Companies

New combined group to target emerging economies

13 November 2013 | 0 Comments

13 November 2013

Rising 44 places in Engineering News Record’s Top 250 International Contractors in one year is no mean feat, but that’s only the beginning for Italy’s Salini.

After taking over its larger rival Impregilo earlier this year, Salini now sits in 27th place on the ENR list, and it plans to grow even bigger and expand into even more territories by 2016.

Salini launched its takeover bid in March 2013, originally owning just under 30% of Impregilo, with another 30% owned by construction and motorway group Gavio. The company gained control of Impregilo in July and now owns 89% of it. The merger, which becomes official on 1 January 2014, will see a combined group with approximately 32,000 employees and a presence in over 50 countries, the company says.

“I think we have in front of us an enormous market in expansion,” said Salini Impregilo CEO, Pietro Salini. “All the emerging countries are investing a lot into infrastructure and we think that our combined identity will make us one of the largest in the world as a specialist.”

He said the merger could save $134m a year by removing duplication at head office level, and on procurement costs.

Pietro Salini, CEO, Salini Impregilo

In its business plan for 2013-2016, Salini Impregilo expects consolidated revenue to grow 16% on average, reaching $9.9bn in 2016.

Before the merger the firms entered a strategic agreement to collaborate on winning and executing projects and cutting costs while respecting each other’s individuality. Signed in 2012, the deal meant the firms could use each other’s track record and piggy back into new markets and territories. Salini’s core market had been Africa, while Impregilo focussed more on the Middle East and Latin America.

It worked right away. The team’s first joint contract came in January 2013, a $560m contract for the construction of service roads and access routes to a new copper mine near Panama City, Panama – Salini’s first entry into the mining sector.

As partners the pair have won even more major projects.

Most recently, in Saudi Arabia, the group secured a role in the construction of a brand new metro rail system, the biggest public transport system currently under development anywhere in the world.

Salini Impregilo will also head a consortium of Italian companies that will build the first section of a new coastal highway in Libya.

Judging by what they have achieved as team it will be interesting to see what they can do as a single unit.