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JULY-AUGUST 2015 Vol 54 No 6

international construction A KHL Group publication

www.khl.com

SECTOR

Mixing technology P47 REGIONAL REPORT

North America P27 NEWS REPORT

IC 200 P12

SECTOR

Quarrying P35

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KHL OFFICES UNITED KINGDOM (HEAD OFFICE) Southfields, Southview Road, Wadhurst, East Sussex TN5 6TP, UK. Tel: +44 (0)1892 784088 Fax: +44 (0)1892 784086 www.khl.com USA OFFICE KHL Group Americas LLC 3726 East Ember Glow Way, Phoenix, AZ 85050 USA Tel: +1 480 659 0578 e-mail: americas@khl.com SOUTH AMERICA OFFICE KHL Group Américas LLC Manquehue Norte 151, of 1108. Las Condes, Santiago, Chile Tel: +56 2 2885 0321 e-mail: cristian.peters@khl.com CHINA OFFICE KHL Group China Room 768, Poly Plaza, No.14, South Dong Zhi Men Street, Dong Cheng District, Beijing 100027, P.R. China. Tel: +86 (0)10 6553 6676 e-mail: cathy.yao@khl.com

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COMMENT ver the years, our Top 200 league table of the world’s largest construction companies has proved to be a fairly accurate barometer of the state of the industry. In the boom years of the 2000s, revenues for major contractors grew fast, and with that went strong profitability... Although in objective terms, contractors’ margins have never looked particularly impressive. Then came the tough crisis years, when revenues still managed to edge up a little year on year. However, margins were squeezed hard in this period, and they only recovered when stimulus package work started to kick-in around 2010. Today the world economy is in something of a lull following that stimulus spending fuelled boom, and once again our Top 200 study paints a picture of how that has impacted on the industry. Revenues for this group of major construction companies were up last year, but only just. With just a +0.3% increase in aggregate revenues in 2014 (the year our latest study is based on), the industry’s growth was the weakest since the grim year of 2009. More encouraging is the growth in operating profit margin, from 4.65% in 2013, to 4.79%, although this has clearly come through cutting jobs to reduce costs. In the Top 200 iC published last year, we put total employment by the industry’s largest companies at 4.9 million staff. In this year’s edition we are looking at a -6.5% reduction to around 4.6 million staff. I would argue this is all to be expected in a global economic environment where growth last year was at its weakest for perhaps five years. We know construction is cyclical and time and again we see that it tends to ebb and flow with the wider picture for GDP. So what can the Top 200 tell us about the coming years for the global construction industry? The first point I would make is that there is usually only one, or maybe two years of falling profitability among the Top 200 before things start heading back up again. Given that the global economic picture this year is not much brighter than 2014, there may be more poor results to come in 12 months time, but I would still say that the industry has an upturn on the horizon. adline figure hides a wealth of The second key lesson is that the headline d regions of the world. As this different trends in different countries and d its contractors are going from year’s study illustrates, the US market and gional report for more details), strength to strength (see this month’s regional and other countries like the UK and China are delivering increased ractors. amounts of work for their country’s contractors. n market not only recovering, And with the European construction he low oil price, there could be but getting something of a boost from the ar or two for the region’s major something to cheer about in the next year contractors.

Chris Sleight Editor

International Construction (USPS No: 021-895) is published 9 June 2015 by KHL Group and distributed in the US by DSW, 75 Aberdeen Rd, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. Postmaster: send address changes to International Construction, PO Box 437, Emigsville PA 17318-0437.

ISSN No: 0020-6415 USPS No: 021-895 © Copyright KHL Group 2015

The paper in this magazine originates from timberr that is sourced from sustainable forests, managed to strict environmental, social, and economic standards. The he manufacturing mill has both FSC & PEFC certification, tion, and also ISO9001 and ISO14001 accreditation.

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JULY-AUGUST 2015 Vol.54 No.6

international construction I t International ti l C Construction t ti , iincorporating ti Construction Industry International and World Construction, is available free of charge on request to anyone who falls within the controlled circulation criteria. The official issue publication date is 27 July 2015. It is available to anyone who does not meet the criteria at an annual subscription rate of UK£205, US$330, €245. Single copies: UK£15, US$24, €18.

JULY-AUGUST 2015 Vol 54 No 6

INSIDE

international construction A KHL Group publication

SECTOR

P47

OUTSIDE

REGIONAL REPORT

North America P27 NEWS REPORT

IC 200 P12

NEWS

New equipment for the quarrying sector is featured on p.35 of this month’s issue.

The presidents of Odebrecht and Andrade Gutierrez have been arrested in Brazil as part of Operation Carwash – the investigation into bribery and corruption at state oil company Petrobras.

SECTOR

Quarrying P35

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BUSINESS

www.khl.com

Mixing technology

14/07/2015 10:18:20

Chinese state-owned contractor CCCC is to list shares of its US$ 4.5 billion per year dredging business separately on the Hong Kong Stock Exchange

STAFF LIST Editor Chris Sleight BEng (Hons) e-mail: chris.sleight@khl.com Direct tel: +44 (0)1892 786205 Editorial Director Paul Marsden BSc Editorial Team Lindsey Anderson, Alex Dahm, Lindsay Gale, Sandy Guthrie, Laura Hatton, Fausto Oliveira, Cristián Peters, Murray Pollok, D.Ann Shiffler, John Skelly, Anna Sun, Helen Wright, Euan Youdale Advertisement Manager Alister Williams e-mail: alister.williams@khl.com Direct tel: +1 312 860 6775 Corporate Sales David Stowe e-mail: david.stowe@khl.com Direct tel: +44 (0)1892 786217 Production & Circulation Director Saara Rootes Production Manager Ross Dickson e-mail: ross.dickson@khl.com Direct tel: +44 (0)1892 786245 Design Manager Jeff Gilbert Events Design Manager Gary Brinklow Financial Controller Paul Baker Financial Assistant Alison Filtness, Gillian Martin Credit Control Josephine Harewood e-mail: josephine.harewood@khl.com Direct tel: +44 (0)1892 786250 Office Manager Clare Grant e-mail: clare.grant@khl.com Direct tel: +44 (0)1892 786201 Business Development Director Peter Watkinson Circulation Manager Helen Knight Publisher James King

NEWS REPORT

China’s largest contractors continue to strengthen their grip at the top of the league table of the world’s biggest construction companies.

KHL.COM

KHL.com’s latest video discusses the key findings of a report co-produced with Lectura on price, market and machine trends in the European used tracked excavator segment.

ECONOMIC OUTLOOK

The North American construction market is in something of a lull this year as weak oil prices hamper Canada and Mexico and the strong Dollar hurts US exports. However, the strengthening US economy should pull the region up.

REGIONAL REPORT

The US construction market is looking its strongest since the crisis years, and many hope that there is more growth to come.

QUARRYING

35 35

Quarrying equipment tends to be at the larger end of the spectrum, so there is constant pressure to improve fuel efficiency while maintaining or improving performance and production.

MIXING TECHNOLOGY

When it comes to major projects, a steady supply of high-quality asphalt or concrete can be a key ingredient to success. The latest generation of mixing plants can help achieve this while improving environmental performance.

EQUIPMENT MEMBER OF

The Italian construction equipment manufacturers’ association UNACEA has agreed to support the Samoter exhibition, which will be held in Verona in February 2017.

SUBSCRIPTIONS

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WORLD NEWS HIGHLIGHTS

BRAZIL

NEPAL The Asian Development Bank (ADB) has approved US$ 200 million of funding to help Nepal “build back better” after the April 25 earthquake. The Bank said a further US$ 400 million was available for reconstruction work. In addition to the US$ 200 million emergency assistance, a further US$ 50 million is being provided.

Construction chiefs arrested

TURKEY The European Bank for Reconstruction and Development (EBRD) has arranged financing for the development of a € 1.12 billion (US$ 1.25 billion) hospital in Etlik, a suburb of the Turkish capital Ankara. The hospital campus will be designed, built, equipped and managed under a public private partnership (PPP) model by Ankara Etlik Hastane Sag˘lık Hizmetleri ˙Is¸letme Yatırım (Ankara Etlik Health Investment). This private development company is a joint venture between Italian contractor Astaldi and Turkish counterpart Türkerler. The project comprises 11 hospital buildings with 3,566 beds.

UK Nigerian cement magnate Aliko Dangote has said he would like to buy Arsenal football club in London, UK. Mr Dangote is head of Dangote Cement, which has production facilities in Nigeria and surrounding countries. He said once a current industrialisation project is complete, he would look at buying the football club he has been a fan of since childhood. BRAZIL M&T Expo 2015, the largest construction equipment exhibition in Latin America, attracted 45,755 visitors, according to Sobratema, the Brazilian equipment manufacturers trade association which organised the event between 9 – 13 June in Sao Paulo. Sobratema added that some 478 companies exhibited at the show.

UK The Plantworx construction equipment exhibition in Bruntingthorpe, UK drew 14,000 visitors, up +18% on the inaugural event in 2013. The show covered a total of 135,000 m2 at the Bruntingthorpe site and was home to 344 exhibitors from June 2 – 4 for the three-day show. Dates for the next Plantworx exhibition have been set for June 6 – 8, 2017. The venue is yet to be confirmed, but the CEA said it was likely to be the Bruntingthorpe Proving Ground again.

Heads of Odebrecht and Andrade Gutierrez taken into custody in Petrobras bribery investigation. he presidents of Odebrecht and Andrade Gutierrez, two of the largest contractors in Latin America, have been arrested by Brazilian federal police. Marcelo Odebrecht and Octavio Azevedo Marquez were taken into custody as part of the Operation Lava Jato (Operation Carwash) investigation into corruption at Brazilian state oil company Petrobras. The two were arrested in their homes in Sao Paulo, Brazil. Five other arrests were made in what has been the 14th wave of action in Operation Carwash. Warrants have also been issued to seize documents at construction company offices. Odebrecht reacted angrily to the arrests. A company statement expressed “indignation” at the arrest of Mr Odebrecht and four other executives from the company. The statement went on to say, “The court order approving the arrest of our executives and the search and seizure warrants demonstrates that, since the beginning of Lava Jato over a year ago, the Federal Police have not presented, as alleged in the court order, any new evidence that justifies the forceful measures taken, which were completely unnecessary and for that very reason, illegal.” Odebrecht is by far the largest contractor in Brazil and the wider Latin America region. It is ranked no. 67 in iC’s league table of the world’s 200 largest construction companies. Andrade Gutierrez is ranked the third largest contractor in Brazil and the fourth largest in the region by iC sister magazine Construction Latin America. It is no. 147 in iC’s global ranking.

RUSSIA

Troubled industry Even international manufacturers Construction machinery production in Russia by domestic manufacturers is close to collapse, according to a report by research company PMR. It said the sector’s limited financial potential had led under-investment and inadequate R&D. Limited productivity and high running costs had stunted the competitiveness of Russian machinery. In PMR’s report – Construction Machinery Market in Russia 2015 – it said that the cost advantage from lower energy prices had narrowed significantly in recent years, as Russia had been forced to reduce the gap in energy prices as a condition of joining the World Trade Organisation (WTO). Furthermore, it said, with obsolete production facilities in most cases, Russian manufacturers increasingly had to use Western parts in their machines.

do not use production units in Russia at full capacity, said PMR. Caterpillar was the first foreign manufacturer to start production of excavators in Russia – in 2008 – and was followed by Komatsu in 2010, and by Volvo and Hitachi in 2013. PMR said it should be emphasised that although there were plans for Caterpillar, Volvo and Hitachi’s Russian plants to produce up to 2,000 excavators per year, none of the manufacturers assembled even 200 machines in Russia in 2014. In fact, between 2008 and 2014, Caterpillar assembled fewer than 200 excavators every year in Russia, it said. In the case of Komatsu, although its plant in Russia has a total annual production capacity of around 3,000 excavators, PMR said it had not manufactured more than 565 excavators per year since opening in 2010.

Equipment exports down Exports of US-made construction equipment fell -14.9% in first quarter of 2015, compared to the same period last year, according to the US-based Association of Equipment Manufacturers (AEM). Citing US Department of Commerce data, the AEM said equipment worth US$ 3.65 billion was exported in the first quarter, with all regions seeing a fall compared to the first three months of 2014. Most regions saw doubledigit declines, apart from Canada and Europe, where the slide was more moderate. According to AEM director of market intelligence, Benjamin Duyck, the first quarter of 2015 was the 9th consecutive quarter of yearon-year declines in exports of US construction equipment. He said this could partially be explained by the stable US market and the strong Dollar, making US equipment manufacturers less competitive on export markets.

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WORLD NEWS HONG KONG Bouygues has started excavation on the Tuen Mun – Chek Lap Kok tunnel in Hong Kong, using what it says is the world’s largest tunnel boring machine (TBM). The 17.6 m diameter machine was supplied by German manufacturer Herrenknecht. The Tuen Mun – Chek Lap Kok link is part of the wider connectivity project for the Pearl River Delta, which includes the Hong Kong - Zhuhai – Macao bridge. The 5 km long sub-sea tunnel will connect the Hong Kong Boundary Crossing Facilities transportation hub adjacent to Chek Lap Kok international Airport with Tuen Mun on the Northern (mainland) part of Hong Kong. The HK$ 18.2 billion (US$ 2.3 billion) tunnelling contract is being carried out by Bouygues Construction and its Hong Kong subsidiary Dragages, and completion is scheduled for the end of 2018. The overall cost of the Tuen Mun – Chek Lap Kok link construction work, is put at HK$ 44.8 billion (US$ 5.8 billion).

PANAMA

Locks filled Landmark lagoon win CHEC has committed that the The Project to increase the shipping China Harbour Engineering capacity of the Panama Canal has reached another milestone, with the filling of the new locks on both the Atlantic and Pacific side. The commissioning of the new locks is expected to take 90 days, and will include stress testing of the lock gates which were installed in March. The construction consortium responsible for the work, Grupo Unidos por el Canal (GUPC), comprises Sacyr of Spain, SaliniImpregilo of Italy, Jan De Nul of Belgium and Constructora Urban, SA (CUSA) of Panama. Completion of the project is due next year, and the expansion of the canal will allow 400 m long, 14,000 container capacity ‘post-Panamax’ ships to use the channel. According to the client, the Panama Canal Authority (ACP), the expansion project was 89.8% complete as of the end of May. It has seen the excavation of 50 million m3 of material and the pouring of 5 million m3 of concrete.

Company (CHEC) has been named preferred bidder for UK£ 300 million (US$ 460 million) marine works contract on the Swansea Bay Tidal Lagoon project. The scheme in the UK is said to be the world’s first tidal lagoon power plant. The contract will include construction of a 6 mile (9.7 km) lagoon wall in Swansea Bay for the project developer Tidal Lagoon Power Ltd. In addition to this contract, the two parties say they plan to sign a memorandum of understanding for the development of tidal lagoons in Asia. Tidal Lagoon Power also said

project will include around 50% UK content, and it has established a UK subsidiary company ahead of work getting under way. Lin Yi Chong, president and CEO of CHEC said, “CHEC has taken the strategic decision to enter the UK infrastructure investment and construction market, and we see the Swansea Bay Tidal Lagoon, as the cornerstone project. “We have not invested directly into the Swansea Bay project but we made a proposal to do so and will seek opportunities to invest in similar projects in the UK and Europe.”

EVENTS DIARY

2015 Bauma ConExpo Africa September 15 – 18, 2015 Johannesburg, South Africa www.bcafrica.com

BICES September 22 – 25, 2015 Beijing, China www.e-bices.org

ICUEE September 29 – October 1, 2015 Louisville, Kentucky, US www.icuee.com

ConExpo Latin America October 21 – 24, 2015 Santiago, Chile www.conexpolatinamerica.com

World Crane and Transport Summit November 4 - 5 Amsterdam www.khl-group.com/events/wcts

World Demolition Summit November 6 Amsterdam www.khl-group/events/demolitionsummit-2015

Excon November 25 – 29, 2015 Bangalore, India www.excon.in

2016 World of Concrete February 2 – 5, 2016 (Seminars February 1 – 5) Las Vegas, US www.worldofconcrete.com

Bauma April 11 – 17, 2016 Munich, Germany www.bauma.de

Hillhead June 28 – 30, 2016 Buxton, UK www.hillhead.com

Bauma China November 22-25 Shanghai, China www.bauma-china.com

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WORLD NEWS CHINA

New R&D centre Construction equipment

Construction hits seven-year high

Information acquisition KHL Group, the publisher

maker Liugong has opened a new global research & development centre in its home city of Liuzhou, China The company said the investment was a major milestone and would expand its R&D capability. The facility covers 110,000 m² and includes a 22,000 m2 office complex with seats for 1,200 engineers, a testing centre, prototyping facilities, and seven laboratories, as well as outdoor testing facilities. Development began in 2013 and the investment has been CNY 270 million (US$ 43.4 million). Liugong said the new R&D centre will initially focus on major research, development and testing for its earthmoving equipment ranges. One of the first projects will be the completion of research and development, as well as testing the latest H Series wheeled loader models. Liugong also has R&D facilities in India, Poland, the UK and US.

SAUDI ARABIA

Metro start A consortium led by Bechtel has begun tunnelling on Line 1 of the Riyadh Metro in Saudi Arabia. It is set to be the country’s first underground rail system The Bechtel-led consortium, which includes Saudi company, Almabani General Contractors, Middle East-based Consolidated Contractors Company (CCC), and Germany’s Siemens, is responsible for the US$ 10 billion contract for the design, construction, signalling, electrification and integration of Lines 1 and 2, as well as supplying the metro carriages. The work includes 39 stations, two of which are key interchange stations. “The metro, set to be the cornerstone of Riyadh’s new public transport network, will revolutionise how people move around the city,” said Amjad Bangash, Bechtel’s director on the project. “Sending our team’s first tunnel boring machine (TBM) on its underground voyage is a significant step for all.”

Residential and non-residential work surges to take US output to its highest since October 2008. he value of construction put in place for the 12 months to the end of May was US$ 1.04 trillion. This was an +8.2% increase on a year ago and a +0.8% increase on April’s figure, according to the US Census Bureau. The year-on-year growth in residential construction was +8.2%, with this segment of the market rising to US$ 366 billion for the last 12 months. Some US$ 359 billion of this total was private construction activity, with just US$ 6.6 billion coming from public funds. In the US$ 669 billion non-residential sector there was growth almost across the board, with only the public safety, power and water supply construction segments seeing a fall compared to a year ago. The most robust growth was in the manufacturing construction segment, which was up just shy of +70% compared to a year ago at US$ 90 billion. The amusement & recreation, lodging, office and conservation & development construction segments also saw strong growth. While total private construction was up +10.3% year-on-year for a total of US$ 752 billion, public construction was up just +2.8% to US$ 283 billion. Again, the power and public safety segments were down sharply, but this was offset by growth in most other areas. According to the Associated General Contractors of America (AGC), at US$ 1.04 trillion, construction output was the highest it has been since October 2008. The association’s chief economist, Ken Simonson said, “There were solid monthly and year-over-year gains in May for all major construction categories—private non-residential, residential and public. The private segments appear poised to maintain growth throughout the year.”

UAE Van Oord has won an AED 550 million (US$ 150 million) marine engineering contract for the Deira Islands development in Dubai, UAE. The contract was awarded by developer Nakheel, and involves some 23.5 km of coastline and breakwater construction. The two-year contract – stage one of Nakheel’s water edge delivery programme at Deira Islands – includes 8.5 km of beaches, 3.5 km of quay walls and 9.5 km of rock revetments at two of the four Deira Islands. The work also includes a 4 km stretch of waterfront, big enough to accommodate more than 500 yachts and boats, at the 4.5 million m2 south island. Van Oord will also build 2 km of breakwaters to protect the newly-created basin and beachfront. The company will deploy two cutter suction dredgers for the project.

of iC, has acquired international market research and management consultancy company Off-Highway Research. Off-Highway Research specialises in the research and analysis of international construction and agricultural equipment markets, and is the largest company of its kind in the world. The consultancy was formed in 1981 as part of The Economist Intelligence Unit (EIU) and will continue to operate as an independent entity – retaining its brand name – within KHL Group. Terms of the deal were not disclosed. Managing director of OffHighway Research, David Phillips, will continue to lead the company in his current role. KHL managing director James King said, “This is one of the most exciting developments in KHL’s 25 year history. To work with such an internationally respected company as Off-Highway Research is a fantastic opportunity for us. David and his excellent team have built an unparalleled reputation as the world’s leading construction equipment research company and management consultancy.”

Granite appointment Granite Construction has appointed Robert J. Beekhuizen as senior vice president in charge of the company’s Construction and Materials businesses. Granite executive vice president and chief operating officer, Christopher S. Miller said, “Rob is an industry leader with a proven track record of leading a diverse portfolio of projects and delivering operational excellence with a steadfast commitment to safety.” Granite had revenues of US$ 2.28 billion last year. The construction business accounted for US$ 1.19 billion of this, while construction materials came to US$ 264 million.

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BUSINESS NEWS BUSINESS HIGHLIGHTS SWITZERLAND The merger between Lafarge and Holcim has been completed, following a share swap. Shares in LafargeHolcim are now being traded on the Swiss SIX and French Euronext stock exchanges.

CHINA

SAUDI ARABIA

CCCC to spin-off dredging business

Airport expansion

Chinese state-owned contractor to list shares of US$ 4.5 billion per year dredging business

MOZAMBIQUE Cimentos de Moçambique, a subsidiary of Portuguese cement producer Cimpor, has announced plans to invest US$ 250 million in a new integrated cement plant in Nacala, Mozambique. The company’s footprint in Nacala includes two grinding units and limestone reserves. Cimpor said the new cement production would replace imported clinker.

US A joint venture between one of Hochtief’s North American subsidiaries, Flatiron, and Dragados USA has won the US$ 1.23 billion contract to construct a 60 mile (97 km) stretch of the high speed rail between Los Angeles and San Francisco. Hochtief is controlled by Spanish contractor ACS, and Dragados USA is a wholly-owned subsidiary of the company as well. FRANCE US Mining equipment manufacturer Joy Global has acquired Doosan Infracore’s hydraulic breaker and attachment business Montabert. The deal for the France-based company was completed at the start of June for a price of € 110 million (US$ 121 million). Joy Global said Montabert’s revenues for the twelve months to the end of March 2015 were some US$ 100 million.

separately on the Hong Kong Stock Exchange hina Communications Construction Company (CCCC) has announced plans to spin-off its dredging business, with a listing of tradable shares on the Hong-Kong Stock Exchange. CCCC would retain a controlling stake in the company, but its interest would be diluted. The price and value of the CCCC Dredging spin-off has not yet been announced. However, CCCC has confirmed it will retain a controlling interest in the company through non-tradable A-series shares. CCCC’s dredging business achieved sales of CNY 27.8 billion (US$ 4.5 billion) in 2014, making it the largest dredging company in the world in revenue terms. However, most of the work the company carries out is in China. Its backlog as of the end of 2014 was CNY 34.9 billion (US$ 5.58 billion). CCCC itself is the fourth largest contractor in the world according to this month's study of the world’s 200 largest construction companies.

NEW ZEALAND

Vinci acquires HEB

Standard Pacific and Ryland to merge US house builders Ryland and Standard Pacific have agreed to merge in an all-share deal. The new company will have pro-forma sales of some US$ 5.1 billion, making it one of the largest residential developers in the US. Under the terms of the deal, Ryland will be rolled into Standard Pacific by means of a share swap. This will see Standard Pacific shareholders own 59% of the new

entity, while Ryland’s owners will have 41%. Current Standard Pacific CEO, Scott Stowell, will be executive chairman of the new entity. Ryland’s CEO, Larry Nicholson, will be president and CEO of the new company. Annual savings of US$ 70 million to US$ 90 million are expected to result from the merger, and the company is expected to have a value of some US$ 5.2 billion.

AU$ 2.41 2.06 0.216 1.48 0.021 0.011 0.085 0.023 0.357 0.107 0.0012 1.41 1.34

BRL 0.41 4.95 0.520 3.58 0.051 0.027 0.204 0.056 0.861 0.258 0.0028 3.41 3.23

UK£ 0.487 0.202 0.105 0.72 0.010 0.005 0.041 0.011 0.174 0.052 0.0006 0.69 0.652

CNY 4.63 1.92 9.5 6.88 0.098 0.051 0.393 0.108 1.656 0.496 0.0055 6.56 6.21

€ 0.674 0.280 1.38 0.145 0.014 0.007 0.057 0.016 0.241 0.072 0.0008 0.95 0.903

INR 47.4 19.7 97.4 10.23 70.3 0.526 4.02 1.11 16.933 5.072 0.0560 67.05 63.5

YEN 90 37.4 185 19.4 134 1.9 7.64 2.10 32.187 9.641 0.1064 127.46 120.7

Vinci has acquired HEB Construction, which it describes as a leader in the New Zealand construction market. The value of the deal was not disclosed. The 40 year-old company is active in the civil engineering, engineering structures, hydraulic engineering, road, earthworks and marine & port construction markets, among others. HEB Construction employs 750 people and generated revenues of some € 230 million (US$ 260 million) in 2014.

GERMANY

Exchange rates: July 2015 Value of 1: Symbol Australian Dollar AU$ Brazilian Real BRL British Pound UK£ Chinese Yuan CNY Euro € Indian Rupee INR Japanese Yen YEN Mexican Peso MXN Russian Ruble RUR Saudi Riyal SAR South African Rand ZAR South Korean Won KRW Swiss Franc CHF US Dollar US$ For example US$ 1 = AU$ 1.34

A consortium led by Hochtief has won the € 1.3 billion (US$ 1.45 billion) contract to upgrade and expand the King Khaled International Airport in Riyadh, Saudi Arabia. Hochtief has a 55% stake in the contracting consortium, which also includes Shapoorij Pallonji Mideast L.L.C. and Nahdat Al Emaar. The project comprises the redesign, upgrade and expansion of the two existing terminals at the Saudi Capital’s main airport, along with the demolition and refurbishment of other parts of the airport including aprons and fuelling facilities. Hochtief said construction is already underway on the project, with completion planned for May 2019.

Power sale MXN RUR SAR 11.79 42.8 2.80 4.89 17.8 1.16 24.2 88.0 5.75 2.54 9.24 0.604 17.5 63.6 4.15 0.249 0.904 0.0591 0.1309 0.476 0.0311 3.63 0.237 0.275 0.065 4.213 15.307 1.262 4.585 0.300 0.0139 0.0506 0.0033 16.68 60.61 3.96 15.8 57.4 3.75

ZAR 9.34 3.88 19.2 2.016 13.86 0.197 0.1037 0.792 0.218 3.34

KRW CHF US$ 846 0.707 0.746 351 0.293 0.310 1739 1.45 1.53 183 0.152 0.161 1256 1.05 1.11 17.9 0.0149 0.0157 9.4 0.0078 0.0083 72 0.060 0.0633 19.8 0.0165 0.0174 302 0.253 0.267 91 0.076 0.080 0.0110 0.00084 0.0009 13.22 1198 1.056 12.52 1134.1 0.947

German contractor Bilfinger has announced plans to sell its troubled Power division. The company has already shed its infrastructure and construction businesses in the face of a string of profit warnings. The decision came as Bilfinger announced another profit warning. It expects the Power division to see earnings before interest, tax and amortisation (EBITA) to come in at a loss of € 100 million this year, compared to a profit of € 8 million for 2014. The division has annual revenues of some € 1.46 billion and employs 11,000 people.

july-august 2015 internationalconstruction 11

ICON 07 2015 Business News CS.indd 11

14/07/2015 10:24:32

NEWS REPORT The global top 200 Sales

Company

Country

2014 Change

Website

(US$ million)

The global top 200 China’s largest contractors continue to strengthen their grip at the top of the league table of the world’s biggest construction companies. Chris Sleight reports. n last year’s ranking of the world’s 200 largest construction companies, the top three places were held by Chinese contractors. This year it is the top four. China State Construction & Engineering (CSCEC) remains no.1, while China Railway Construction and China Railway Group have swapped places at two and three. But new to the top four is China Communications Construction, which has pushed France’s Vinci into 5th position. As last year, CSCEC is the only US$ 100 billion+ per year contractor on the list, but others are closer behind it now. It is also striking to reflect that the top four Chinese contractors had revenues in 2014, the year on which rankings in the Top 200 are based, of an enormous US$ 375 billion. With all four of these companies – and others in the top 200 – controlled by the state, the might of China as a force in the industry is even more apparent. Elsewhere in the top ten there has not been a great deal of movement, with major European groups like Bouygues, ACS, and its majority-owned German arm Hochtief, up there with the biggest contractor in the Americas, Bechtel, and yet another Chinese state-owned entity, MCC. In the top 20, Japanese residential builders Daiwa House and Sekisui House come into the picture, while the country’s highestplaced general contractor is Obayashi at no. 20. These sit alongside more Chinese, European and US names as well as Korea’s highestplaced contractor, Doosan Heavy Industries & Construction. There were few big leaps of places at this end of the table over the last year. The most notable was Shanghai Construction Group’s move up five places into the top 20, at the expense of Austria’s Strabag. Looking further down into the top 50, there were useful gains for other South Koreans, including the Hyundai, Samsung and Daewoo construction businesses. There was also something of a resurgence apparent among US construction companies, with contractors and engineers like Chicago Bridge & Iron and Jacobs

1 126395 China State Construction & Engineering (CSCEC) 2 96769 China Railway Group 3 93645 China Railway Construction Corporation 4 58214 China Communications Construction 5 51798 Vinci 6 46276 ACS 7 37200 Bechtel 8 35177 Bouygues’ Construction Divisions 9 34288 Metallurgical Corporation of China (MCC) 10 29318 Hochtief 11 26543 Daiwa House 12 21532 Fluor 13 20901 Skanska 14 20400 Sinohydro* 15 18505 Eiffage 16 18108 Shanghai Construction Group 17 18063 Sekisui House 18 17200 Doosan Heavy Industries & Construction 19 17078 Saipem 20 16753 Obayashi 21 16551 Strabag 22 16498 Hyundai Engineering & Construction 23 15994 Kajima Corporation 24 15118 CIMIC Group 25 14857 Taisei Corporation 26 14806 Shimizu Corporation 27 14113 Samsung C&T 28 13365 Technip 29 12975 Chicago Bridge & Iron 30 12695 Jacobs Engineering 31 12676 Lend Lease 32 11876 Balfour Beatty 33 11677 Ferrovial 34 11391 China Gezhouba 35 11363 China Railway Erju 36 10860 Takenaka Corporation 37 10400 Peter Kiewit 38 10212 Bilfinger 39 9703 Bam Group 40 9487 Abengoa 41 9484 Daewoo Engineering & Construction 42 9277 Larsen & Toubro E&C 43 9002 GS Engineering & Construction 44 8819 Daelim 45 8621 Acciona 46 8456 Samsung Engineering 47 8403 FCC 48 8293 NCC Group 49 8025 D R Horton 50 7749 Lennar 51 7545 JGC 52 7303 SNC-Lavalin 53 6926 Spie 54 6790 PCL Construction Group

China

1 

China China

3 1 2 -1

China

5 1

France Spain US France

4 6 7 8

China Germany Japan US Sweden China France China

-1   

10 1 9 11 12 14 15 16 21

-1   1 1 1 5

www.cscec.com.cn www.crec.cn www.crcc.cn www.crbc.com www.vinci.com www.grupoacs.com www.bechtel.com www.bouygues.com www.mccchina.com www.hochtief.de www.daiwahouse.co.jp www.fluor.com www.skanska.com www.sinohydro.com www.eiffage.fr www.shconstruction.cn

Japan South Korea

17  18 

Italy Japan Austria South Korea

22 20 19 27

3  -2 5

Japan Australia Japan Japan South Korea France US US Australia UK Spain China China Japan US Germany Netherlands Spain South Korea

24 13 23 25 29 30 36 33 32 26 38 41 28 39 34 35 42 40 50

1 www.kajima.co.jp -11 www.leighton.com.au -2 www.taisei.co.jp -1 www.shimz.co.jp 2 www.samsungcnt.com 2 www.technip.com 7 www.cbi.com 3 www.jacobs.com 1 www.lendlease.com.au -6 www.balfourbeatty.com 5 www.ferrovial.es 7 www.cggc.cn -7 www.crec.com.cn 3 www.takenaka.co.jp -3 www.kiewit.com -3 www.bilfingerberger.de 3 www.bam.nl  www.abengoa.es 9 www.dwconst.co.kr

India South Korea

48 6 46 3

South Korea Spain South Korea Spain Sweden US US Japan Canada France Canada

43 49 44 45 47 61 65 55 51 62 53

www.sekisuihouse.co.jp www.doosanheavy.com www.saipem.it www.obayashi.co.jp www.strabag.com www.hdec.co.kr

www.larsentoubro.com www.gsconstir.co.kr

-1 www.daelim.co.kr 4 www.acciona.es -2 www.samsungengineering.co.kr -2 www.fcc.es -1 www.ncc.se 12 www.drhorton.com 15 www.lennar.com 4 www.jgc.co.jp -1 www.snc-lavalin.com 9 www.spie.eu -1 www.pcl.com

12 internationalconstruction july-august 2015

ICON 07-08 2015 News Report - Top 200 CS.indd 12

14/07/2015 10:34:46

NEWS REPORT The global top 200 Website

Global trends

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102

4420 4419 4385 4236 4201 4200 4178 4124 4025 3992 3969 3912 3904 3870 3848 3841 3828 3797 3749 3653 3568

103 3517 104 105 106 107 108 109 110 111

3491 3489 3419 3370 3322 3239 3210 3194

123 87 73 69 121 103 122

54 www.impregilo.it 17 www.barratthomes.co.uk 2 www.ohl.es -3 www.aveng.co.za 48 www.kier.co.uk 29 www.interserveplc.co.uk 47 www.cfe.be

74 90 78 84 83 102

-2 13  5 3 21

99 70 86 113 75 82 95 79 93 100 77 132 97 81 88 85 89 96 80 112 92

www.fayat.com www.walshgroup.com www.chiyoda-corp.com www.perini.com www.nvrinc.com www.csci.com.hk

1600 1400

17 www.taylorwimpey.com -13 www.kinden.co.jp 2 www.zueblin.de 28 www.persimmonhomes.com -11 www.boskalis.com -5 www.clarkconstruction.com 7 www.tecnicasreunidas.es -10 www.kandenko.co.jp 3 www.penta-ocean.co.jp 9 www.porr.at -15 www.toda.co.jp 39 www.tollbrothers.com 3 www.mostotrest.ru -14 www.misawa-hd.co.jp -8 www.sacyr.es -12 www.gilbaneco.com -9 www.maeda.co.jp -3 www.veidekke.no -20 www.nippohodo.co.jp 11 www.morgansindall.co.uk -10 www.smcon.co.jp

1200 1000 800 600 400

-10 www.hazama.co.jp 30 www.berkeleygroup.com  www.kumagaigumi.co.jp 9 www.astaldi.com -7 www.murrob.com 5 www.nishimatsu.co.jp -5 www.deme.be -4 www.jilindia.com

5.8%

4.8%

5.2%

4.7%

4.8%

4.6%

4.5% 4.4%

3.7% 3.6%

3% 2%

200

Sales (US$ Billions)

Operating Margin

Engineering moving up along with residential specialists like D R Horton and Lennar. Also worthy of note is Larsen & Toubro’s climb of six places to no. 42, the highest it has ever achieved, and further establishing it as the biggest construction company on the Indian sub-continent.

115 12 www.cnpc.com.cn/cpecc/ 94 135 106 116 101 114 105 107

7% 6.2%

2014

4640 4610 4542 4492 4441 4441

www.ccc.gr

2013

76 77 78 79 80 81

68 

2012

5435 5195 4949 4882 4862 4794 4657

-6 www.laingorourke.com 1 www.volkerwessels.com -6 www.enka.com 2 www.pulte.com 5 www.carillionplc.com -36 www.odebrecht.com

he 2015 global contractors league table is based on revenues achieved in 2014. These came to US$ 1,629 billion, which was a record and made it the thirteenth straight year the group’s sales have grown, albeit by just +0.3%. The graph below and this analysis looks at the revenue and profitability trend for the top 100 contractors, a group for which the fullest data is available. In 2014 these 100 companies achieved aggregate revenues of US$ 1,398 billion, at a profit margin of 4.59%. While revenues were up again, although by only +0.9%, the slip in profit margin is perhaps more indicative of weak industry conditions. There are similarities to the 2008 – 2009 period when revenues still went up year-on-year, despite the ravages of the global economic crisis, but profitability was weaker in 2009 than 2008. Unfortunately the sudden up-tick of 2010 looks unlikely to be repeated in 2016. That was a result of stimulus spending around the world, and there is little or no prospect of a similar initiative in these austere times. Another interesting point on profitability is that although the margin slipped for the top 100 contractors in the last 12 months, the margin for the top 200 as a whole was up from 4.65% in the 2014 edition of the Top 200, to 4.79% in this year’s study. This implies that bigger in revenue terms does not always mean better profits, as the companies placed 101 – 200 in the league table clearly had stronger margins than their larger rivals.

2011

69 70 71 72 73 74 75

56 64 58 67 71 31

Revenues and profits indicate slowdown

2010

68 5500

4 www.emcorgroup.com -4 www.kbr.com  www.peab.se 14 www.whiting-turner.com 1 www.petrofac.com 3 www.haseko.co.jp 5 www.guangshajs.com

2009

5882 5837 5818 5753 5750 5513

59 52 57 72 60 63 66

2008

62 63 64 65 66 67

Emcor Group US KBR US Peab Sweden Whiting-Turner Contracting US Petrofac UK Haseko Japan Guangsha Construction China Group* Laing O’Rourke UK VolkerWessels Netherlands Enka Turkey Pulte Group US Carillion UK Construtora Norberto Brazil Odebrecht* Consolidated Contractors Greece Company (CCC)* Salini Impregilo Italy Barratt Developments UK Obrascon Huarte Lain Spain Aveng South Africa Kier Group UK Interserve UK Compagnie D’Entreprises Belgium CFE SA Fayat Group France Walsh Group US Chiyoda Japan Tutor Perini US NVR US China State Construction Hong Kong International Holding Taylor Wimpey UK Kinden Japan Ed Züblin Germany Persimmon UK Boskalis Westminster Netherlands Clark Construction* US Tecnicas Reunidas Spain Kandenko Japan Penta-Ocean Construction Japan Porr Austria Toda Japan Toll Brothers US Mostotrest Russia Misawa Homes Japan Sacyr Vallehermoso Spain Gilbane Building US Maeda Corporation Japan Veidekke Norway Nippo Japan Morgan Sindall UK Sumitomo Mitsui Japan Construction China Petroleum China Engineering & Construction* Hazama Ando Japan Berkeley Group UK Kumagai Gumi Japan Astaldi Italy Murray & Roberts South Africa Nishimatsu Construction Japan DEME Belgium Jaiprakash Associates India

2004

6425 6366 6363 6347 6237 6064 6000

Losing ground * = estimate

55 56 57 58 59 60 61

2007

2014 Change

2006

Country

2005

Company

579 695 807 927 1048 1054 1096 1242 1291 1385 1398

Sales (US$ million)

But where there are climbers there also have to be fallers. Among those losing places this year are contractors which have made headlines for the wrong reasons, such as Balfour Beatty, Bilfinger and CIMIC (formerly Leighton). They have had issues with under-performing projects and profit warnings in recent years.

july-august 2015 internationalconstruction 13

ICON 07-08 2015 News Report - Top 200 CS.indd 13

14/07/2015 10:26:15

WORLD NEWS The global top 200 Sales

Company

Country

2014 Change

Website

* = estimate

(US$ million)

112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135

3189 3144 3142 3107 3075 3000 2941 2919 2909 2823 2791 2712 2679 2668 2654 2632 2600 2596 2593 2517 2501 2482 2478 2476

136 137 138 139 140

2470 2443 2440 2435 2401

Implenia Nexity Mota-Engil Brookfield Multiplex PanaHome McCarthy Building Toyo Engineering (TEC) Jan De Nul* Galliford Try Isolux Corsan Van Oord Lemminkäinen ICA Camargo Corrêa Besix Keller Group DPR Construction* Ryland Group Glavstroy* Swietelsky Sigdo Koppers Tokyu Construction Heijmans Lotte Engineering & Construction* M.A.Mortenson* Bellway ISG Standard Pacific KB Home

Switzerland France Portugal Australia Japan US Japan Belgium UK Spain Netherlands Finland Mexico Brazil Belgium UK US US Russia Austria Chile Japan Netherlands South Korea

