The Internationalization of Spanish Companies: Ferrovial, The Rise of a Multinational
published: June 29, 2011, recorded: February 2008, views: 2626
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Move over, Italy. Rafael del Pino is here to claim Spain’s rightful spot as a major European player in the global infrastructure market. Founded by del Pino’s father in 1952 as a builder of sleeper cars for trains, Ferrovial has diversified into a conglomerate with a hand in construction, real estate, road building design and operation, water treatment and desalination, airport ownership and operation, among other activities, and with 104 thousand employees in 43 countries. Del Pino describes some of the milestones passed, and hurdles overcome, during Ferrovial’s 50 years of expansive growth.
The company’s largest triumphs come from winning contracts in other nations: Ferrovial developed toll roads in Colombia, then Chile, and in 1988 bid on a huge ring highway around Toronto that involved committing 600 million Euros of Ferrovial’s own money. Not all Canadians were receptive to a Spanish company building and running a road with electronic tolls, and indeed, when the system didn’t work correctly at the start there was a great deal of public criticism, followed by a big fight with a new, opposition government.
Ferrovial bought its first airport in northern Chile in the late 90s, “in the middle of a desert, with some copper mines around and not much else.” They got the bid because of “a good relationship to the public works minister,” and because no previous experience was required. In 2004, Ferrovial “became more courageous,” and invested in the U.S., buying the Chicago Skyway from the city. Other acquisitions included a public works builder in Poland, and a joint venture in the U.K. with a company that runs three of London’s Tube lines.
Work with London's Tube lines made Ferrovial's acquisition of BAA (which runs Heathrow Airport) possible. Ferrovial, says del Pino, leverages airports as much as it can, and the BAA enterprise will leave Ferrovial with a net loss in 2008 of at least 300 million Euros, some of which flows from extensive renovations and rebuilding at a key terminal. Del Pino says the company’s shares have fallen by half in one year as a result of this venture and that “we’re being punished by uncertainty with BAA.” He notes sarcastically, “This is how the market reflects our wonderful management skills.” He’s dug in for the long run, though. “We’re a UK company based in Madrid.”
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