Ryland Group plans to build houses in Mexico Company again set to expand abroad

April 07, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

Expanding into yet another foreign housing market, the Ryland Group is looking to begin building houses for the Mexican market, Ryland officials said yesterday.

"Mexico looks like a viable market for a lot of products, and housing is one of them," said Charles T. Slay, international operations manager for Ryland Trading Ltd., a unit of the Columbia-based Ryland Group.

Last month, Ryland's trading company entered into a partnership with Orendain Equipo Constructor S.C., a Mexican firm that has built homes in the Guadalajara region for 20 years. The new venture will be called Ryland y Orendain Mexicana.

Ryland -- which formerly built homes in Israel and has begun BTC home-building ventures in Russia, Senegal and Turkey -- just completed a steel-framed model home at a factory in Guadalajara, Mexico's second-largest city.

If the venture succeeds, Ryland will build 320 to 400 houses this

year targeted at the low- to middle-income Mexican market, Mr. Slay said. At least 800 houses a year could be built eventually. The Mexican new-homes market should be as profitable as the U.S. market, he said, but he declined to make financial predictions.

Vaike T. O'Grady, a Ryland spokeswoman, said it was impossible to predict how lucrative the Mexican market could be, although she said demand for housing is large because of population increases.

For instance, the Guadalajara area has tripled in population in five years, fueled by people leaving Mexico City, Ms. O'Grady said. "The working-class group is desperate for housing," she said.

Traditionally, most houses in Mexico were built of concrete, a favored material because of its durability, Ms. O'Grady said. But concrete construction is time-consuming.

To meet the demands of Mexican consumers, Ryland decided to use metal framing that can be used to build a house within three months, instead of the 18 months typically required to build a concrete home, Ms. O'Grady said.

"Steel is more readily accepted by our Mexican customers than is wood," she said. "They're very concerned about durability."

Houses are built by the private sector and are often marketed through labor unions. Still, the Mexican government encourages certain housing developments by providing government-owned land and other assistance to the builders it sanctions, Ryland officials said.

To gain government acceptance for its developments, Ryland Trading has entered its steel-framed prototype model home into a competition being conducted by the Mexican government, Ms. O'Grady said.

In Mexico, she said, Ryland will target two groups in its marketing. It will seek to sell small two- to three-bedroom houses to working-class families for $30,000 to $50,000. It will also build larger houses, to sell for $150,000 to $200,000, for the emerging middle class.

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