111 98 120 117 109 124 139 128 147 104 156 126 143 131 119 151 138 159 118 171 91 142 130 152

-1 www.implenia.com -15 www.nexity.fr 6 www.mota-engil.pt 2 www.brookfieldmultiplex.com -7 www.panahome.co.jp 7 www.mccarthy.com 21 www.toyo-eng.co.jp 9 www.jandenul.com 27 www.gallifordtry.plc.uk -17 www.isoluxcorsan.com 34 www.vanoord.com 3 www.lemminkainen.com 19 www.ica.com.mx 6 www.camargocorrea.com.br -7 www.besix.com 24 www.keller.co.uk 10 www.dpr.com 30 www.ryland.com -12 www.glavstroy.ru 40 www.swietelsky.at -41 www.sigdokoppers.cl 9 www.const.tokyu.com -4 www.heijmans.nl 17 www.lottecon.co.kr

US UK UK US US

150 191 166 173 161

14 www.mortenson.com 54 www.bellway.co.uk 28 www.isgplc.com 34 www.standardpacifichomes.com 21 www.kbhome.com

CIMIC is likely to fall further in next year’s league table following a string of major divestments at the end of 2014. However, these were designed to streamline the company and improve its profitability, underlining the fact that as far as shareholders are concerned, big is not always better. In 69th position this year is Salini Impregilo, which shares the prize with UK house builder Bellway for the most places climbed up the league table – both are up 54 positions compared to the 2014 rankings. In Salini Impregilo’s case, this reflects its first full year of combined revenue figures following the merger of Salini and Impregilo. Meanwhile 132nd-placed Bellway is riding on the boom in the UK residential market, particularly around London and the South East. This market shift has also lifted its rivals such as Barratt Developments (70th, up 17 places), Taylor Wimpey (82nd, up 17 places), and Persimmon, (85th, up 28 places) to name three other UK house builders. On the other hand, the big fallers in this year’s top 200 league table have tended to be contractors and engineers exposed to the oil & gas sector. Business for many of these has clearly suffered in the wake of the global oil price slump of last year, and this is reflected in the rankings for companies like Techint. Likewise, a number of contractors in troubled markets like Russia, Brazil and commodity-price-dependent economies like Chile or South Africa have fallen this year. This is an area where in some cases iC has made estimates of revenues, as many of these companies are privately owned, and tend not to disclose results when they look ugly.

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ICON 07-08 2015 News Report - Top 200 CS.indd 14

14/07/2015 14:17:15

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7/14/2015 4:45:06 PM 14/07/2015 16:03:27

NEWS REPORT The global top 200

Analysis by country Which country’s contractors are the biggest and most profitable? Country

China US Japan France Spain South Korea UK Germany Sweden Italy Netherlands Australia Austria Canada India Brazil Belgium Russia South Africa Turkey Greece Norway Finland Mexico Others ALL

No. of companies

New

Down

Same

11 34 29 7 10 10 19 6 4 7 8 3 3 4 4 5 4 4 3 3 2 2 2 2 14 200

1 3 1 3 8

8 22 10 3 4 6 14 4 2 4 5 2 2 2 3 2 2 1 1 1 1 1 6 106

2 10 12 3 4 3 2 2 1 2 3 1 1 4 2 2 2 2 3 2 1 1 5 70

1 2 6 1 2 1 1 1 1 16

hinese construction companies took their biggest ever slice of the Top 200’s revenues last year, with their aggregate sales coming to US$ 480 billion – 29.5% of the total. This compared to US$ 441 Others 14.2% billion, or 27.2% of the total in the 2014 edition of the league table. Italy 2.0% The only other national groups to see their share of revenues rise was South Sweden 2.3% Korea – up from 4.7% last year to 5.5% in this year’s table – and the UK, with a 0.8 Germany 3.1% percentage point rise to 4.8%. Another key factor for the Chinese contractors is that their profitability UK 4.8% has improved. Their average operating margin according to this year’s Top 200 South Korea 5.5% study is 4.40%, compared to 4.0% in

the 2014 edition. This has helped pull up the overall margin for the Top 200 group form 4.65% last year to 4.79% in the 2015 Spain 6.3% study. This gain in profits has come without any significant rise in revenues. With total revenues France 8.2% of US$ 1,629 billion in this year’s study, the average Top 200 company had sales of US$ 8.15 billion in 2014, the year from which financial data is taken to rank the contractors in the league table. That is only a +0.3% increase from the 2014 edition of the league table (based on 2013 data), when total revenues came to US$ 1,625 billion and the average contractor had

Total Sales (US$ mill.)

% of Total

480,090 29.5% 198,682 12.2% 195,533 12.0% 133,555 8.2% 102,073 6.3% 90,246 5.5% 77,862 4.8% 49,946 3.1% 37,630 2.3% 32,855 2.0% 31,169 1.9% 30,901 1.9% 23,060 1.4% 18,270 1.1% 15,679 1.0% 14,088 0.9% 13,440 0.8% 10,603 0.7% 10,580 0.6% 9,912 0.6% 7,549 0.5% 5,367 0.3% 5,072 0.3% 4,840 0.3% 30,738 1.9% 1,629,739 100.0%

Average Average Average Average Sales Operating Headcount Sales/ (US$ mill.) Profit Margin Employee (US$ mill.) (US$) 43645 2475 4.40% 123,365 $386,311 5844 403 6.83% 11,933 $502,493 6743 286 4.34% 7,559 $892,003 19079 1629 7.58% 67,064 $284,493 10207 437 3.92% 47,917 $213,019 9025 178 1.83% 4,848 $1,861,542 4098 236 5.76% 10,061 $420,382 8324 9 0.08% 28,750 $289,539 9407 417 4.43% 22,727 $413,930 4694 235 4.53% 15,534 $302,158 3896 134 3.25% 9,471 $411,361 10300 454 3.26% 17,684 $582,455 7687 18 0.17% 30,330 $582,455 4568 163 3.36% 15,918 $286,952 3920 572 14.60% 26,668 $174,952 2818 268 14.30% 29,832 $103,846 3360 190 5.41% 5,641 $604,545 2651 267 9.99% 18,169 $178,798 3527 81 2.30% 23,089 $152,749 3304 466 11.84% 18,860 $208,482 3775 111 5.42% 58,398 $64,635 2683 102 3.82% 4,527 $592,766 2536 81 3.18% 5,315 $477,186 2420 284 11.74% 20,639 $117,249 2196 8149 427 4.79% 22,982

sales of US$ 8.12 billion. So on average revenues per contractor have only gone up an average of US$ 30 million in the last year. However, what has changed is employment in the industry, and the evidence points to jobs being cut to improve profitability. Although not every company in the top 200 reports employee numbers, data is available for about 95% of those in the ranking. They had an average size China 29.5% of 22,982 staff in this year’s Top 200, implying total employment of some 4.6 million people. That is down some -6.5% on the figures in the 2014 edition of the study, when the average contractor employed 24,583 people for an implied total of 4.9 million staff.

US 12.2%

Winners & losers

Chinese contractors may have the biggest slice of the pie, but the prize for most improved must go to the UK this year, with the most number of new contractors in the top 200 Japan 12.0% (three) and 14 out of the other 16 companies placed in the top 200 improving on their places from last year. The US also did well, with 22 out of 34 companies improving their position. On the down side all of the Canadian and South African contractors in this year’s league table lost places compared to a year ago.

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NEWS REPORT The global top 200 Sales

Company

Country

2014 Change

Website

(US$ million)

* = estimate

141 2395 142 2391 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177

2376 2367 2360 2355 2332 2330 2320 2301 2276 2275 2255 2208 2201 2200 2180 2160 2123 2083 2073 2071 2064 2050 2049 2048 2046 1938 1902 1878 1878 1862 1825 1811 1810 1806 1800

178 179 180 181 182 183 184

1787 1764 1728 1724 1711 1696 1682

185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200

1665 1613 1607 1603 1582 1570 1569 1547 1527 1517 1515 1513 1502 1500 1481 1477

LSR Russia Hanjin Heavy Industries & South Korea Construction WBHO South Africa Aecon Group Canada YIT Finland Strukton Groep Netherlands Andrade Gutierrez Brazil Hensel Phelps* US J.E. Dunn Group* US McDermott International US Teixeira Duarte Portugal Granite Construction US TBI Holdings BV* Netherlands Grana y Montero Peru Maeda Road Construction Japan Brasfield & Gorrie* US Meritage Homes US Homex Mexico Max Boegl Germany Goldbeckbau Germany JM Sweden Willmott Dixon UK Hovnanian Enterprises US Maire Tecnimont Italy Ell aktor Greece Renaissance Construction* Turkey Tekfen Holding Turkey Okumura Corporation Japan CTCI Taiwan Toa Japan MRV Brazil Swinerton US Bauer Germany Graham Construction* Canada Comsa EMTE Spain Halla South Korea Techint Engineering & Italy Construction* Takamatsu Japan Costain Group UK Wates Group UK Shikun & Binui Israel RZD Stroy Russia Galvão Engenharia Brazil Hindustan Construction India Company (HCC) IJM Malaysia Africa Israel Investments Israel Trevi SpA Italy Parsons Corporation US Zachry US Budimex SA Poland AF Gruppen Norway Ballast Nedam Netherlands Lanco Infratech India Per Aarsleff AS Denmark Pizzarotti Italy Salfacorp Chile Nippon Road Japan Black & Veatch* US Bloor Holdings UK Italian-Thai Development Thailand

164 23 141 -1

www.lsrgroup.ru www.hanjinsc.com

137 125 145 160 136 154 155 133 157 148 144 153 140 146 183 149 168 193 174 200 182 163 198 175 165 169 190 170 187 186 178 172 162 179 129

-6 www.wbho.co.za -19 www.aecon.com  www.yit.fi 14 www.strukton.com -11 www.agsa.com.br 6 www.henselphelps.com 6 www.jedunn.com -17 www.mcdermott.com 6 www.tduarte.pt -4 www.graniteconstruction.com -9 www.tbi.nl -1 www.granaymontero.com.pe -15 www.maedaroad.co.jp -10 www.brasfieldgorrie.com 26 www.meritagehomes.com -9 www.homex.com.mx 9 www.max-boegl.de 33 www.goldbeckbau.de 13 www.jm.se 38 www.willmottdixon.co.uk 19 www.khov.com -1 www.mairetecnimont.it 33 www.etae.com 9 www.rencons.com -2 www.tekfen.com.tr 1 www.okumuragumi.co.jp 21 www.ctci.com.tw  www.toa-const.co.jp 16 www.mrv.com.br 14 www.swinerton.com 5 www.bauer.de -2 www.graham.ca -13 www.comsaemte.com 3 www.halla.co.kr -48 www.techint.it

184 189 134 192 199

6 www.takamatsu-const.co.jp NEW www.costain.co.uk NEW www.wates.co.uk 8 www.hch.co.il -48 www.rzdstroy.ru 9 www.queirozgalvao.com 15 www.hccindia.com

176 195 197 127 177 194 196 188 158 167 -

-9 www.ijm.com 9 www.africa-israel.com 10 www.trevifin.com -61 www.parsons.com -12 www.zachry.com NEW www.budimex.com.pl 3 www.afgruppen.no 4 www.ballast-nedam.com -5 www.lancogroup.com NEW www.aarsleff.com NEW www.pizzarotti.it -38 www.salfacorp.com NEW www.nipponroad.co.jp -31 www.bv.com NEW www.bloorhomes.com NEW www.italian-thai.co.th

And in some cases, things could get worse for these companies. The most obvious candidates are Brazil’s leading contractors, which are all suffering to some extent from the fallout of the Operation Carwash investigation into bribery and corruption at the state-owned oil company Petrobras. This scandal has already seen OAS – 185th last year, not ranked this year – and Galvao (183rd this year) file for bankruptcy protection.

New additions As ever, the foot of the Top 200 league table features a range of new entrants, the highest-placed of which is Costain of the UK in 179th place. In fact, the UK has the most new entrants this year, with three out of the eight. The 200th placed construction in this year’s league table is Thailand’s largest contractor, Italian-Thai developments, with revenue of US$ 1.48 billion. This raises an interesting point. Although total revenues for the top 200 were up a little at US$ 1,630 billion this year from US$ 1,624 billion in the 2014 edition, the 200th ranked company last year had revenues of US$ 1.63 billion – about 10% higher than Italian-Thai Development’s. With overall revenues for the top 200 rising, but smaller companies being included, this might suggest that the bigger companies are growing faster than the smaller ones. However, as profitability data suggests (see ‘Global trends’, p.13), the bigger contractors have lower margins on average than those ranked 101 - 200 in this year’s league table. There could be many reasons fro that, from different business models to exposure to different markets and sectors.

