Thursday, May 8, 2014

When it grows up, Arabtec wants to be a dinosaur like Grupo ASC

Two out of three of my favourite construction ‘giants’ made it to the global business-news yesterday.
And no, neither because I waged a successful attack against them, though I’ve been known to attempt such questionable acts in the past.

Balfour Beatty has been attracting worldwide attention, due its less than acceptable (I guess to the shareholders) financial performance, that had its CEO unglamorously dumped as well.
(note to myself, stop writing to Andrew McNaughton regarding my own grievances, wait for a new chap to replace him).

Arabtec, on the other hand, the builder of the world’s tallest building, the Burj Khalifa, yesterday reported a net profit of Dh138 million for the first quarter of 2014, a 121 per cent jump from a year ago.

Nice, I thought, listening to the reporter of Abu Dhabi’s Classic FM discuss Arabtec’s success and ponder its plans for the future.
Aside from pronouncing Hochtief in a really weird way, the business commentator-woman explained, how Arabtec planned to become one of 10 largest construction companies in the World.
By when? Well, I can’t recall this, but soon enough.

She did mention numerous Chinese companies that were at the top of the pinnacle Arabtec was now targeting, I missed their names too, Gammon was definitely not amongst them, I’d notice that.
The one company she mentioned as the possibly biggest non-Chinese construction company of the world was the Spanish construction company Grupo ACS, one by chance I know quite well.

I’ve had personal and less personal dealings with this company (and its subsidiaries) over the last 4 years and I’d be quite sad if theirs was the type of success that Arabtec was wanting to emulate.
Sure, they gobbled up smaller/weaker companies over time. Sure, they play the game confidently and cool and they look like winners even when they make nothing but losses.
They may have more charm than others in the industry, but are they any more innovative, truly smart or ‘new age’ than the others?
No, not really.

I do applaud Arabtec for their financial success but would also suggest they look sideways too as they plan to grow even bigger.
Admittedly not in the near future (the ASC type dinosaurs do rule the industry for now and may hang on for quite a bit longer) but at some point in the next decade or two, the industry will change.
Being smart and innovative will count for more then.

Picture from here:

1 comment: