portugal: 6-minute video about Portuguese natural and
human resources and continued capacity for development and
growth in various sectors
»» Invest in Portugal: 35-page PDF featuring Portugal’s competitive
advantages, including information on correction of structural
imbalances and implementation of reforms and support services
»» Web summit 2016: conference event that featured 21 sector
summit meetings, 500,000 international guests that gained
global press, including coverage by Bloomberg, the New York
Times, CNBC, and the Guardian and participation by Google,
Apple, Microsoft, IBM, Cisco, Tesla and SpaceX.
Portuguese SMEs should also express goodwill towards European

products in the US (and other foreign markets). Knowledge of
Portuguese innovation, product quality, and legacy in global trade
may not be as prevalent among US industry specialists; however,
knowledge of German manufacturing, standards, and export-led
growth is common in the US. SMEs should embrace American’s
awareness of overall European quality and reliability while
exploiting their lack of differentiation among European exporters.
Portuguese SMEs may find, for example, that associating their
products with that of the UK, rather than Spain or France, provides
better leads in the US.
Finally, Portuguese SMEs have many report recommendations,

resources, and strengths that contribute towards building a model
for sustainable development and growth. To build a suitable
and sustainable model, this report suggests that SMEs examine
conditions that led to the following:
»» Portugal’s World Economic Forum’s Competitiveness Index

Rankings:
–– 2015-2016: 38th
–– 2014-2015: 36th
–– 2013-2014: 51st
–– 2012-2013: 49th
–– 2011-2012: 45th
–– 2010-2011 46th
»» Portugal’s exports outcompeting:
–– Croatia
–– Finland
–– Ireland
–– Luxemburg

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»» Portuguese exports being outcompeted by:
–– Bulgaria
–– Estonia
–– Latvia
–– Lithuania
–– Slovakia
»» Portugal’s exports being similar to:
–– The Czech Republic

–– Greece
–– Poland
–– The UK
The core competitiveness issues that SMEs should consider in

building this model are:
»» Ensuring export volume consistency to improve competitiveness

»» Understanding why:
–– Countries with considerably lower GDPs outcompete Portugal;

Portugal is consistently outcompeted by countries with an
average GDP of $45.3B
–– Portugal, with $230.1B GDP, outcompetes countries with an
average GDP of $143.5B
–– Portugal exports in similar volumes to countries with a much
higher average GDP of $925.4B (IMF 2015).
How do Portuguese SMEs develop sector, subsector, and product

category exports to keep up with competitors from countries with
much higher GDPs that export in similar volumes? How do SMEs
avoid the mistakes of those that outcompete Portugal but have a
lower GDP? How do SMEs avoid the mistakes of those who have
attempted to enter and grow in the US market and failed? How
do SMEs establish themselves as leaders within Portugal, Europe,
and the world? In short, how do Portuguese SMEs go from the “sick
man of Europe” to the industry and regional leaders featured in
AICEP’s promotional videos? As the primary drivers of job growth
and innovation, these questions determine the future of Portuguese
SMEs, export development and growth, and the construction
materials industry’s contribution to GDP.

References
AICEP (2011), “SMEs are a Critical Cog in Domestic Economy”,
published on March 25, 2011, available at: http://www.
portugalglobal.pt/pt/portugalnewsarquivo2011/newsroom/paginas/
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THE US MARKET FOR BUILDING

MATERIALS AND OPPORTUNITIES

Produced by Marq Consulting Group and CH Academy,

Lead author: Dr Laura J White, Marq Consulting Group

August 2016 THE US MARKET FOR BUILDING MATERIALS

1.1 Report Parties 19

1.2 Report Focus 19

1.3 Report Methods 22

1.4 Report Subsectors and Product Categories 24

Section 2: Internal (US) Competition 27

2.2 Top US Producers 27

2.3 US Construction Materials Market Competition 29

2.3b Building Ceramics 37

2.3c Electrical Materials 46

2.3d PVC Materials 52

2.3e Metalware Products 58

Section 3: External Sector Competition 67

3.2 Top Sector Competitors 68

3.3 Global Competitors 70

3.3a Hardware: Other Metal Fasteners 70

3.3b Building Ceramics: Glazed Ceramics 71

3.3c Electrical Products: Light Fixtures 72

3.3d PVC Products: Plastic Pipes 73

3.3e Metalware: Iron Pipes 74

3.4 European Competitors 75

3.4a Hardware: Other Metal Fasteners 76

3.4b Building Ceramics: Glazed Ceramics 76

3.4c Electrical Products: Light Fixtures 77

3.4d PVC Products: Plastic Pipes 78

3.4e Metalware: Iron Pipes 79

Section 4: Legal Regulations and Compliance 83

4.3 Special Requirements 84

4.5 Distribution Structure and Channels 85

4.7 Effect of Legislation 88

Section 5: An Insider’s Perspective of the US

5.2 US Construction Materials Demand 93

5.2a Metal Sector Demand 94

5.2b Ceramics Subsector Demand 97

5.2c Electrical Subsector Demand 100

5.2d PVC Subsector Demand 102

5.3 Trends Affecting Supply and Demand 106

5.4 Understanding How the Competition

5.5 Conclusion 118

Section 6: Conclusion 121

6.1 Introduction 121

6.2 Portuguese SMEs’ Strengths and Challenges 124

6.2a Challenges 124

6.2b Strengths 128

Section 1 introduces the report, report parties, and

Section 2 assesses internal competition, top

THE US MARKET FOR BUILDING MATERIALS

Section 3 builds on Section 2’s internal

Legal regulations and compliance are the subjects

8 • USA NEXT CHALLENGE

THE US MARKET FOR BUILDING MATERIALS

THE US MARKET FOR BUILDING MATERIALS

Figure 2.2 US Padlocks Imports Market Value Volume One: 30

Figure 2.4 Top Ten US Padlocks Producers (2012) Volume Two: 1

Figure 2.5 Top Ten US Padlocks Producers (2011) Volume Two: 1

Figure 2.8 Top Ten US Metal Mountings Volume Two: 2

THE US MARKET FOR BUILDING MATERIALS

Figure 2.34 US LVPE Imports Market Value Volume One: 33

Figure 2.36 Top Ten US LVPE Producers (2012) Volume Two: 10