Next year The key driving force behind movements in the global top 200 tends to be market factors in each contractors’ home country. So the message is that for the big contractors of tomorrow, look for the growth markets of today. China, the UK and US are probably still among the more attractive of the major construction economies, so their companies should continue to climb the league table. The long-awaited but still rather lacklustre recovery in mainland Europe could also provide a lift to some of the region’s key players. On the downside, it seems inevitable that troubled markets like Russia and parts of Latin America will push down these countries’ construction companies in years to come. iC

Methodology How the league table is compiled

he Top 200 league table is a ranking of the world’s largest construction companies, based on sales revenues in 2014 – either full or financial years, depending on individual accounting practices. It is compiled from a range of sources, including audited annual accounts, companies’ own statements of revenues and information from reputable third parties. In some cases iC has estimated company revenues. The ranking is based on sales in US Dollars and the exchange rates were average figures for 2014. While every care is taken to ensure information in the Top 200 league table is accurate, iC cannot be held responsible for any inaccuracies or errors. If you feel your company should be included in the league table, please contact iC’s editor, Chris Sleight at chris.sleight@khl.com

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14/07/2015 10:26:38

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14/07/2015 09:25:59

KHL.COM INSIDE KHL.COM NEWS REPORT The global top 200 Sales

Company

Country

2014 Change

CONSTRUCTION

Website

(US$ million)

1 126395 China State Construction & Engineering (CSCEC)* 2 96769 China Railway Group 3 93645 China Railway Construction Corporation 4 58214 China Communications Construction 5 51798 Vinci 6 46276 ACS 7 37200 Bechtel 8 35177 Bouygues’ Construction Divisions 9 34288 Metallurgical Corporation of China (MCC) 10 29318 Hochtief 11 26543 Daiwa House 12 21532 Fluor 13 20901 Skanska 14 20400 Sinohydro* 15 18505 Eiffage 16 18108 Shanghai Construction Group 17 18063 Sekisui House 18 17200 Doosan Heavy Industries & Construction 19 17078 Saipem 20 16753 Obayashi 21 16551 Strabag 22 16498 Hyundai Engineering & Construction 23 15994 Kajima Corporation 24 15118 CIMIC Group 25 14857 Taisei Corporation 26 14806 Shimizu Corporation 27 14113 Samsung C&T 28 13365 Technip 29 12975 Chicago Bridge & Iron 30 12695 Jacobs Engineering 31 12676 Lend Lease 32 11876 Balfour Beatty 33 11677 Ferrovial 34 11391 China Gezhouba 35 11363 China Railway Erju 36 10860 Takenaka Corporation 37 10400 Peter Kiewit 38 10212 Bilfinger 39 9703 Bam Group 40 9487 Abengoa 41 9484 Daewoo Engineering & Construction 42 9277 Larsen & Toubro E&C 43 9002 GS Engineering & Construction 44 8819 Daelim 45 8621 Acciona 46 8456 Samsung Engineering 47 8403 FCC 48 8293 NCC Group 49 8025 D R Horton 50 7749 Lennar 51 7545 JGC 52 7303 SNC-Lavalin 53 6926 Spie 54 6790 PCL Construction Group

China

1 Â

China China

3 Ã1 2 Ä-1

China

5 Ã1

France Spain US France

4 Ä-1 6 Â 7 Â 8 Â

China Germany Japan US Sweden China France China

10 Ã1 9 11 12 14 15 16 21

Ä-1 Â Â Ã1 Ã1 Ã1 Ã5

Japan South Korea

17 Â 18 Â

Italy Japan Austria South Korea

22 Ã3 20 Â 19 Ä-2 27 Ã5

Japan Australia Japan Japan South Korea France US US Australia UK Spain China China Japan US Germany Netherlands Spain South Korea

24 13 23 25 29 30 36 33 32 26 38 41 28 39 34 35 42 40 50

India South Korea

48 Ã6 46 Ã3

South Korea Spain South Korea Spain Sweden US US Japan Canada France Canada

43 49 44 45 47 61 65 55 51 62 53

www.cscec.com.cn www.crec.cn www.crcc.cn

www.vinci.com www.grupoacs.com www.bechtel.com www.bouygues.com

CRANES & LIFTING

www.mccchina.com www.hochtief.de www.daiwahouse.co.jp www.fluor.com www.skanska.com www.sinohydro.com www.eiffage.fr www.shconstruction.cn

www.khl.com/sector/cranes/ News from the Cranes Sector

www.sekisuihouse.co.jp www.doosanheavy.com www.saipem.it www.obayashi.co.jp www.strabag.com www.hdec.co.kr

Ã1 www.kajima.co.jp Ä-11 www.leighton.com.au Ä-2 www.taisei.co.jp Ä-1 www.shimz.co.jp Ã2 www.samsungcnt.com Ã2 www.technip.com Ã7 www.cbi.com Ã3 www.jacobs.com Ã1 www.lendlease.com.au Ä-6 www.balfourbeatty.com Ã5 www.ferrovial.es Ã7 www.cggc.cn Ä-7 www.crec.com.cn Ã3 www.takenaka.co.jp Ä-3 www.kiewit.com Ä-3 www.bilfingerberger.de Ã3 www.bam.nl Â www.abengoa.es Ã9 www.dwconst.co.kr www.larsentoubro.com www.gsconstir.co.kr

Ä-1 www.daelim.co.kr Ã4 www.acciona.es Ä-2 www.samsungengineering.co.kr Ä-2 www.fcc.es Ä-1 www.ncc.se Ã12 www.drhorton.com Ã15 www.lennar.com Ã4 www.jgc.co.jp Ä-1 www.snc-lavalin.com Ã9 www.spie.eu Ä-1 www.pcl.com

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www.khl.com/sector/construction/ News from the Construction Sector

www.crbc.com

DEMOLITION www.khl.com/sector/demolition/ News from the Demolition Sector

Excavator market video

ACCESS www.khl.com/sector/access/ News from the Access Sector

RENTAL www.khl.com/sector/rental/ News from the Rental Sector

14/07/2015 10:26:06

Top 200

KHL.com’s latest video discusses the key findings of

A new video has been added to the www.khl.com Videozone to complement the annual ranking of the world’s 200 largest construction companies (p. 12 of this issue). In this video, iC editor Chris Sleight discusses the most significant aspects of this year’s league table and what they mean for the industry. Chinese contractors strengthened their dominance at the top of the Top 200 in this year’s ranking with five companies in the top ten, including places one to four. However, there was also good growth for many US and UK construction companies on the back of resurgent domestic markets. By the same token, there were slides down the table for contractors from more troubled markets, as well as individual companies with their own specific problems.. Overall the sector’s health looks unchanged compared to a year ago. The Top 200’s total revenues were almost unmoved at US$ 1,630 billion, and profitability was up a little, with an operating margin of 4.79%, compared to 4.65% in last year’s study. However, this improvement in operating profit seemed to come through job losses among other cost-cutting measures. Employment in the Top 200 was estimated to be down almost -7% in this year’s study - based on 2014 figures - compared to a year ago. For additional information on the Top 200, a report is available to buy from www.khl.com/informationstore covering the last five years of the study.

a report co-produced with Lectura on price, market

HEAVY TRANSPORT www.khl.com/sector/heavy-transport/ News from the Heavy Transport Sector

NEWS www.khl.com/news/ Breaking news

and machine trends in the European used tracked

BUSINESS & FINANCE ★UPDATED

excavator sector HL Group and market data specialist Lectura have teamed-up to produce a unique new report, The European used tracked excavator market. The 60-page document draws on information from some 50,000 used crawler excavators offered for sale in Europe over a five year period from the start of 2010 to the end of 2014 to provide analysis of key market trends. Drawing on data posted on Internet marketplaces and through on-line and off-line auction companies, this report looks at the European market in terms of five key weight classes of machine, from ‘midi’ excavators up to large earthmoving, quarrying and mining machines weighing as much as 100 tonnes. Contents include price trends, depreciation and market volumes, market analysis by five key weight categories; 5.7 – 12 tonnes, 12 – 18 tonnes, 18 – 25 tonnes, 25 – 40 tonnes and 40 – 100 tonnes, in-depth analysis of Europe’s five largest markets – Germany, the UK, France, the Netherlands and Italy with an overview of leading brands by weight class and by country. The European used tracked excavator market is available to buy in English and German, from both KHL’s and Lectura’s websites.

www.khl.com/business-and-finance/ Breaking business and finance news EQUIPMENT NEWS ★NEW www.khl.com/equipment-news/ New equipment launches PROJECT NEWS ★NEW www.khl.com/project-news/ The latest projects from around the world FEATURES ★NEW www.khl.com/features/ Find the latest features from all KHL Group’s magazines

CE BAROMETER www.khl.com/ce-barometer/ Construction Europe’s unique gauge of business confidence

E-NEWSLETTER www.khl.com/enewsletter/ Subscribe to KHL.com’s e-newsletters

USED CRANES www.khl-group.com/khlcranemarket/ KHL.com’s on-line crane market

Monthly podcast

DIRECTORIES

Every issue of iC is accompanied by a podcast, which can be downloaded from iTunes for free. Alternatively you can listen to it on the Podcast page of www.khl.com, or click on the image below in the iPad edition of the magazine. Each podcast sees iC editor Chris Sleight look at key stories, including the news making the headlines at the front of the magazine to more in-depth discussions stemming from features. Go to ‘Podcasts’ under the ‘Audio & Video’ tab of www.khl.com or scan the QR code to access the latest edition.

www.khl.com/directories/ Download or buy one of KHL’s unique Directories EXHIBITIONS ★UPDATED www.khl.com/exhibitions/ KHL.com’s global exhibition diary

ASSOCIATIONS www.khl.com/associations/ KHL.com’s global associations database

SUBSCRIBE www.khl.com/subscriptions/ Subscribe to any or all of KHL Group’s international construction magazines NEWS FEEDS ★NEW www.khl.com/feeds/ Subscribe to one of 17 RSS feeds

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ECONOMIC OUTLOOK Energy impact

Energy impact The North American construction market is in something of a lull this year as weak oil prices hamper Canada and Mexico and the strong Dollar hurts US exports. However, the strengthening US economy should pull the region up. Scott Hazelton reports he North American construction market has been hampered by weak oil prices, which have had different impacts on the three economies of Canada, Mexico and the US. In addition, the US had a dreadful first quarter due to some one-off events - unusually severe weather and strikes at West coast ports - as well as low oil prices compounded by a the strong Dollar. However, the data for the second quarter has been positive, particularly job creation, and IHS Global Insight believes the US economy is poised for moderate growth over the remainder of the year. In Canada the energy sector is a larger share economy and its weakness will continue to weigh on the construction sector. Oil is also important to Mexico, but more critical is its trade ties to the US, which will improve with the strengthening economy to help offset some of the drag from the energy sector. Assessing the degree to which the energy sector has hit US construction markets depends on both the definition and the data source. For example, the US Bureau of Economic Analysis includes mines and oil wells as construction activity; activity IHS Global Insight expects to contract nearly -30% compared to 2014. Given the size of this segment, that would translate into virtually zero growth for US construction. However, the US Census Bureau construction series excludes mines and oil wells and is expected

to grow +2.5% in real terms in 2015, even given the weak start to the year. The US residential sector is still in recovery mode, with the level of activity some way from typical levels. Housing starts improved to 1 million units in 2014 and are expected to reach 1.1 million in 2015. However, they will not attain the healthy 1.5 million unit range until 2017. Given pent-up demand, we could then see several years of 1.5 to 1.6 million starts from then onwards.

Non-residential Recent history and the outlook for the nonresidential segment is better. The US economy has regained the jobs lost during the crisis years and needs new construction to accommodate further growth. This will see a shift from refurbishment of existing space for new tenants to groundbreaking for new buildings. IHS Global Insight expects double-digit growth in the office, lodging and warehousing segments over the next two years as a result. Construction linked to retail will not be as strong, as income gains are modest and consumer spending remains cautious. Retail is one segment where the outlook may feature more renovation and less new construction as the segment was overbuilt, and some large national retailers are closing stores or cutting their floor space. Construction of manufacturing facilities is the

Canada

North American Construction growth 6% 4% 3% 0% -2% -4% 2014

2015 Residential

2016 Non-residential

weak link in the private sector. The strong US Dollar, combined with weaker growth in key emerging markets will reduce the potential for exports, while improving the affordability of imports. For 2015, industrial construction will be driven by a number of large, ongoing projects, but uncertainty around energy prices and currency exchange will delay new project starts and lead to a contraction in 2016. The US institutional construction sector offers a mixed outlook. Fiscal restraint is the current policy, and construction of government buildings will be stagnant for the next two years at least. Health care construction in the US contracted for the past two years, but is set for renewed growth. However, the Affordable Care Act, which will add more individuals to the health care system, and put a focus on preventative care should drive growth. Fiscal restraint is taking the greatest toll on infrastructure spending with at best low single digit growth over the coming years. The current Highway Bill offers no increases in funding at a federal level, while statesâ&#x20AC;&#x2122; finances are only improving slowly, leaving little room for investment in infrastructure. Some modest rebound to street, water and sewer construction will accompany the stronger housing outlook, but the weak energy sector is also limiting opportunities for pipeline and rail expansion.

2014-19 Infrastructure

2019-24

Energy production is a larger share of the Canadian economy than for the US, so the oil price decline is taking a larger toll. While improved exports and consumer buying power will keep GDP growth at +1.9% in 2015, both residential and nonresidential fixed investment will contract. Residential investment will fall -1.1%, while non-residential will fall -3.5% with the greatest impact on structural activity. Even with some infrastructure growth, the negative momentum will create a significant contraction in 2015 for construction spending. But assuming energy prices recover even modestly, investment in Canadaâ&#x20AC;&#x2122;s oil sands projects will become profitable again in 2016, and growth should resume. However, the medium to long term view for Canada is one of quite modest growth.

