Building and construction to Fiji

(Last updated: 13 Feb 2012)

Trends and opportunities

The market

The building and construction industry has slowed down considerably after the December 2006 coup. Between 2000 and 2006 there had been multi-million dollar projects such as the Outrigger on the Reef, the Sofitel Resort and Spa, the Hilton, the Radissons, Colonial/Motibhai Suva Central, MH City Centre, Mid-City Plaza and many more.

Currently, private sector foreign investment remains subdued, however, the interim Fiji Government advises it is committed to investing in capital works in the infrastructure of roads, water and sewerage and there are plans for around A$170 million of capital works in water utilities alone by 2012. Road-related works and government housing projects have been financed by Exim Banks from Asian countries, which has resulted in tethering of the bulk of delivery to these countries corporations.

There are ongoing opportunities in the hotel refurbishment and private sectors. Fiji has over 100 hotels and resorts that generally speaking tend to be focused on upgrading their facilities rather than rebuilding. The tourism industry has proved to be relatively resilient in the face of Fiji’s political challenges with over 600,000 tourist arrivals in 2011.

The Grand Pacific Hotel is undergoing a FJ$78 million upgrade and works on a new FJ$30 million cinema multiplex have commenced. Tender for a FJ$290 million resort and casino project was also awarded in 2011.

Opportunities

The main opportunities for Australian exporters to provide building and construction products in Fiji are:

• Resorts furnishings
• Architectural products
• Bathroom fitting
• Building interior products
• Ductile cast iron
• Copper and galvanised pipes
• Door slide, handles and locks
• Drainage systems
• Energy saving devices
• Floor, wall tiles and adhesives
• Floor and wall boards
• Hardware and do-it-yourself products
• Lighting
• Outdoor furniture
• Paints and coatings
• Sanitary wares
• Steel products
• Security systems
• Structural elements
• Wall and floor covering
• Wall panels

The main opportunities in services are in the provision of consulting for designs, management of building projects and construction as head contractor. The head contractor then engages the local contractors to assist. Companies must be aware of the long lead times from project conception to implementation.

Competitive environment

Australian suppliers to Fiji’s building and construction industry are exposed to competition from New Zealand, China, Malaysia, Indonesia, Europe and North America.

Even though the market is perceived to be price sensitive, it does have niche market opportunities for high quality products and services.

Tariffs, regulations and customs

In Fiji there is a value added tax of 15 per cent on all goods and services. The fiscal duty applicable ranges from five to 32 per cent. Higher duty is generally applicable if the product is also made or available locally.

Marketing your products and services

Market entry

The Fiji building and construction industry is accessible, given the absences of trade barriers and varying range of tariffs, and the ease of transportation, communication and finance.

The industry is serviced by many importers comprising of:

• Trading houses
• Agents representatives
• Distributors
• Contractors
• Wholesalers and retailers
• Buying offices of some of the larger business operators such as the Fiji Sugar Corporation

Generally, architects and developers require aftersales services and product warranty where applicable. In most cases, they prefer to deal with their established suppliers and local distributors instead of dealing directly with overseas manufacturers. Hence a selection of a reputable and good distributor is an important entry strategy.

The products that are subject to high import duties may find that they are priced out of the market. In the circumstances, they should consider alternative market entry strategies such as manufacturing under license, joint venture or local partnership.

In order to develop a good business relationship with those involved in the building and construction industry, you should consider the following:

• Periodically visit Fiji to meet the key people/companies, such as executing agencies, donor agencies, multilateral funding agencies to get updated status of projects, architects and the major hardware outlets.
• Participate in exhibitions and trade shows.
• Build personal relationships with the industry groups.
• Demonstrate commitment to the industry by maintaining a profile and adopting a long-term outlook.
• Research the market and your potential competitors on regular basis.
• Companies also prefer to have brochures and product samples rather than relying on websites for information.
• Actively developing distribution channels

Distribution channels

There are five major hardware retail and wholesale outlets that supply a range of building products. Australian products have strong branding and positioning but price is an important factor in the Fiji market. Apart from the mainstream hardware distributors, there are a few specialised distributing and indent agents that supply to the market as well. Architects and engineers play a very important role in products specification and local players pay close attention to them.

It is important to note that the hardware industry in Fiji is under government mandated price controls, with maximum retail price and maximum eholesale price determined by the Fiji Commerce Commission.

Links and industry contacts

Government, business and trade resources for Fiji

Fiji Association of Architects – www.fijiarchitects.com
Fiji Islands Bureau of Statistics – www.statsfiji.gov.fj
Investment Fiji – www.investmentfiji.org.fj
Reserve Bank of Fiji – www.reservebank.gov.fj

Media

The Fiji Sun – www.fijisun.com.fj
The Fiji Times – www.fijitimes.com.fj