THE TOP 225 INTERNATIONAL CONTRACTORS the Top 225 International Contractors Webhead to Come

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THE TOP 225 INTERNATIONAL CONTRACTORS the Top 225 International Contractors Webhead to Come THE TOP 225 INTERNATIONAL CONTRACTORS The Top 225 International Contractors Webhead to come STRABAG SE broke through on its tunnel boring on May 13, 2011, on the 6.3-mile #08 water tunnel under Niagara Falls, Ontario, for Ontario Power Generation. With Traditionally Strong Markets in Decline, Firms Look to Break Through in New Regions By Peter Reina and Gar y Tulacz The international contracting community has been enduring diffi cult economic headwinds during the past three years. However, even as the U.S. continues to fi ght off the prospect of a double-dip recession and European nations pull back from stimulus programs to stabilize the troubled euro, opportunities are bubbling for international contractors in developing countries, particularly those rich in resources. T H E TOP 225 INTERNATIONAL CONTRACTORS 4 6 Overview 4 8 Top 10 by region 51 How to read the tables 4 6 Market analysis 48 Backlog analysis 53 The Top 225 International 4 6 Hiring 4 9 Top 10 by market Contractors 5 8 4 7 International regions 5 0 Top Global CM/PM fi rms Index of International Contractors 61 4 7 Analysis of past decade 5 1 How the Top 225 International The Top 225 Global Contractors 6 6 47 Profi t/loss analysis Contractors shared the 2010 market Index of Global Contractors PHOTO COURTESY OF STRABAG OF COURTESY PHOTO enr.com August 29, 2011 ENR 45 ENR08292011TL_Top225Opener.indd 45 8/22/11 7:15:48 PM THE TOP 225 INTERNATIONAL CONTRACTORS General Building Transportation Market Analysis 83,026.4 (21.6%) 109,007.2 (28.4%) Petroleum 89,320.8 (23.3%) Industrial Power Other 20,948.0 (5.5%) 38,598.1 (10.1%) 15,749.3 (4.1%) Sewer Waste 6,389.3 (1.7%) Manufacturing 4652.6 (1.2%) Water 12,380.8 (3.2%) Hazardous Waste 630.2 (0.2%) Telecom 2,959.6 (0.8%) (Measured $ millions) Source: McGraw-Hill Construction Reasearch & Analytics/ENR. Professional 93 Professional 109 Increase (Measured in Domestic International 30 Decrease 46 firms reporting) Staff Hiring Staff Hiring 62 53 Stayed the Same Source: McGraw-Hill Construction Research & Analytics/ENR. The global shift in the international construction mar- impact of the downturn on the firm. “Latin America, ket can be seen in the results of ENR’s Top 225 Inter- the BRIC [Brazil, Russia, India and China] countries national Contractors list. The Top 225 as a group gen- and Southeast Asia are certainly all regions where we erated $383.66 billion in 2010 contracting revenue see great opportunities for the future, and we are ac- from projects outside their home countries, down only tively targeting these regions for business growth.” marginally from 2009’s figure of $383.78 billion. On The sovereign debt crises hitting some European the domestic front, 2010 revenue for the Top 225 rose Developing countries have hurt many construction programs. by 10.8% to $688.71 billion, led by China's major large-scale “Construction-related spending from the economic growth among contractors working on that nation’s public-private- stimulus programs was stopped earlier than expected partnerships is massive infrastructure program. “one of our or not passed at all, instead being replaced by austerity Contractors are shifting their focus to new and strategic packages to help slow the national debt,” says Hans emerging markets, which can be seen in the Top 225’s priorities ... to Peter Haselsteiner, CEO of Austria’s Strabag SE. regional revenue breakdowns. International revenue generate However, he says there has been an uptick in invest- fell 6.6% to $94.18 billion in Europe. It also fell 6.6% long-term ment from private clients and German developers. operating in the Middle East to $72.43 billion and 6.5% to $32.61 income.” Philippe Quoilin, COO of Besix warns that the billion in the U.S. budget woes in the U.S. and the European Union may Yves Gabriel, By contrast, international contracting revenue rose have an indirect impact on other countries’ spending. CEO, Bouygues 25.6% to $34.05 billion in Latin America and the Carib- Construction The sovereign debt crisis has limited many countries’ bean, 6.7% to $60.59 billion in Africa and 4.7% to $76.64 ability to invest in costly projects, and countries in billion in Asia and Australia. This shift in focus is leading good financial shape have “received the warning and to upheaval for major international contractors. will not make the same mistake. They will be prudent International construction firms have not escaped in investing in construction development,” he says. the recent turmoil in international markets. “The main Europe’s construction community underwent ma- impact has been in the U.S. and the European