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ECONOMIC OUTLOOK Energy impact

IHS Global Insight

US construction growth by segment 5%

Recognised as the most consistently accurate forecasting company in the world, IHS Global Insight has over 3,800 clients in industry, finance, and government with revenues in excess of US$ 80 million, 5,100 employees and 50 offices around the world in 30 countries. 80% of Fortune 500 companies are customers of IHS Global Insight. â&#x2013; For more information on matters discussed in this article or Global Insightsâ&#x20AC;&#x2122; services, visit www.globalinsight.com or contact Scott Hazelton in the US on +1 781 301 9044 or at scott.hazelton@ihsglobalinsight.com

4% 3% 2% 1% 0% -1% -2% -3% -4% 2014

World

Energy is vital to Mexico as well, however, the country should see construction growth in 2015. First, low oil prices are a net plus to the US economy as a whole, and Mexico will benefit from the growth in trade which will stem from that (especially at current exchange rates), capital inflows, and remittances. In addition, while construction linked to stimulus spending will end in 2015, the tail-

2015

Western Europe

2016

United Kingdom

end effects of previous spending on public infrastructure will support growth. Oil production has been declining in Mexico regardless of global prices, but constitutional changes will open the hydrocarbon industry to foreign investment which will translate into longterm growth. In addition, global automakers are investing in substantial new capacity in Mexico, with Toyota now building a new plant in Guanajuato. The downside for Mexico remains security risks

Average 2014-2019

France

Germany

Average 2019-2024

Spain

Italy

and corruption scandals that are taking a toll on business sentiment and investment.

Outlook The North American construction market continues to grow, dominated by the US recovery. While Canada poses some short term challenges, these are offset by long term potential from Mexico. Even so, the story will be the US, which will be among the world leaders in construction growth in 2016 and likely into 2017. iC

ENHANCING PERFORMANCE AND EFFICIENCY THROUGH

ENGINEERING DESIGN & PRODUCT DEVELOPMENT construction@nylacast.com www.nylacast.com/construction

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MINING IN

CONDITIONS AS TOUGH AS

MARS SURFACE MINING MACHINE IMPROVES EFFICIENCY, SAFETY

The Atacama Desert in South America is probably the closest thing to Mars found on Earth. That’s not an exaggeration. NASA has tested instruments in the desert for use on Mars missions, and ﬁlm crews have used it as a stand-in for the red planet. The Atacama Desert, which stretches approximately 600 miles (965.6 km) from northern Chile to just south of the border with Peru, is considered to be the driest place on Earth. Parts of it have never received any recorded rain, resulting in an extraterrestriallike landscape void of plants and animals in those regions. While a Mars rover may not be roaming the desert ﬂoor, Vermeer mining equipment is. That’s because Atacama is rich in minerals, including copper and sodium nitrate. Also prevalent are reserves of caliche, which is a sedimentary rock composed of hardened deposits of calcium carbonate cemented together with other material.

to an innovative surface mining approach using a machine manufactured by Vermeer, based in Pella, Iowa (USA). According to Jose Huenche, mining operations manager with Atacama Minerals Chile, the Vermeer T1255 Terrain Leveler® surface excavation machine (SEM) is more efﬁcient and effective, and eliminates the additional processing steps and equipment often required to standardize irregular particle size resulting from blasting. “The Vermeer surface excavation machine is an efﬁcient one-pass process,” Huenche says. “It produces a more consistent particle size that we can better control. Drilling and blasting results in irregular and unpredictable particle sizes. Also, the useful material often gets polluted by other caliche impurities from blasting, so there is a lot of dilution in the process.”

“We have found the Terrain Leveler SEM to be the most cost-effective and efficient way to mine the caliche,” Huenche says. “Since we began using the excavation machine, our production rates have increased significantly with less equipment and reduced expense.” Another benefit of the Vermeer Terrain Leveler SEM is improved safety. Eliminating the extra steps needed to haul particle to crushers reduces the risk of an accident. Plus, there is no drilling and blasting. “There are no explosives, no flying rock and minimal ground disturbance,” Huenche says. “Working with explosives is dangerous. It makes us feel good knowing our workers don’t have to be exposed to that.”

Vermeer and its surface mining technology were recently inducted into the International Mining Technology Hall of Fame

The caliche mineral reserves in Chile are the largest source for commercial extraction and isolation of iodine in the world. Among the most extensive of all Chilean caliche formations is Aguas Blancas, which covers more than 45,000 acres (18,210.9 hectares). Iodine production began there in 2001, primarily by use of traditional drilling and blasting techniques. Today, however, that has switched

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REGIONAL REPORT On the up

Terex has supplied 11 tower cranes to Swire Properties’ US$ 1.05 billion Brickell City Centre mixedused development on the Miami River. The scheme sits on a 3.7 hectare site and comprises more than 500,000 m2 of office, residential, hotel, retail and entertainment space.

On the up The US construction market is looking its strongest since the crisis years, and many hope that there is more growth to come. Chris Sleight reports. ll the data available for the US construction market points to a buoyant industry. According to the US Census Bureau, the value of construction put in place in the 12 months to the end of May this year was just shy of US$ 1.04 trillion, which is the highest it has been since October 2008. Meanwhile, the Bureau of Labor Statistics (BLS) says employment in the industry approached 6.4 million people in April, which is the highest it has been since February 2009. Another encouraging statistic from BLS is that despite the industry’s growth since it bottomed-out in mid-2010, prices for materials are staying reasonably in check. Its producer price index for inputs to the construction industry at the end of 2014 was about -1% lower than it had been a year previously, despite

GTA construction has bought the first 1,350 tonne Liebherr LR 11350 crawler crane in Indonesia. It has so far seen work on a fertiliser plant in Palembang and petrochemical scheme in Anyer.

industry output growing about +5.5% in the same period. The reason for the lower prices is the general fall in commodity prices around the world, and this is something of a double-edged sword for the construction industry. On one hand it means what contractors pay for the goods they use and consume are only rising moderately, if not falling in some cases. This covers a huge range of expense items, from building materials like bricks, blocks, cement, pipes and so on to expenses like diesel fuel for construction equipment. The down side of this is that construction activity linked to commodities is looking weak. This covers a range of energyrelated projects in the oil & gas industry, including ‘fracking’ for natural gas, as well as schemes such as mine development. But there are other indicators of the industry’s improving health and increasing confidence, such as merger & acquisition activity, which tends to pick up in the early stages of a market up-swing. A key deal announced this year is the tie-up between house builders Standard Pacific and Ryland, which will create a US$ 5.1 billion per year player in the residential sector. This would put it in the major league of the nationally active

Silvi Concrete was required to pour a 49,000 ft2 (4,550 m2), 3 ft (910 mm) deep monolithic foundation slab as part of the construction of a new Hindu temple in Robbinsville, New Jersey. The logistics of this formidable 12-hour operation were managed using GivenHansco’s Keystone suite of accounting, batch control, dispatch, and GPS vehicle software solutions systems to help keep track of ready mixed concrete deliveries.

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REGIONAL REPORT On the up

house builders like D R Horton, Lennar and Pulte, and if the new company delivers cost savings and a better margin, it would put pressure on others in the industry to consolidate. The last deal on this scale in the sector was when Pulte and Centex merged in 2009, which was more about huddling together to weather the storm, rather than combining to reap the benefits of a growing market. In fact America’s house builders have already seen a step up in profitability over the last year. As this month’s news report on the world’s 200 largest construction companies shows, the average operating margin among US contractors was 6.8% last year. This compares to 5.65% in the 2014 edition of the study, which was based on 2013 figures. Much of that improvement is due to the residential construction specialists. But this is just one of the figures which illustrates that the industry still has room to grow. Go back to 2005 – admittedly at the height of an unsustainable residential construction bubble in the US – and the operating margin for US contractors was more than 10%. Indeed, the 2006 edition of the Top 200 study saw both Pulte and D R Horton ranked in the top ten of the world’s largest construction companies. In this year’s table they are around the 50 mark, but in the depths of the global PCA chief economist Ed Sullivan says the growing US economy will drive up cement consumption this year and next.

Meva has supplied formwork to the expansion scheme at Ohio State University, which will see 11 buildings demolished and replaced with ten new ones.

slowdown around 2009 and 2010 they dropped out of the top 100. As Scott Hazelton argues in this month’s Economic Outlook, the US residential market is still well below its potential. Housing starts are around the 1 million per year mark, compared to what is considered the natural replacement level of about 1.5 million per year. That gives the US residential developers hope for both revenue and profit improvements in the coming years.

Strong forecasts Others agree. Speaking at the International Builders’ Show at the start of the year, Portland Cement Association (PCA) chief economist and group vicepresident Edward J. Sullivan said he expected US housing starts to increase +20% to 1.2 million units in 2015. “The forecast is based on sustained strength in the labour markets with more than 3 million net new jobs created in both 2015 and 2016,” said Mr Sullivan. “In addition, wage gains in the context of sub-6% unemployment are expected to reinforce labour market fundamentals.” Linked to this, the PCA has forecast a +7.5% increase in US cement consumption this year, with a further +7.9% increase in 2016. “The forecast indicates that the healing in the US economy has taken place. Industry projections continue to be in line with generally improving economic construction fundamentals,” said Mr Sullivan. The key point is that the US construction industry has grown over the last few years despite the country’s overall economic growth being less than inspiring. According to the International Monetary Fund (IMF), US GDP growth has hovered around the +2.5% to +3.0% mark since 2012, and is not expected to

The merger between Ryland and Standard Pacific is evidence of a strengthening residential sector, but pundits say the number of housing starts in the US is still below its natural level.

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REGIONAL REPORT On the up

improve much this year or next. But in the same timeframe, growth in US construction output has been at least +5% and at times as high as +8% per year. That indicates there was some pent-up demand after the crisis years, but it also follows that if GDP picks up to more impressive levels, the construction sector should continue to see at least the same sort of growth levels. The downside to that is that other pressures could come into the industry, such as labour shortages, spiralling materials prices and longer lead times for equipment. It all goes to show that the industry is in a good place at the moment, with fairly impressive growth but no serious inflationary pressures.

Highway Bill Perhaps the one thing which would benefit the US construction industry most is a renewal of Federal funding for surface transportation – a Highways Bill. The cycle the US has fallen into is for a series of fairly short term funding bills to be passed with temporary measures in between. The Bush administration enacted a 2005 – 2009 Highways Bill, but the next one, a two-year programme, was not signed until mid-2012. In the interim the industry limped along on no less than nine temporary extensions to the first law. Without them all work would have ground to a halt. The expiry of that two-year law has been followed by more even shorter term measures and extensions. The problem is funding. The US Highway Fund, which gets its revenues from a tax on road fuel, is running out of money. But it is hardly surprising that it cannot keep up with demand. The current levy is US$ 0.184/gallon (US$ 0.048/litre) for gasoline (petrol) and US$ 0.244/gallon (US$ (US U $ 0.064/litre) for

Topping-out at 1,396 ft (425 m), the 432 Park Avenue development in New York, US will be the tallest residential building in the world when complete. There will be more on this remarkable project in next month’s feature in iC on high-rise construction.

Terex chairman & CEO Ron DeFeo is one of numerous industry figures calling for a better funding mechanism for US highway construction.

diesel, which were set the last time the tax was raised, in 1993 die under the Clinton Administration. That’s 22 years without un an increase even in nominal terms. In real terms, the effect of inflation means that US$ 1 in 1993 money only has about US$ 0.60 of buying power today. US As Terex chairman & CEO Ron DeFeo said in an interview A with iC’s sister magazine, Access Lift & Handlers, there has to wit be change. ““We need to get the user fee up 10-15 cents on the gas tax. It hasn’t changed since 1993. Now you can’t tell me, since 1993, has that an 18.4 cent gasoline tax has the same value then that it tha does today. So if we have a highway trust fund that is funded by do a ggas tax – at a minimum, we ought to index that to inflation, and get back to the same or similar purchasing power, it needs to go up 10 to 15 cents,” he said. Mr DeFeo also made the point that the funding mechanism M needs to change in the face of more fuel-efficient cars, and nee ultimately a move away from fossil fuels. “The only problem is ult 20-30 years from now, we’re going to be using less gas. So a gas 20 tax itself won’t be as compelling, which is why we need to use technology to figure out how to user our assets better,” he added. tec But with a Democratic in the White House and Republicans B controlling Congress, any sort of long-term plan feels unlikely. con That means it might be early 2017 under the next US president before the issue stands any real chance of being resolved. bef But putting this aside, the US construction industry is clearly B well into an upswing, and its strengthening economy should see we that growth accelerate over the next few years. iC tha

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QUARRYING Efficiency focus

Efficiency focus Quarrying equipment tends to be at the larger end of the spectrum, so there is constant pressure to improve fuel efficiency while maintaining or improving performance. Chris Sleight reports. he machines used in quarries around the world tend to be a good deal larger than equipment found on construction sites. There is no hard and fast rule about what size constitutes a quarrying machine and what is an earthmover, because requirements, the size of the operation, the availability of different machines and the capital to invest varies so much around the world. But taking the UK as an example, you might commonly expect to find 20 to 30 tonne excavators on earthmoving projects, but 50 to 80 tonne machines in good sized quarries. These machines and other equipment on this scale like loaders and haulers of course get through a lot of diesel, so there is a constant pressure on manufacturers to both cut fuel consumption and increase the productive capabilities of their equipment. For example, Volvo has updated its 75 tonne class crawler excavator, the EC750D. The unit offers a lifting capacity of more than 26 tonnes and can be fitted with a bucket as large as 5.16 m3 – an upgrade on the EC700 it replaces. Operators can choose from five work modes - I (idle), F (fine), G (General), H (Heavy) and P (Power) – and the engine revs will be automatically set for the best efficiency.

Adams Claim Mine in Carson City, US has bought a fleet of four Terex TA400 ADTs for haulage duties on the steep grades of its gypsum quarry.

Volvo has updated its 75 tonne excavator, the EC750D.

