South America: A land of opportunity

With growing urban populations, significant infrastructure needs, and a growing awareness of sustainability issues, the region is drawing attention from companies seeking new opportunities. But is South America truly the next frontier for the demolition and recycling sectors?

Fábio Bruno Construções is one of just a handful of demolition specialists in South America with the ability to take on large-scale dismantling and decommissioning works.

CREDIT: FÁBIO BRUNO CONSTRUÇÕES

T he demolition and C&D waste recycling industries are rapidly evolving worldwide, and South America is no exception.

With growing urban populations, significant infrastructure needs, and an increasing awareness of sustainability issues, the region is drawing the attention of companies that are looking to grow. Yes indeed, the opportunities for demolition and recycling companies in South America are plentiful, but turning them into profitable ventures poses challenges, both for non-native companies and established local players alike.

ECONOMIC AND MARKET DYNAMICS

Compared to North America, the economic climate in South America could be described as somewhat turbulent. And with so many countries – 12 to be exact – in a region with such diverse resources, there’s no need to speculate as to why this would be the case.

Argentina, Brazil, Chile, Colombia, and Peru host the largest economies, but volatile GDP and inflation rates demonstrate their differences. According to the International Monetary Fund (IMF), real GDP in the region is projected to grow between 2.2% and 2.5% in 2025, though inflation remains a significant unknown.

“Brazil has seen financial volatility of late, although some markets are growing,” comments Fábio Bruno Pinto, Managing Director of Fábio Bruno Construções. “Here at Fabio Bruno, we understand that demolition is the first level of sentiment in the economy, and we can see the early signs of a slowing economy.

“When the demolition market slows, we understand that less investment is being made. When the market starts to heat up, the first service to be performed is demolition. He adds: “A silver lining of the economy doing badly, is some companies will leave Brazil and their plants need to be decommissioned, decontaminated, and demolished. This is the area from where we are expecting a greater demand.”

Fábio Bruno, Managing Director of Fábio Bruno Construções.

CREDIT: FÁBIO BRUNO CONSTRUÇÕES

Similarly, Chile’s economic growth has slowed in recent years, hovering around 2.3% annually. However, the mining sector remains robust, driven by strong the global demand for copper – Chile’s primary export. “Mining continues to invest heavily, even as other construction sectors struggle,” says Michel Chait, General Manager of Grupo Flesan’s mining division. Emilio Salgado, Grupo Flesan’s CEO, reinforced this point, noting the company’s ability to remain resilient in a challenging economy.

“Our diversification across sectors, including residential construction, bridges, and road maintenance, ensures stability,” Emilio says. “Even when some areas face difficulties, we can rely on mining to drive growth.”

Emilio also expressed concern about global economic dynamics. “Developments in major economies like China or the United States can have a significant impact on us,” he explains.

“For example, if China reduces its copper demand, it would affect Chile’s exports. Similarly, restrictive trade policies in the US could pose challenges.”

REGULATORY AND INFRASTRUCTURE CHALLENGES

Other challenges for South America’s demolition and recycling sectors include regulatory inconsistencies across borders, which complicate operations for international companies.

According to the IDB Invest report Cross-Border Challenges in South America: “The need for harmonised regulations across borders remains a pressing concern for businesses seeking regional expansion, especially in industries with high compliance requirements.”

In addition, recycling infrastructure remains underdeveloped, particularly in rural areas, limiting C&D waste recovery initiatives.

Logistical hurdles, such as transportation bottlenecks and complex permitting processes, also add to these challenges. Companies entering new regional markets must work closely with local stakeholders to ensure compliance and efficiency.

INDUSTRY STANDARDS AND PRACTICES

Another factor affecting the industry is the difference in working practices and standards, and the ability of clients – even state-owned organisations – to be able to pay for them.

“Fábio Bruno is a company that always works with a high level of quality and excellent customer service,” says Fábio, commenting on industry standards in Brazil. “In private projects, we have the advantage of being more technically qualified than our competitors. This greater qualification has an associated cost that may not be accepted by the immediate client.

“However, when we can demonstrate the benefits and gains that the client will receive by performing the service with greater quality and safety, we certainly win the job.”

He adds: “Public agencies are unable to perform this analysis, therefore it is very difficult to compete for public works. Fábio Bruno will not compromise on safety and quality and we will not cut corners to lower a price to win a job," he states. "We would never perform a service without complying with all current regulations, even if this means our price is not winning the work.”