Union,” jor change this summer as Germany’s largest contrac- says Pierre Duhaime, CEO of SNC-Lavalin Group. tor, Hochtief AG, fell under the control of Spain’s However, SNC has been traditionally strong in devel- ACS Group. Hochtief’s CEO, Herbert Lütkestratköt- oping countries such as those in Africa, softening the ter quit and was replaced in May by Frank Stieler, an 46 ENR August 29, 2011 enr.com ENR08292011TL_Top225Overview.indd 46 8/22/11 7:21:13 PM SNC-LAValIN InTERnaTIOnal Inc. acquired Atomic Energy of #64 Canada Ltd.’s commercial reactor division in June 2011. Europe $94,183.4 Market Analysis (24.5%) International Regions Middle East $72,434.0 Asia / Australia Number of Firms (18.9%) $76,639.7 Reporting Profit/Loss (20.0%) U.S. 161 155 Domestic Profits $32,612.9 (8.5%) Domestic Loss International Profit Latin America Canada South / International Loss $30,425.2 $13,003.2 Central Africa 23 20 (7.9%) (3.4%) $31,051.8 (8.1%) North Africa Caribbean $ 29,540.4 Volume (in $ billions) $3,620.7 (7.7%) Domestic (0.9%) 901.4 Revenue 688.7 Domestic 528.2 New Contracts 383.7 International (Measured $ millions) Revenue Source: McGraw-Hill Construction International Reasearch & Analytics/ENR. New Contracts Comparing the Past Decade’s International $106.5 $116.5 $139.8 $167.5 $189.4 $224.4 $310.3 $390.0 $383.8 $383.7 Contractor Revenue: 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (in $ billions) Sources: McGraw-Hill Construction Research & Analytics / ENR. executive board member since 2009. Hochtief will con- Independent States. He says that many major contrac- tinue functioning as a separate company, helping ACS 203 tors are holding back in the face of new competitors enter new markets like Asia Pacific, according to one of the Top 225 making unrealistic bids in unfamiliar markets. bank analyst in Frankfurt. sent in surveys One such situation arose in June. China Overseas Hochtief will increasingly focus on energy, trans- last year. Engineering Group was dismissed as contractor on the portation infrastructure and urban construction sec- A2 project in Poland. The action had less to do with tors, says Stieler. It will increase “asset turnover,” par- % its bid price than experience, says Johan Karlström, ticularly by selling public-private-partnership 53.7 CEO, Skanska Group. “They underestimated how investments. Hochtief is on course to sell its airport had increased difficult it is to go to a new market,” he says. But as international business by this year’s end, he adds. The firm has in- revenue in China’s internal economic growth moderates, Karl- terests in airports in Athens, Budapest, Düsseldorf, 2010. ström believes more Chinese contractors will look for Hamburg, Sydney and Tirana. entry into new geographic markets. Alain Bonnot, chairman and CEO of Vinci Con- Chinese contractors “are becoming bigger com- % struction Grands Projets (VCGP), is uncertain how its 46.3 petitors,” agrees Yves Gabriel, CEO of Bouygues Con- relationship with Hochtief will change. Until now, had lower struction. “We are mainly competing [with Chinese Hochtief teams have been “good competitors and good international contractors] in Africa for the moment, but these com- revenue in partners,” he says. “ACS/Dragados has been very ag- 2010. panies might probably come in Europe in the future.” gressive ... because they have an internal market which Balfour Beatty already is competing with Chinese firms is completely destroyed.” in Hong Kong and the Middle East, says CEO Ian Tyler. “They do have some specific skills which are Competitive Pressures very good,” he adds. The downturns in many major regions have caused an Chinese contractors have proposed joint venturing increase in competition as more firms enter unfamiliar with VCGP internationally, says Bonnot. “I don’t know markets. “We see crowding of markets as some local if we will. We don’t want to have partners just to get a players aspire to be global players,” says Ravinda lower price. If they have good technology and are well Kansal, regional CEO of India’s Punj Lloyd operations [placed], then why not?” he says. in Africa, the Middle East and the Commonwealth of While Chinese contractors have been pushing into enr.com August 29, 2011 ENR 47 ENR08292011TL_Top225Overview.indd 47 8/22/11 7:21:15 PM THE TOP 225 INTERNATIONAL CONTRACTORS The Top 10 by Region 1 EUROPE 2 ASIA / AUSTRalia 3 MIDDLE EAST Top 10 Revenue: $55,910.6 Mil. Top 10 Revenue: $36,243.1 Mil. Top 10 Revenue: $ 25,601.1 Mil. RANK Sector's Revenue: $94,183.4 Mil. RANK Sector's Revenue: $76,639.7 Mil. RANK Sector's Revenue: $72,434.0 Mil. 2011 2010 2011 2010 2011 2010 1 2 VINCI 1 1 HOCHTIEF AG 1 2 Consolidated CONTRACTORS GROUP 1 1 VINCI 2 1 STRABAG SE 2 5 FLUOR CORP. 2 1 KBR 2 3 BOUYGUES 3 4 SKANSKA AB 3 3 CHINA COMMunications CONSTR.
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