"The injection of investment in civil works is as water of May”

ALFREDO RODRÍGUEZ
VERDUGO

Rover Alcisa Group Chairman

It is one of the civil engineers who left Ferrovial in the nineties to start his construction company. Rover Alcisa is nowdays a standard in railway construction and doesn’t avoid competing with the larger ones.

Javier F. Magariño Madrid

Rover Alcisa fits in the profile of median firms that expects to emerge stronger from the crisis. It is among the major civil works contractors in Valencia, with a turnover of around 200 million, good position in the railway construction and growth based on innovation and prudent investment. Managed and controlled by Alfredo Rodríguez Verdugo, a 49 years old man from Avila forged at Ferrovial, seems to breathe without difficulty in view of their limited exposure to brick or private clients. However, the president believes that "we must ride the wave when creating" and peers, for example, opportunities in real estate. The last major stake in the crisis, was to integrate the railway construction Iberovías in the group. Following this reinforcement applauds an extraordinary plan for investment in infrastructure that is based on the railroad.

QUESTION. Blanco Minister has announced a plan of public-private participation in which the contracts will leave 50 million and 70% of the 17,000 million investment in railway construction. You dont have a bad position ...

ANSWER. The injection of investment in civil works is as water of May. The plan is well developed, takes into account the needs of the financial sector and I hope its a success. Rover Alcisa can invest and want to participate in an important way. The President and the Minister of Development stressed during his presentation at the entrance of all types of businesses. This means that the Government is committed to growing competition.

QUESTION. Does it have more depth than the Plan E or Local Investment Fund?

ANSWER. I think so. Apart from the ability to generate employment, the initiative has an impact on future growth based on creating first-class infrastructure. As for Plan E, we ourselves have participated and has been important. Last year was very hard and there is no doubt that companies like ours, helped us to retain talent. The important thing is that control of the deficit does not make anyone fall into the temptation to cut investment in production.

QUESTION. Have you felt the slowdown in the tender to local and regional level, possibly in Valencia?

ANSWER. Valencia is carrying out the Confianza (Trust) plan to stimulate infrastructure and expect a lot from this initiative. Although the central Administration has focused a bit more, by tradition, to companies that play in the champions league of construction, Rover Alcisa has its place. We also work with very little regional and local. We are among those companies that dominated the engineering and qualification of staff.

QUESTION. How can you access from their position to contracts that will be launched by the Ministry of Development?

ANSWER. We work with the greatest, but it is natural to go with firms of our features. When one wins the race-based quota, it is efficient, it innovates more and gives better service to society. I recently heard the Minister Blanco is to start measuring the companies for their innovation capacity and not by the kilometers of highway that are capable of doing. I love this argument. It would be good in the contests to present the offers anonymously and to be the best proposal the one that is imposed.

Internationalization is required subject for the Rover Alcisa cadre of staff. "Spreading out of Spain is a priority, but doing it in a hastily way would be suicide," said its president.  Alfredo Rodriguez has sealed alliances in Libya, Tunisia, Colombia, explored in due course and dismissed Dubai - "the crisis was seen coming forward for a year and a half" - and try to understand how the construction sector works in countries of the size of Brazil and India before taking any decision.

"We are prepared for the cycle which is to come because we have taken steps with caution. In the projects that are put on my desk I give the same importance to economic and financial analysis as to intuition" says the businessman who lives in Valencia.

The jump should occur by the railway construction industry, which is what makes Rover  Alcisa  does from its origins and what it is investing.

The group's largest shareholder, with 70% of capital in its hands, says that shopping options come almost daily. And he does not discard anything, and studies each case.

To what he does not spend even a minute is with the possibility of opening the capital to new partners: "We have no need." Maybe because its financial debt is of barely 30 million euros and most are signed for long term. A position that responses to a way of doing business that has a long history: When buying Rover buys Alcisa in 1995 it made so with family estate. Rodriguez Verdugo calls it cautioun.

Confidence

Rover Alcisa expects a new real estate cicle

QUESTION.- The results of the 2009 lowers down the figures in 2008. Has it been a tough year?

ANSWER.- Our sales are around 195 million [225 million compared to 2008] and Ebitda is 6 million. The margins in public works are narrow and Rover Alcis is accompanying the adjustment of the sector. In the real estate area, with much less weight than the civil works, is undergoing a period of containment. We are focused on VPO projects and our intention is to continue in that field.

QUESTION.- Do you believe that building remains to be the engine of the economy in the short and medium term?

ANSWER.- Without this sector it will be very difficult to get out of the crisis. Rover Alcisa has been a group of civil works that has also opted for a kind of urban planning and social housing. We went five years ago in the housing market, with the help of Fernando Martin, and since then we established our performance. We saw in 2005 that the cycle was about to run out and it seems we were right. What I have clear now is that this country needs a balanced housing sector that generates employment, cover the existing demand and feed the construction and related industries. For my business is not the most important, but Spain is able to absorb 300,000 houses per year.

QUESTION.- People will say that you go against the current.

ANSWER.- Rover Alcisa will be the next real estate cycle. When I say that my people get scared, but I have arguments. When the business was burned nobody wanted to see it, starting with analysts, and then came the collapse. I really believe that we will emerge from this crisis and that will generate business. The offer will be destroyed and we know this business.