Hill International, one of America’s largest project management firms, has secured an enviable pipeline of work in the Middle East. Company founder Irvin Richter, together with his son David, who will take over as CEO later this year, says the opportunities outweigh the challenges
Like any family business, father and son executive team Irvin and David Richter often drive each other mad — in a good way.
“It’s a necessary evil in a family business, but you get through that,” David, the president and chief operating officer of US construction consulting firm Hill International jokes.
“I prefer to see him there,” Irvin, the company’s founder, chairman and CEO, adds. “When he’s not there it’s just a different kind of day.”
As the pair prepare for a changing of the guard at the end of this year, with Irvin to step down and into semi-retirement and David to become CEO, there is no doubting the dynamics between them have produced results.
The company surpassed the $1bn mark for total backlog worldwide for the first time in its 38-year history at the end of 2013, with its share price skyrocketing 66 percent in six months to $5.03 at the end of January.
There is also no doubt that the Middle East is playing a big part in Hill’s recent success. Even by its own impressive track record in the region — the company has worked on major projects such as the Palm Jumeirah, The World islands, the Palm Jebel Ali and the Sheikh Zayed Grand Mosque — the numbers are big.
In its third-quarter financial results, the Middle East was responsible for 43 percent of the company’s global consulting fees, making it Hill’s biggest geographical market. In dollar terms revenue increased by 66 percent in the region — a result topped only by Hill’s African operations, which have been bolstered by the acquisition of consulting firm Binnington Copeland & Associates (BCA).
“The growth has always been phenomenal in the Middle East,” Irvin tells Arabian Business during a sit-down interview in Dubai.
“There’s a tremendous amount of work that needs to be done infrastructure-wise. We’ve moved from tall buildings into flat buildings. We see infrastructure in the Middle East growing.”
As a result some of Hill’s biggest projects in the region are in transportation, aviation and public infrastructure. With a strategy developed last year on winning work across the three areas, Irvin predicts the company, which now has more than 4,000 employees in 100 offices worldwide, will continue to target those areas for the foreseeable future. After all, as Irvin points out, unlike tall buildings, a lot of public infrastructure projects do not have end dates, with roads requiring extensions and more stations added to rail networks — all adding up to ongoing work for companies such as Hill.
“We’ve seen a real transformation of our business in the Middle East in the last five years,” David, 47, says. “What was a business then that was entirely private sector — commercial buildings, hotels, residential towers — has changed into infrastructure and public works and the biggest projects that we’ve been winning in the last couple of years are airports, rail, hospitals, education.”
“You have to be where the market is,” Irvin adds. “There’s no sense in building up a lot of project managers on tall buildings when everything you’re bidding on is an infrastructure project.”
Hill’s biggest market sector remains buildings, at half of its business, but transportation such as rail has grown from 9 percent to 30 percent of all its work.
Hill’s $265m joint contract with the Louis Berger Group to manage three of six lines on the Riyadh Metro in Saudi Arabia and the $108.5m contract for the new Muscat International and Salalah airports in Oman are among its biggest recent project wins in the Middle East, with the former expected to continue to drive profit upward in 2014, according to Hill’s comments during an earnings call in November.
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