Volvo also said the excavator’s constant high system pressure delivers greater digging force and reduces cycle times, particularly when working with hard and heavy materials. For more power, better productivity and increased manoeuvrability, the high system pressure and durable track ensure tractive force when climbing gradients and travelling over unstable ground. Built with Volvo components, a reinforced structure and machine protection, the EC750D has been designed to last. Robust parts and easy service access are said to increase uptime and keep maintenance to a minimum. Meanwhile, Volvo’s subsidiary Terex Trucks has sold four 38 tonne capacity TA400 articulated dump trucks (ADTs) Adams Claim Mine in Carson City, US, to replace rigid chassis trucks which had been used on the gypsum quarry. “There were a number of elements that had to be considered in the selection of new trucks, including the limited road size, the incline of the haul roads, and ability to handle bad weather in winter,” said Paul Wilson, mine manager for Art Wilson Company. The trucks operating at the site have a 1.2 km haul route from the bottom of the pit, up a 10% grade. Mr Wilson said. “The Terex Trucks TA400 passed all the tests. We went with the 38 tonne-capacity truck as it is close to the capacity of the rigid trucks we were using.” The previous 45 tonne capacity rigid trucks required substantial roads and struggled to pull on the high grade in the slippery conditions experienced during bad weather. This made

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QUARRYING Efficiency focus

Hitachi has supplied a ZX870LCR-5 excavator to Swiss company Lachat as it bids to improve production at the Asuel La Malcôte quarry.

the TA400’s ability to climb and – more importantly – descend the 10% grade proved to be one of the critical factors in the decision-making.

Swiss delivery In Switzerland, quarry operator Lachat is using an 87 tonne class Hitachi ZX870LCR-5 at the Asuel La Malcôte quarry in the canton of Jura to extract a mixture of marlstone and limestone. The ZX870LCR-5 loads two ADTs with its 4.5 m3 rock

Bell Equipment is developing a version of its 60 ton (54.6 tonne) articulated dump truck for European and US markets.

Wear parts alliance

Forest Pennant bought the first Doosan DX530LC-3 in the UK to extract sandstone from its Forest of Dean facility.

bucket at a rate of up to 300 tonnes per hour, depending on the level of demand. Hitachi developed the R series specifically for the quarrying sector, with reinforced components and added protection of structures and key components. “Our new production method utilises the ZX870LCR-5 to extract, separate and sort the materials,” said Lachat general manager Yvan Ryser. “The strength and productivity of the machine have been impressive to tackle our biggest challenge, which is how to select the usable materials from the mix of stone. We used to blast the rock, but that meant that the stone was difficult to sort and this issue is more important to us than the actual amount of materials moved.” Christophe Seghin has been an operator for 15 years and he was hired specifically to work with Lachat’s largest excavator. “This is a good machine and it’s faster than the other similarsized machines that I’ve worked with,” he said. “The biggest benefit for me is its strength and power, which enables me to work more productively, and yet it’s also stable and precise for the selection of materials.

Cat and Modustri team up for real-life monitoring aterpillar has entered a strategic alliance with Modustri. The two companies will work together to develop systems which to monitor and measure wear parts in the field. The companies say they envisage a web-based system which will provide accurate realtime data on wear rates, allowing customers and dealers to take a proactive approach to maintenance, repair and replacement of these components. Doug Hoerr, vice president of Caterpillar’s reman, components and work tools division said, “Our parts monitoring and management tool has been a leader in the equipment management industry for 75 years, but we’re always looking for ways to step up our game. Our relationship with Modustri will allow us to take advantage of emerging technology that gives our customers more information on parts and components to maximise uptime. The days of being reactive are over.” Modustri founder and CEO Brian Steketee added, “We’ve seen how mobile technology can change the behaviours of customers; now we can see groundbreaking hardware and software that can help dealers interact with customers, build trust and plan ahead for maintenance and parts replacements.”

Liebherr’s SME excavators are modified and strengthened for the rigours of quarry life.

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QUARRYING Efficiency focus

Drilling safety Sandvik’s approach to new European standard N 16228 is a new European safety standard introducing a number of new requirements for surface drill rigs as well as foundation equipment, which came into force at the end of last year. A key requirement focuses on the need to protect personnel from entanglement hazards caused by rotating drill steels. Sandvik has tackled this by developing a safety cage around the feed beam. Another example of how the new requirements have been approached is in reducing the risk of fire in case of hose leakages. To accomplish this, protective sleeves have been fitted over hydraulic hoses in coolers and the power pack. Päivi Kautiainen, responsible for the general development of drill rig safety at Sandvik, said, “Product standards are very important to us. From Sandvik’s point of view it is a definitive benefit to be able to bring high quality products that comply with the requirements to all market areas. With the help of safety standards we are able to show the safety level of our drill rigs.” Jarno Viitaniemi, product manager for surface drill rigs added, “Though this is an EN standard, we have a lot of customers in various markets who want drill rigs that are built according to EN standards, and therefore possess high quality safety solutions, even if their local legislation does not require them.”

At 48 tonnes and with a 6.5 m3 bucket, XCMG’s LW1200K is the largest loader in its range. As well as selling the machine domestically, the company has won overseas orders, the first coming from Namibia in August last year.

Elsewhere in the industry, Liebherr has developed its super mass excavation (SME) excavators for the rigours of working in quarries. They feature reinforced undercarriages taken from the next size of excavator up in the range. For example, the R 970 SME features a strengthened R 976 undercarriage. Along with more powerful cylinders than standard machines, this gives them greater lifting ability and stability. Power comes from a 330 kW Stage IIIB/Tier 4 Interim engine on the R 970 SME.. In Dornap near Wuppertal, Germany, Recycling GmbH Lahnau operates a Liebherr R 970 SME crawler excavator in its limestone quarry. The machine already has over 2,000 operating hours, much to the satisfaction of Ralph Lang, who is technical manager and member of the management. “Our Liebherr crawler excavator operates for approximately 50 hours per week.

Sany is pushing into the larger quarrying size excavator classes. Pictured is one of its latest models, the 48.5 tonne SY485H.

Sandvik has supplied a CH430 coone crusher to South Korean producer Wooryung for a demanding limestone application.

The downtimes are minimal and we are very satisfied with the machine,” he said. Based on their positive experience, the company ordered a second R 970 SME crawler excavator, which was delivered in April this year. In the UK, quarry operator Forest Pennant has bought a Doosan DX530LC-3 52 tonne crawler excavator for its facility in the Forest of Dean, to replace the Doosan DX520LC it has been using for the last five years. The quarry produces Royal Forest Pennant Natural Stone, a colourful decorative sandstone with hard-wearing properties. The new DX530LC-3 excavator is used in various stages of the extraction process, first removing overburden to a depth of 18 - 19 m, then by working the rock together with a Doosan DX340LC crawler excavator equipped with a Montabert XL2600 hydraulic breaker. The DX530LC-3 and DX340LC excavators are also used

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QUARRYING Efficiency focus

New from Terex Finlay is the 873 screener, which is designed to work after a primary crusher as a front-line unit. It features a 7 m3 hopper and a high-capacity two-deck screen.

show substantial advantages of the articulated 4x4 over its rigid competitors in terms of all-weather performance and costs. All field testing results are being directly considered during the final development of the Bell B60E. The EU Stage IV/US Tier 4 Final version is projected to be available in early 2017.” to lever complete blocks of Pennant stone weighing 12 - 14 tonnes away from the quarry face, which are then lifted by the DX530LC-3 excavator to a point where the company’s Doosan DL420 wheel loader can pick them up and take them to the top of the quarry. Here the blocks are loaded on to lorries to be taken to the Forest Pennant factory a mile away in the forest for sawing and other processing work. Meanwhile in the hauling segment, specialist manufacturer Bell is pushing the boundaries for ADTs. First unveiled at the Bauma Africa exhibition two years ago, the 60 ton (54.6 tonne) capacity B60D, is being developed for markets outside Africa following positive feedback from the first customers. The company’s director of European operations, Marc Schürmann, said, “The practical experiences of these operations

Crushing & screening South Korean aggregates producer Wooryung, has acquired a Sandvik CH430 cone crusher to produce a 30 mm product from a -150 mm feed material. The CH430 is located at the company’s site in YoungWol, in KangWon province, with the crushed limestone being supplied to a steel company after desulphurisation. Like other Sandvik cone crushers, the CH430, combines high capacity with high reduction efficiency. Hydraulically adjusted closed side setting (CSS) and automatic wear compensation, a choice of different crushing chambers and eccentric throws, plus many other high performance features, helps to ensure each model is versatile, user friendly and productive.

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QUARRYING Efficiency focus

Caterpillar’s new MD5150C top hammer rig is said to out-perform DTH units, with similar or better production levels at lower fuel consumption.

Metso meanwhile has organised its screening products into two new lines, its Premier and Compact ranges. The Premier range includes the CVB inclined circular motion screen, the ES horizontal elliptical motion screen and the TS multi-slope variable motion screen. These screens have long been Metso’s flagship vibrating products, which can be configured in many ways and which can incorporate a range of screening media. The Compact range includes machines that have been incorporated into Metso’s Lokotrack and Nordberg mobile crushing and screening plants, but are now available for single unit sales and use in stationary plants. They include the CVB-M inclined screens with circular motion and the FS horizontal screens with elliptical motion. A key feature of the Compact range is that they can be used with either wire or synthetic side tension screening media, which are relatively cheap.

Terex Mineral Processing Systems has added the TC 1150 cone crusher to its range, which features improvements to the wedge ring, upper frame, inner skirt and mantle liner.

Drilling According to Caterpillar, its new MD5150C top hammer drill rig outperformed down-the-hole (DTH) rigs in terms of both performance and low fuel consumption in tough conditions. The unit was put to the test at the Iron Mountain Quarry, near St. Louis, Missouri, US, where it is reported to have achieved double the productivity of a DTH rig. This was said to be due to the powerful Cat HPR6832 hydraulic rock drill, the new carousel rod changer and the efficient Cat C11 engine. The rig was drilling 5.5 inch (140 mm) diameter holes to

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QUARRYING Efficiency focus

William Thompson & Son of Dumbarton, UK bought the first Caterpillar 972M XE wheeled loader in the UK at the end of last year. Cat says the machine offers -25% less fuel consumption than competitive machines thanks to its advanced powertrain.

Atlas Copco’s FlexiRoc T25R top hammer rig can drill hole diameters up to 64 mm.

Dragline acquisition New workhorse for German gravel pit he Hans Wolf group of companies in Straubing, Germany has bought a 40 tonne capacity Sennebogen 640 HD duty cycle crawler crane to use as a dragline for gravel extraction. The group has several sand and gravel pits in Lower Bavaria and the Upper Palatinate along the River Danube, and has used draglines for decades. Its latest acquisition excavates some 1,500 m3 per day to depths of about 6 m using a 2.5 yd3 (1.9 m3) drag bucket. The onboard components on the 640 HD include a 186 kW Cat engine and 12 tonne capacity freefall winch, which provide the pulling force for the bucket. According to operator Karl Schwaiger, the crane can comfortably move 150 m3 per hour.

70 ft (21.3 m) deep using 68 mmdiameter rods. The drill bit life was said to be 1,100 to 1,200 ft (335 to 366 m) – about the same as the DTH rigs, while fuel consumption was lower. Cat Drills commercial manager Matt Jacobs said, “We saw similar results in an earlier trial at a Tower Rock limestone quarry near St. Genevieve, Missouri. That site has softer rock conditions and the MD5150C dramatically outpaced a competitor’s DTH drill.” He added that hole deviation was also not an issue. Atlas Copco meanwhile has launched the FlexiRoc T25R top hammer rig, which is designed for 45 – 57 mm hole diameters, but which can cover a fuller range of 38 – 64 mm. It is fitted with a 14 kW COP 1435 rock drill. Product Manager Marcus Leu, said, “A number of large infrastructure projects are either underway or being planned right now, not least in the Nordic countries, and this, together with the growth and expansion of the big cities, is generating an increasing amount of drilling and blasting work.” Like the larger FlexiRoc T30 R, FlexiRoc T25 R is based on a well proven design platform developed in the 1990s and which has since been successively updated and refined. Even though it has been produced initially for the Scandinavian market, the FlexiROC T25 R will be available worldwide. Innovations like this rig and others go to show that improving efficiency in quarries is not just about the latest equipment with the most efficient engines. Buying flexible machines which can cover a number of roles can have its place, and it is clearly critical to make sure all equipment is well-matched and working well together. iC

Great Lakes Aggregates moved to a combination of Flex-Mat 3 and Hyper Slot screening media for its 1 million tonne per year Sylvania Minerals Quarry limestone facility in South Rockwood, US. The company said the Flex-Mat 3 had eliminated pervious problems it had seen with binding of material in the screening media, while the Hyper Slot made a huge difference to fines removal.

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MIXING TECHNOLOGY In the mix

An Ammann SpeedyBatch 280 plant is meeting the formidable challenge of producing 870,000 tonnes of asphalt for the 67 km Milan Motorway scheme in Italy.

In the mix When it comes to major projects, a steady supply of high-quality asphalt or concrete can be a key ingredient to success. The latest generation of mixing plants can help achieve this while improving environmental performance. Marini-Ermont has added a 160 tonne per hour plant to its Neo range of modular asphalt mixers.

hen it comes to big projects on tight timescales, keeping material flowing – be it concrete or asphalt – can be critical to the overall success. But these days it is not enough to keep producing material and meet quality standards. There is a bigger emphasis than ever on using recycled materials, particularly in the road sector. This means that as well as being fuel-efficient and easy to transport, the latest generation of mixing plants also have to be able to incorporate high percentages of old asphalt, while still hitting those key quality standards and project deadlines. The Fayat Group is one of the big names in the materials mixing sector, and at Intermat in Paris, France earlier this year there was lots on show from the French company at this ‘home’ exhibition. Its subsidiary Marini introduced a new 6 tonne asphalt mixer, which is targeted towards applications where recycled asphalt pavement (RAP) is being incorporated. Marini said that the traditional way of incorporating RAP into mixes was to add it cold and rely on energy from over-heated aggregates to bring it up to temperature. The downside to this is that with high percentages of RAP in the mix, the new bitumen degrades by being overheated and there can be excessive volatile organic compound (VOC) fumes, which are a pollutant and health hazard. The company said its new 6 tonne capacity mixer allows RAP and fresh aggregates to be brought up to temperature and any water in the RAP burnt off before new bitumen is added. This reduces emissions and improves the quality of the final asphalt.

