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What is the origin of Queiroz Galvão, what sector did it start in, and what lines of business does it have now?

The Queiroz Galvão business group has its origins in a small civil construction company dedicated to roadworks in the state of Pernambuco. It was set up in 1953 by four brothers, all engineers by training, and during its first decade its presence became widespread throughout the whole of the northeast region of Brazil. It extended its activities to the water supply sector, and subsequently added other business areas, such as the real estate segment in the 1970s and the petrol and gas division in the 1980s.

From there the company expanded throughout the whole of the territory of Brazil and continued its process of diversification, which in the following decades consolidated Queiroz Galvão as a vast business conglomerate which gradually positioned itself in the sectors of iron and steel, agribusiness, naval construction, energy and concessions.

In the international sphere, basically in the areas of infrastructure, energy, iron and steel and food distribution, in the last 20 years to the present day the group has increased its activity in Latin American markets and today has a strong presence in Latin America and Africa.

 

What are its goals with its arrival in Spain?
Spain was not an unknown quantity for Queiroz Galvão. For almost eight years our logistical headquarters for the food distribution division was located in Bilbao. There are also factors involving bilateral relations that make implementation here attractive, as Spain is the main foreign investor in Brazil. Some of our executives have even attended Spanish business schools, which are among the most prestigious in the world.

Its recent arrival in Spain in August 2016 is the culmination of the strategic decision to internationalize the engineering and construction segments, bringing the decision-making and corporate support center nearer the foreign markets where we already have activities deployed. Among the alternatives valued for the corporate headquarters, Madrid offers logistical and financial advantages and opportunities for recruiting skilled labor, in addition to being a hub of synergies for the development of construction, infrastructure and energy businesses.

 

How would you rate the experience of working with Invest In Spain for your roll-out in Spain?
The welcome and guidance we have received from Invest in Spain along with other public institutions has been crucial for generating confidence and conviction when taking both legal, financial and commercial decisions. They have significantly eased our implementation. The multidisciplinary team at ICEX offered support for gathering and fulfilling the essential requisites for the correct framing and classification of Queiroz Galvão, for obtaining favorable assessment reports from the various government authorities, and for moving expatriates and their families. But above all they have been extremely useful for rapidly and effectively helping us obtain all the certificates, public registrations, licenses and permits necessary for the deployment of the company and the start-up of the corporate headquarters.

 

What was the investment in the installation and how much do you expect to invest in the future?
The investment in the roll-out is made over a time sequence, which is still ongoing. For the time being our headquarters located in the Azca-Castellana area is intended to house 60 employees in premises with a usable area of approximately 1000 m². This new headquarters has been conceived to be the decision-making and corporate representation center of Queiroz Galvão at the international level. We can report that the direct investment for the adaptation of the facilities, acquisition of the equipment, moving and start-up expenses exceeds 1 million euros in this first stage, most of which has been outsourced to local suppliers.

 

How many jobs have you created and how many do you expect to create?
For the moment, as this is a corporate headquarters, the implementation has been done by moving expatriates who are already familiar with our procedures and markets of action. However, we have recruited 12 employees locally in the last two months, and the plan is to increase this contingent over the next year.

It is certainly true that most of the expatriates are currently Brazilian in origin, but we are aware that the diversification of nationalities enriches and complements our international aspirations. If we take our international subsidiaries as a reference, today we have employees from over 30 nationalities.

Our goal is for Spain to become a recruitment center for skilled labor and services, so more employment will be generated as new projects come on line, including both direct jobs and indirect jobs due to the outsourcing of services or partnerships with local companies.

 

What role does Spain play in your international strategy?
In the first place it should be noted that the ultimate aim of our presence here is not the domestic market. Although we are now in a period of recovery, we know that the crisis has tightened the market, the same way as in Brazil. But we shouldn't forget that our market is international, and the situation in the domestic market in Spain and in Brazil is not preventing us from achieving our goals.

Spain for us represents the Silicon Valley of the civil engineering and infrastructures sector. The critical mass of high-quality companies and capacities puts us in close contact with the technical and knowledge resources required by today's globalized markets. Our partnerships with Spanish companies will certainly be key to our future growth. We have already had successful synergies with some Spanish contracting companies in both Africa and Latin America, and we will shortly increase the more than 30 Spanish goods and services providers we have at the moment.

Lastly, in commercial terms, the possibility of becoming associated with Spanish companies to bid for and contract projects enhances our business outlooks both in Latin American markets–which we already share–, and in African markets, which are less habitual for Spanish companies. Nor should we forget the growing interest in Spanish companies due to the recent opening of the Brazilian infrastructures and concessions market. Our presence in Madrid could serve as a vector to drive this trend and generate trust in Spanish companies looking for a solid local partner.

 

What projects do you currently have underway and what are the upcoming challenges?
We are deployed in 26 countries in Africa and Latin America, where we develop infrastructure and energy projects that are essential for sustainable development and the integration of these countries in their respective regions. We seek to promote the creation of employment by hiring mainly local labor and ensure the transfer of technology.

To give the most recent examples, in 2016 we completed an 80 MW electrical power plant in El Salvador that will produce clean energy for more than 150,000 inhabitants; in Peru we are completing the Nestor Gambetta tunnel which will improve the accesses to the Port of Callao and Lima International Airport; and a standout project in Africa is the delivery of the Tamale Airport and the series of Kwame Nkrumah viaducts in the Accra ring-road, both in Ghana, where we also recently inaugurated the Kasoa road improvement project, including the construction of schools and a polyclinic.

In the management of infrastructures and services, it is worth highlighting the Southern Interoceanic Highway in the Andean region of Peru, and the collection-classification and treatment of municipal solid waste in the metropolitan area of Luanda, the capital of Angola.

The future outlook, notwithstanding the recession in some of our markets caused by the fall in oil prices and commodities, and in spite of the political and institutional crisis in Brazil and the financial restrictions and limitations produced by these circumstances, we can say that our international activity continues to be healthy. Our commercial portfolio contains projects for slightly over 3 billion dollars in total, of which the African markets account for approximately 60%. By sectors, transport infrastructures represent 35% of the portfolio; water and sanitation, 30%; energy and O&G (oil & gas), 20%; and finally, infrastructure management, 15%.

2017 will see the launch of some emblematic projects with high technical demands and complexity: in the Americas we will start up a 9000 PSI high-pressure compressor station for oil extraction; in sub-Saharan Africa, a thermoelectric plant that will generate 160 MW in combined cycle; and there are numerous other challenges in transport infrastructures on both continents, as work is advancing in two monorail projects, an avant-garde urban mobility solution for mass public transport in which Queiroz Galvão has already demonstrated its experience.