With completely different strategies, it seems that big groups are heading into a new period of “fat cows” in the construction industry. On the one hand, the traditional strategy, i.e. the presence of a vertical structure that will unite the construction “hands”, concessions and energy, and on the other hand, it seems that new “poles” are being created that have more character of an investor in the field of infrastructure, rather than a construction group. These companies do not have a construction mechanism for the implementation of projects. Instead, they select subcontractors with whom they work to meet the technical needs arising from the contracts they enter into.

So, for example, after the conclusion of the contract of sale Actorwhich is expected to be formally approved at the Extraordinary General Meeting on May 24, the leaders Ellactor groups seems to accept this very model. In essence, by shedding its construction arm, the Ellactor group is turning into a fund in the infrastructure sector, i.e. seeking to create a portfolio of investments (for example, concessions, PPPs) that will generate a stable and visible income over time.

Taking advantage of his very important international experience, the tactics he has followed for many years are also similar to Mytilini Group. In other words, realizing the risk of trying to create a project production mechanism, given the cyclical nature of the industry and low profit margins, the management of the Mytilinaios group preferred to rely on their “authorities” in demanding contracts, but at the same time turning them into subcontractors for the implementation of projects. This is achieved whether the projects are implemented through a joint venture (such as the PPP for the Thessaloniki Eastern Road flyover, in which Avax is also involved), or purely public projects, such as the Amvrakia Road axis.

“Our constant policy is to cooperate with construction companies in the projects we undertake. This is what METKA, which recently became our construction division, continues to do within the new operating structure of the Mytileneos group,” say typical listed company executives.

This is the approach adopted by foreign construction companies active in the Greek market in recent decades. Bands such as Hochtief, Vinci, ACS and Impregilo, who have undertaken and participated in landmark projects such as the Athens Metro, El. Venizelos, the Rio Antririo bridge and highways, cooperated with Greek companies, which they used as subcontractors, without importing machinery and people from other markets. Thus, they essentially functioned as investors, but with project implementation experience, leaving purely technical matters to their internal partners.

It appears that groups like Ellactor, controlled by Mr. Henry Holderman’s Dutch Reggeborgh Invest, are now trying to do something similar. Characteristically, Reggeborg, which is the family office of the Wessels family, owners of one of the largest construction companies in northwestern Europe, VolkerWessels, has never shown a desire to import logistics equipment or human resources for projects in Greece. In fact, one of the reasons for the decision to sell Aktor was the lack of competent and experienced executives to “manage” Aktor, as significant “deforestation” had occurred in previous years due to uncertainty about the company’s future.

Emphasis on construction

On the other hand, groups like HEK TERNA they opt for a vertical model in which the construction activity is the main part of the activity, but is framed by a significant amount of concession contracts, through which the necessary liquidity is attracted and the operating margin is increased. For several years TERNA, the construction sector of the GEK TERNA group, has not been the industry leader in terms of turnover, having a more selective approach to new projects. This approach worked in favor of the “health” of its balance sheet and helped it gain market share today. Both Avax and Intrakat focus on production, without sacrificing profitability either.

The first has perhaps the most experienced group of performers in the implementation of government projects, as well as an important production mechanism. The second operates under the new leadership of Mr. G. Kaymenakis, D. Baku and Al. Exarchu, to significantly strengthen this very mechanism, both through the recruitment of new leaders, and, of course, through the acquisition of Actor. The management of Intrakat aims to become a central player in the sector in the coming years.

Numbers

27 billion

Euro will be mobilized in construction and infrastructure through the Recovery Fund (loans and grants) in the period 2023-2026.

8.7 billion

Euro will be allocated for infrastructure at the expense of the new NPF for the period 2021-2027.

8.1%

GDP this is projected to be the percentage of investment in construction projects in 2025, compared to 4% of GDP in 2020.

13 billion

Euro The current project portfolio of large construction groups has increased from 5 billion euros in 2019.