And when it comes to carrying out works in countries such as Paraguay, Peru and Uruguay, Fábio reveals: “Other countries in South America are similar to Brazil, offering little oversight of demolition work. Until this concept changes, we will continue to seek out the multinational market, which will certainly value our services.”

SUSTAINABILITY EFFORTS

The shift towards Net Zero and environmental sustainability is also significantly slower in South America when compared to other regions. “The issue of environmental sustainability is common among multi-national companies operating in Brazil,” says Fábio. “But very few national companies are truly concerned about greenhouse gas emissions.”

Michel Chait, General Manager of Grupo Flesan’s mining division.

“And so, this concern is often not taken into account,” he adds.

While leading companies such as Brazil’s Fábio Bruno Construções, Chile’s Grupo Flesan and Argentina’s Grupo Mitre adhere to high environmental, safety and training standards, they also face skills shortages.

WORKFORCE DEVELOPMENT AND INNOVATION

“It’s increasingly difficult to find experienced operators for specialised equipment,” admits Michel.

“We often need to train people in-house. Younger generations are less inclined to take on the demanding conditions of mining work, such as extended shifts in remote locations.”

Michel explains that workers in mining demolition typically operate on shifts of 14 days on-site followed by 14 days off.

“It’s very hard for people, especially younger workers, to leave their homes and families for such long periods. Some new workers try it once and never return.”

The physically demanding nature of demolition mining work, compounded by the need to adapt to high altitudes and harsh environmental conditions, further discourages potential workers.

In addition to its operations in South America, Fábio Bruno Construções has also established itself in the US market, by partnering with Project Delivery Group – an established general contractor in Florida, California and the Caribbean.

CREDIT: FÁBIO BRUNO CONSTRUÇÕES

Despite these difficulties, Grupo Flesan remains committed to training and developing its workforce. However, the broader challenge of attracting new talent, here too, remains unresolved.

Additionally, the absence of government initiatives to support workforce development in demolition exacerbates the issue.

Michel emphasises the need for early engagement with younger generations to showcase the opportunities within the demolition and mining industries.

“We need to work with schools to tell young people about mining and its potential,” he says. “It’s the main industry in Chile and offers fascinating career paths.”

COMPETITORS IN THE DEMOLITION INDUSTRY

In turn, these workforce challenges are compounded by the competitive landscape within the Chile’s demolition industry.

The urban demolition sector, in particular, is dominated by smaller companies offering traditional dismantling services.

According to Michel, these firms often lack the technology, expertise, and capacity to handle the large-scale and technically complex projects that Grupo Flesan specialises in. “We often compete with firms that rely heavily on manual labour and traditional methods,” Michel says.

“Our ability to deliver faster, safer, and more efficient demolitions using specialised technology gives us a significant edge.” Despite this, the competition helps drive innovation, ensures high standards and continued investment.

INNOVATION AND PROFESSIONALISATION

“We invest in new technologies and have a dedicated innovation team,” Michel shares. These investments not only enhance efficiency but also support the company’s goal of maintaining high safety and environmental standards.

In addition to technological advancements, the company is working to improve inclusivity within its workforce. “We are striving to become a more women-inclusive company,” Michel reveals, reflecting broader industry trends towards diversity and inclusion.

Grupo Flesan also aims to play a role in raising industry standards by collaborating with smaller demolition firms.

“We work with smaller companies to help them professionalise and meet the standards required for mining projects,” Michel explains.

This collaborative approach not only strengthens the industry but also ensures a broader base of qualified contractors to meet growing demand.

THE LAND OF OPPORTUNITY

From the insights given by contractors in the region, it’s clear to see that South America is a dynamic and evolving landscape where innovation and expertise can make a significant impact.

Is it the ‘new' land of opportunity? Yes. But needless to say, it is not without its complexities.

The region’s growing demand for modern demolition methods and sustainable waste management practices provides a clear path for growth. However, companies must carefully evaluate market conditions, regulatory environments, and infrastructure challenges before committing to medium and large-scale opportunities.

Success of any kind - whether it be for domestic contractors seeking to enter new sectors, or for multinational firms that are looking to expand into new markets – will not be easy, or perhaps even possible, without establishing deep and trusted partnerships with fellow contractors and industry partners.