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TWST: What is Aecon Group?
Mr. Patten: Aecon Group is a construction and infrastructure development
company based in Toronto, Canada. Historically, we've worked throughout
the world, but these days we are primarily focused on the Canadian
market due to the tremendous opportunities and strong growth forecasts
in this market. We are active in virtually every sector of the
construction industry other than single-family housing ' including civil
construction (such as road building, dams, tunnels and the like),
utilities construction (such as gas lines, telecommunication and cable),
buildings contracting for both the public and private sectors, and
industrial construction, primarily in the power and energy sectors. We
also have a division in the infrastructure development business '
essentially developers of projects such as toll highways and airports
through concession agreements with government, as well as one
specializing in pipe fabrication and module assembly, and another that
manufacturers once-through steam generators. As broad as we are, we have
developed a particular focus, especially in recent years, in the energy
and transportation infrastructure sectors. While the Aecon name is just
five years old, our various operating divisions go back much further. We
trace our roots back to about 1910 when the Foundation Company of Canada
was formed in Montreal, and our road building operations date back to
the 1920s. As we like to say, we've been building roads in Canada since
the Model T was king of the road. Over the years, we've grown to become
the largest publicly traded construction and infrastructure development
company in Canada. TWST: What are the market dynamics that have an impact on your
strategies and goals, including current competitors, consolidation in
the space and key trends in the market?
Mr. Patten: In terms of growth opportunities, the Canadian construction
market is in a growth cycle now that is probably the strongest we've
seen in the last 15 years. We are looking at strong growth, especially
in the energy and transportation infrastructure areas that I mentioned
as our focus. Organizations like Global Insight have said that we are in
a period right now where Canada is expected to be the third fastest
growing construction market in the world behind China and India. And it
is something that we are now starting to see increasingly reflected in
our results. To the extent there was excess capacity in the market over
the last number of years, margins were under pressure. And now, to the
extent that demand is growing to fill the available capacity, we are
seeing this reflected not just in our volumes, but also in margins, in
contract terms, and in the business environment ' all of which are
improving. So we have a very positive outlook over the near and medium
term. On the competitive side, there are very few companies that compete
across the spectrum the way Aecon does in the Canadian marketplace. If
we are looking at our competitors, we have to almost look on a division-
by-division basis, as they are different in each sector.
Tickers included in this excerpt: ARE:TSX
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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