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  • enr.com August 21/28, 2017 ENR 33

    PHOT

    O CO

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    F BE

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    MOUNTAIN VIEW

    In a joint venture with Enka Insaat,

    Bechtel is building the Kosovo Motor-

    way, connecting Kosovos capital,

    Pristina, with FYR Macedonia.

    A Tough Look at a Tough MarketLow oil prices and global economic and political turmoil have firms taking a hard look at the markets risks and rewards By Gary J. Tulacz and Peter Reina

    International Contractors

    NUMBER 05

    Overview p. 34 // International Market Analysis p. 34 // Past Decades International Contracting Revenue p. 34 // International Region Analysis p. 35 // 2016 Revenue Breakdown p. 35 // 2016 New Contracts p. 35 // Domestic Staff Hiring p. 35 International Staff Hiring p. 35 // Profit-Loss p. 36 // 2016 Backlog p. 36 // Top 10 by Region p. 36 // Top 10 by Market p. 37 Top 20 Non-U.S. International Construction/Program Managers p. 38 // Top 20 Non-U.S. Global Construction/Program Managers p. 38 // Powering Saudi Arabias Jazan Industrial City p. 39 // How Contractors Shared the 2016 Market p. 40 How To Read the Tables p. 40 // Top 250 International Contractors List p. 41 // International Contractors Index p. 46 Top 250 Global Contractors List p. 47 // Global Contractors Index p. 52

    0821_Top250_Cover_6.indd 33 8/15/17 11:31 AM

  • The market for international contractors has been under going stresses over the past four years, starting with a drop in commodity metals prices, which curbed the mining sector, closely followed by the collapse in oil prices. International contractors also have had to contend with national political and fi nancial upheavals.

    The uncertainties in the international construc-tion market can be seen in the results of the ENR Top 250 International Contractors survey. This list ranks fi rms based on contracting revenue from projects outside of their home countries, measuring their pres-ence in international commerce. ENRs Top 250 Global Contractors list also ranks contractors based on total worldwide contracting revenue, regardless of project locations.

    The Top 250 International Contractors reported $468.12 billion in contracting revenue in 2016 from projects outside their home countries, down 6.4%, from $501.14 billion, in 2015. This is the third straight year showing a drop in Top 250 revenue. As a group, firms also reported $927.94 billion in revenue from domestic projects in 2016, up 3.4%, from $897.33 billion, in 2015.

    On a regional basis, the Middle East was the biggest gainer, up 9.8%, to $84.02 billion, in 2016. This increase still is well below the $91.32 billion earned by the Top 250 in 2012. Europe also saw

    a modest gain in 2016, rising 2.7%, to $95.99 billion.The international contracting market in Canada

    continued its free fall, down 18.4%, to $18.72 billion, in 2016 after falling 22.4% last year. The Canadian market is off 45.3% since 2013, refl ecting the down-turn in its oil-sands market. The biggest loser was the Latin American market, which declined 42.9% on weakening economies and political turmoil.

    Among market sectors, the petroleum market is the most prominent one under siege. Revenue from petroleum-related projects among the Top 250 fell 8.6%, to $104.51 billion, in 2016 and is down 16.3% from 2015. The buildings market fell in 2016, down 5.1%, to $101.43 billion, while the power market also sagged, dropping 15.8%, to $45.55 billion.

    In contrast, the transportation market, the largest international market for the Top 250, has continued to grow through global tumult, rising 3.4%, to $144.38 billion.

    Greasing the SkidsLow oil prices are putting a severe damper on petro-leum projects throughout much of the world. Oil prices per barrel remain in the low $40 range, and many fi rms believe this price trend will continue for the foreseeable future.

    An example of the impact of low oil prices was the

    34 ENR August 21/28, 2017 enr.com

    THE TOP 250 INTERNATIONAL CONTRACTORS

    Water$12,218.8Sewer/Waste

    $6,013.9

    Transportation$144,378.7

    Manufacturing$10,097.1

    Petroleum$104,507.7

    Industrial$14,698.0Telecom

    $4,769.8

    Power$45,552.6

    Other$23,258.7

    Buildings$101,432.4

    HazardousWaste$1,192.8

    0.3%

    1.0%

    1.3%2.6%

    2.2% 3.1%

    5.0%

    9.7%

    22.3%

    30.8%

    21.7%

    SOURCE: ENR

    (Measured $ millions)

    Comparing the PastDecades InternationalContractor Revenue

    *THE 2012 FIGURE IS FOR THE TOP 225 INTERNATIONAL CONTRACTORS. THE EXPANDED TOP 250 LIST FIRMS HAD A COMBINED REVENUE OF $468.1 BILLION.