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MIXING TECHNOLOGY In the mix

When P&S Paving of Florida wanted a brand-new asphalt plant, it opted for an Astec system featuring a Double Barrel XHR mixer, which can incorporate as much as 65% RAP.

The relatively high capacity of the mixer means this can all be achieved without extending mixing times and therefore sacrificing output from the asphalt plant. Meanwhile, the latest plant from Fayat’s Marini-Ermont business is the RF 160 Neo continuous hot-mix asphalt plant. The company said it had designed the plant to be mobile, easy and quick to set up and low cost, while still providing high-quality asphalt. It is the largest plant in the Neo range, which offers outputs from 80 to 160 tonnes per hour, and features a counterflow dryer drum mixer, which keeps energy costs down compared to other designs, and which can handle up to 50% RAP through the company’s ‘Retroflux’ process. In terms of keeping costs down for contractors and asphalt producers, Marini-Ermont points to feature such as its easy transportation, set-up and tear-down design, the ability to incorporate high amounts of recycled materials, a low maintenance requirement and low energy consumption. Meanwhile on the cold mix asphalt side, Fayat’s specialist in this area, SAE, has added the Packliner Compact, a continuous plant offering capacities form 50 to 200 tonnes per hour (depending on the mix design). It is equipped as standard with two feed bins for granular materials (one volumetric bin and one weighing bin), while a third can be added as an option. All of the Fayat Group’s Marini subsidiary has added a new 6 tonne capacity asphalt mixer targeted towards applications using high quantities of recycled asphalt pavement (RAP).

metering units, such as the water, emulsion or cement metering units, in addition to the control and management (automation) cabinet, are mounted on a single chassis. The plant is designed for rural or urban road projects for which the use of products such as cold bituminous mixtures is a key benefit because of the low production cost and the lack of fumes, among other factors. SAE said it was also suitable for road maintenance work and small to medium-sized schemes for similar reasons. As a relatively small and specialised segment of the industry, it is unusual to get new entrants to the mixing plant industry. However, China’s XCMG is now marketing an 80 tonnes per hour asphalt plant, the XAP80J. The company also owns German manufacturer Schwing, which is of course well known for its concrete plants. The XAP80J is said to be rated at 307 kW, and produces material at an efficiency of 1 tonne for every 6.5 kg of fuel burnt. XCMG says it is not only selling these units on the domestic market, but recently delivered and commissioned its first exported plant to Pakistan.

Buying choices A project connected to the current Expo Milan 2015 event in Italy is the Milan Motorway, which will see some 67 km added to the city’s outer bypass, connecting to the A1, A4 and new A 35, to help alleviate traffic congestion and cut travel times. Tangenziale Esterna is the general contractor for the scheme, while another company, Turchi Cesare, is producing all the asphalt. Design work began as far back as 2003 and construction got underway in 2012. Completion is expected later this year.

SAE’s Packliner Compact cold mix asphalt plant has been designed to be easy to transport.

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MIXING TECHNOLOGY In the mix

Contractor Veidekke estimates the Benninghoven TBA 4000 UC plant it bought in May last year produced some 170,000 tonnes of asphalt in its first year. The experience prompted it to order another unit in March.

Angelo Ricchetti, director of Turchi Cesar, said the production of asphalt for 67 km of roads with multiple lifts had to be achieved in only 18 months. “That included a base course, a binder, a porous layer and the wearing surface,” he said. The company is using an Amman SpeedyBatch 280 for the production. This is a container-optimised plant, meaning it is configured in accordance with container dimensions. It features steel platforms without concrete foundations and electrical and pneumatic connections integrated into the plant concept, enabling quick and cost-effective installation at the site. The mobility is appreciated, but this job required consistent daily production. The SpeedyBatch provided it, at a maximum of 320 tonnes per hour and some days delivered 5,500 tonnes. The production for the scheme is put at 850,000 tonnes, and at the height of work the plant produced 300,000 tonnes in four months, frequently working a 24 hour day.

“The deadlines were the most difficult part of the project,” Mr Ricchetti said. “Many pieces had to come together: adequate work planning, department organisation, logistics, aggregate and bitumen supplies and worker shifts. Even breaks, rest and meals had to be planned.” The plant had to do its part as well. Various mix types were required, a process made efficient through the Ammann AS1 control system. “It’s simple to operate and highly reliable and user friendly,” Mr Ricchetti said, adding that the system made it easy to adjust recipes. The plant features an RAH50 dryer to enable the utilisation of 30% RAP, an amount the RAH50 had no trouble meeting. In addition, the aggregates and the mix were CE certified as they provided the highest quality with a low environmental impact. “The RAH50 dryer and mixer are allowing us to save money by recycling RAP,” Mr Ricchetti said. “The best cost savings resulted from using a huge amount of RAP with compliance of recipe specifications.”

Florida plant Astec was the supplier of choice when Florida, US-based P&S Paving decided to build a new asphalt plant from the ground up, using the latest technology available on the market. P&S Paving president Tim Phillips said, “The largest reason we went with the new asphalt plant was that we needed more storage capability. We wanted to test the mix; know what we have in the silo before it’s delivered to the roadway. Of course the technology has changed dramatically within the last 15 years and we wanted to take advantage of what’s out there.” At the heart of the new plant is Astec’s latest Double Barrel XHR drum mixer, which can produce high quality asphalt even

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MIXING TECHNOLOGY In the mix

Updated truck mixer High capacity with roading compliance n updated product designed specifically for the US market is Terex’s FDB7000 front discharge mixer. The on-road mixer meets the requirements of the Federal Bridge Formula for axle loads and spacings, while offering a 10 yd3 (7.6 m3) capacity. Updated features include a new radio remote control pendant, which replaces the previous version with its cord, for more flexible operation. Also new is the engine hood design, which has been made both stronger and sleeker. Options include a choice of two front axles with sharper steering angles than the predecessor machine, to cut down the turning radius. Also on the option list is an auto-lube system, while the cold weather package will be useful in Northern climates. Inside the cab there is more floor space and a redesigned dashboard, while the various engine options include diesel or compressed natural gas (CNG) options.

A Relative newcomer to the industry XCMG has had its first overseas sales success with the export of an XAP80J asphalt plant to Pakistan.

with as much as 65% RAP (at 5% moisture content) in the mix, and the high RAP capability was a key point for P&S Paving. The Double Barrel XHR employs two mixing technologies - an outer chamber on the drum and an external mixer. Meanwhile the V-Pack stack temperature control system maintains as low an exhaust temperature as possible when running a high RAP/low virgin mix, because less virgin material in the drying portion of the drum could potentially result in high exhaust temperatures. In order to combat the high temperatures encountered when running high RAP content, the last half of the Double Barrel XHR drum is all stainless steel, including the combustion flights. The outer mixing chamber on the dryer gently mixes reclaimed material with dry hot aggregates, maximising heat and binder transfer between RAP, aggregate, and selected admixtures in a rarefied oxygen atmosphere. P&S Paving currently provides about 400,000 tons (364,000 tonnes) per year out of this one facility, and Astec made sure they have enough capacity to meet that goal comfortably. Mr Phillips said, “With specifications getting tighter all the time, we know we have the best available equipment in the industry. We have all the tools, so now it’s just up to us to make good mix.” Meanwhile in Sörli, Norway, one of the Nordic region’s largest contractors, Veidekke, chose a Benninghoven TBA 4000 UC asphalt mixing plant to produce 320 tonnes of asphalt per hour on a major road project which started last May. A challenge for Benninghoven was the minimum stack height of 20 m, which is prescribed by environmental laws in Norway. This prompted the designers to come up with a special foundation frame for the stack and dust collection unit which could be positioned without the need for bracing. When it came to commission the plant, some 58 trucks were needed to transport all the components from Benninghoven’s base in Western Germany, to the site in the Eifel region of Norway, some

1,500 km away. This provide a formidable logistical challenge, not least because of the number of travel permits and convoy escorts required in several different countries along the way. Once on site, Benninghoven provided training for Veidekke’s personnel “Qualified training is an integral part of the start-up procedure and helps the customers, no matter how experienced, to make full use of a plant’s capacities from the very first day,” said Benninghoven sales manager Rolf-Bernd Leimbrock. Following commissioning and training, the plant has comfortably managed to supply 10 trucks per hour. Veidekke estimates the plant produced some 170,000 tonnes of asphalt in its first year, which prompted the contractor to put in an order for another unit in March of this year.

New to the Liebherr concrete plant range is the Betomix 2.5 A-R.

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MIXING TECHNOLOGY In the mix

Concrete plants This year has seen Liebherr add the Betomix 2.5 A-R to its mixing equipment range. It features a new RIM 2.5-M ring-pan mixer with mechanical agitator system at its heart, which the company says helps ensure outstanding mixing results for even the most exacting concrete types. The horizontal plant has a modular design concept behind it, which means a range of options and accessories can be chosen, added and taken away for an efficient and flexible solution. Liebherr also said its Betomix plants could be used in a range of climates. In very cold regions, the company can supply plants where everything is encased and insulated, while adding heating systems to the control cabs as well as the silos to ensure material does not stick together. Meanwhile in very hot climates, flake ice can be added into the mix to keep the concrete temperature down. Betomix plants can be fitted with ring-pan mixers from 1 to 3 m³ or twin-shaft mixers from 2.25 to 6 m³. The mixers can be loaded either via skip or by loading belt, while a popular option is the lowerable delivery hopper which can accommodate vehicle heights from 3.4 to 4.0 m. Meanwhile, SBM has delivered two Linemix 3000 CM 410 H concrete plants to the Silvetta region of Austria where they are being used on the Obervermunt II pumped storage power project – all at an altitude of 1,700 m up in the Alps. Each plant is fitted with a 3.0 m3 twin-shaft mixer, producing 130 m3 of concrete per hour, and the two plants are being used side-by-side to ensure there is always concrete available to the project.

SBM has delivered two Linemix plants to the Obervermunt II pumped storage power project in the Austrian Alps.

The scheme is due to finish in 2018, with concrete production scheduled to go on until October 2017. SBM’s client, Transbeton, is producing concrete for the scheme directly in front of the dam wall, so excavated rock can be used for aggregates, and there is minimal transportation back to the site for the ready-mixed concrete. Rock is stored in a 410 m3 mobile hopper, which has been winter-proofed to ensure material is always available and freeflowing for concrete production This all goes to show that whether concrete or asphalt is being provided for major projects, reliability, quality and efficiency are key ingredients for mixing plants iC

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EQUIPMENT Samoter

UNACEA and Veronafiere sign agreement for Samoter 2017 Italian construction equipment manufacturers’ association agrees to support the Samoter exhibition, which will be held in Verona in February 2017. Chris Sleight reports. talian construction equipment manufacturers’ association UNACEA has signed an agreement with Veronafiere, the organiser of the Samoter exhibition, to help promote the next show, which will be held from 22 – 25 February 2017. Samoter is held every three years and this will be the 30th time the exhibition has taken place. In 2017, as in 2014, Samoter will be co-located with the Asphaltica exhibition for the road building industry. The agreement covers joint promotion, training and

communication action on domestic and international markets. It was signed by Ettore Riello and Giovanni Mantovani, the president and CEO of Veronafiere respectively, and Paolo Venturi, president of UNACEA. Mr Venturi said, “We are delighted to sign a collaboration agreement with Samoter in order to develop closer synergy benefitting all companies in the sector.” UNACEA said it wanted to raise environmental issues in the run-up to Samoter and during the show. This will include issues around engine exhaust emissions as well as a

focus on the difficulties and dangers Italy faces from earthquakes. On the country’s seismically active geology, Mr Venturi said, “The authorities must invest in the land to repair it and provide future protection.” On the subject of engine emissions he said, “There are many areas in Italy where there are air quality issues and infractions, but nothing is being done. On one hand, ‘Euro II’ cars cannot be driven in Italy, but Stage II excavators can still be used. We need municipal orders to ban the use of old-Stage equipment in built-up areas.”

2017 exhibition Samoter was last held in May 2014. It was a sparse show compared to previous events, with many of the industry’s big names not taking part. The only major international earthmoving equipment maker to

take exhibition space was Komatsu. Mr Riello acknowledged the problem, saying “The last edition was tough but we feel it was successful. We are ready to invest in the future because we believe there are opportunities for the industry in this country.” Veronafiere commercial director Diego Valsecchi added, “We are talking with all of the big names in the industry about 2017. We do not have commitments at this stage, but we have a dialogue.” He added that the decision to hold the 2017 in February – a time when weather in Verona can be poor – came at the request of the majority of exhibitors, who felt a May timeslot was too late in the year for their seasonal industry.

Market trends A key factor which hindered Samoter 2014, was that the exhibition came at an historic low in the Italian construction equipment industry. According to UNACEA, the Italian market was some -79% lower in volume terms in 2013 than at the post-crisis peak of 2007, when almost 30,000 machines were sold. Mr Venturi said, “There are some signs of recovery. 2014 was up +10% and the first quarter of 2015 was also good. The market is gaining, but there is still instability and in volume terms we are still very far from 2007.” Mr Mantovani said that for the 2017 exhibition, the organisation wanted to, “Leverage the signs of economic recovery.” iC

UNACEA president Paolo Venturi (L) with Veronafiere president Ettore Riello (R).

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