The head of Canadian contractor Aecon has said the company will have to pass on billions of potential international contracts after the government intervened to block its sale for US$1.1bn to China Communications Construction (CCCC) last month.
John Beck, the company’s chief executive, said in an interview with the Financial Post newspaper: "We know of two large international projects right now that we could have participated in that we will not, simply because there’s only so much you can do at one time. We will be much less aggressive in our international business."
He added that Aecon has also needed the extra investment to enable it to compete in the Canadian market against foreign competitors, but in another interview, with Bloomberg, he ruled out a sale to any other company.
The company recently pulled out of the US$1.5bn Gordie Howe bridge scheme citing capacity constraints.
The announcement of a deal with CCCC, which is 63% owned by the Chinese government, provoked an energetic PR campaign in the Canadian press, reportedly led by other contractors who were nervous about Aecon’s "increased financial heft", as the Post put it.
Beck rejected this argument on the grounds that Canada’s domestic market was already open to foreign competition, and that its main contractors were grappling with European, US and Asian firms that "continuously outbid" them.
He told the Post: "The biggest frustration I’ve had for years now is we are one of the most successful contractors in Canada, we’ve been growing for 50 years, we’re responsible citizens, and we cannot compete with all of the foreigners that are here, because they’re here with the blessing of our government. That’s why, in my view, Canadian companies should be allowed to beef up, to bulk up, in order to compete with these guys," he said.
At the same time, Beck has been trying to reassure financial analysts about Aecon’s business strategy in the wake of the CCCC affair, which caused the company’s share price to rise, and then fall, by 15%.
Despite his complaints about foreign competition, he is stressing the Ontario-based firm’s long-term strength, based on a 50% rise in its order book, to US$4.6bn, and the high level of demand in Canada’s domestic market, which is buoyed by Ottawa’s US$140bn infrastructure plans.
Beck, 76, who founded the modern company in the 1950s, is planning to retire once a replacement chief executive is found.
Image: John Beck: "We will be much less aggressive in our international business" (YouTube)