    $310.32007

    $390.02008

    $383.82009

    $383.72010

    $453.02011

    $468.12016

    $507.5*2012

    $544.02013

    (in $ billions)SOURCE: ENR

    $521.52014

    $500.12015

    Intl Market Analysis

    The contracting industry is being affected by the aggressive stand by some government-backed companies from China and Korea with fi nancing offi ces.

    Samer Khoury, President, Engineering and Construction, Consolidated Contractors Group

    0821_Top250_Overview.indd 34 8/15/17 11:33 AM

  • July 26 announcement by Malaysias national oil com-pany, Petronas, that it had cancelled the Pacific North-West LNG project at Port Edward, British Columbia. The decision was a result of the prolonged depressed prices and shifts in the energy industry, it noted.

    Firms in the petroleum market expect more of the same. Unless oil stabilizes at $50/bbl or above, we should expect the negative trends to continue, says Samer Khoury, president of engineering and construc-tion at Greece-based Consolidated Contractors Group.

    But the news is not all bad in the petrochemical arena. Many oil producers are focusing their capital spending on projects to optimize processes and reduce maintenance costs, says Pierroberto Folgiero, CEO of Italys Maire Tecnimont Group. This means pipelines and lots of infrastructure, he observes.

    Further, cheap gas is a strong driver in many regions. The gas-rich USA is kind of the place to be for a downstream contractor, Folgiero says. Down-stream gas is strong in many regions, whether for export purposes or as feedstock for fertilizer and poly-olefins plants, he notes.

    On the other hand, the trend toward urbanization has forced nations to invest in infrastructure. Every nation has drawn the blueprint for the economy [revitalization] and given priority for some large and important projects, says Li Runyao, commercial

    manager of China Energy Engineering Corp. Ltd.Urbanization and the subsequent need for sup-

    porting infrastructure is a global phenomenon. Egypt, Algeria, Saudi Arabia and Iraq are classified as young, populous, emerging countries with increased demand for infrastructure. These funda-mentals should provide continued opportunities for years to come, says Osama Bishai, CEO of Egypts Orascom Construction.

    This development has led to a surge in work to support urbanization efforts. The growth of mega-cities and the quest for sustainability are boosting transportation and renewable-energy orders to a de-gree that had not been the case for decades, thinks Pietro Salini, CEO of Italys Salini Impregilo SpA.

    Risky BusinessThese trends have caused some large contractors to reassess their portfolios. Many international contrac-tors report having some success in shifting gears. For example, after a period of falling sales, we are growing again, says Jrme Stubler, chairman of Paris-based VINCI Construction.

    VINCI took this road because of changes in many of its base markets. Cuts in local French government spending hurt VINCI at home in the past few years, says Stubler. At the same time, low oil prices reduced

    enr.com August 21/28, 2017 ENR 35

    OVERVIEW

    (Measured $ millions)

    UnitedStates$53,595.2

    LatinAmerica$30,906.8

    North Africa$23,635.8

    Europe$95,985.3

    Canada$18,717.9 South and

    Central Africa$37,903.8

    20.5%

    MiddleEast$84,019.3

    17.9% Asia andAustralia$120,306.1

    25.7%

    5.0%

    8.1%

    Arctic/Antarctic$203.2

    0.0%

    4.0%

    CaribbeanIslands$2,847.3

    0.6%

    11.4%

    6.6%Domestic Revenue

    International Revenue

    Total Revenue

    Revenue (in $ billions)$1,396.1

    $927.9

    $468.1

    SOURCE: ENR

    Domestic New Contracts

    Intl New Contracts

    Total New Contracts

    New Contracts (in $ billions)$1,893.8

    $1,386.7

    $507.1

    SOURCE: ENR

    Intl Region Analysis

    of the Top 250 sent in surveys last year

    229

    increased international revenue in 2016

    48.9%

    had lower international revenue in 2016

    51.1%

    SOURCE: ENR

    Increase

    Decrease

    Stayed the Same

    (Measured infirms reporting)

    ProfessionalInternationalStaff Hiring

    80

    50

    77

    ProfessionalDomesticStaff Hiring

    83

    50

    79

    0821_Top250_Overview.indd 35 8/15/17 11:38 AM

  • demand for its specialty division in that sector and hit infrastructure spending in its African markets, he adds. VINCI retains a network in Frances former African colonies, some of which rely on oil exports. We see lots of projects, but [they are] lacking financing, says Stubler.

    For Swedens Skanska AB, the market is strong in all our geographies, says Johan Karlstrm, president and CEO. Compared to last year, orders are up in Nordic and European markets but down in the

    U.S., where the firm faces fierce competition, he adds.Many contractors complain that clients are

    becoming more demanding and, in some cases, less reliable because of economic upheavals. Lebanons Contracting and Trading Co., aka C.A.T. Group,