Water and sewerage specialist Biwater has been cast as a contractor and supplier, but it is shattering the mould with £10.4M worth of consultancy work.
Diarmaid Fleming reports.
Many consultants' expansion strategies have involved moving away from traditional consulting work, but for Biwater Treatment Services the opposite has been the case. Designercontractor Biwater is keen to establish a reputation for more than just getting its hands dirty.
'Biwater has an exceptionally strong brand name. Even though consultancy work provides us with a significant turnover, we still have difficulty being acknowledged as a consultant.
We have been competing with a lot of traditional consultants who have been around a long time and who have fantastic names and reputations. The NCE award will do a lot for our credibility as a consultant, ' says Treatment Services director Peter Jarema.
He says the Biwater name can be more readily associated with hands-on installation and operation of water and treatment facilities but that this masks his firm's design capability. 'Traditionally, we have done a lot of our design in-house.
With the opportunities presented by the outsourcing of operations and design, we can effectively be regarded as a water company ourselves, doing more and more of the water companies' activities, ' says Jarema.
With privatisation and new European Union quality standards to be met, the water sector has been a font of work since the 1990s. However, the sector is becoming steadily more challenging. Regulator Ofwat has been demanding steadily greater cost control on investment by water companies in a bid to keep customer charges down. Huge volumes of work have flowed from upgrading the UK's water and wastewater infrastructure to meet European Union standards through a series of five year Asset Management Programme (AMP) works, with AMP3 currently in train. There is a good deal more work in the pipeline, says Jarema, but diversification is needed.
'We need to diversify to avoid the 'AMP cycle' - in between being locked into cycles there is a hiatus affecting both consultants and contractors. We want to develop the business so we can ride out these waves, ' he says.
As more work is done to improve the UK's infrastructure, he predicts the current surge of work will carry companies through. 'AMP4 [kicking off in 2005] will have different legislative demands which require different types of skills.
Smaller works and treatment plants will be needed but these will require more labour intensive solutions. Even though a plant may be small in size, there will still be significant technical involvement.'
'Clients are getting better value for money and have cut prices down, although profits are at acceptable levels. The shift now, however, will be all about getting more value out of the assets you have, such as spending more money on underground infrastructure and buying the technical knowledge and capability to understand what's happening underground. If you can cut your leakage down by half, for example, you need much smaller treatment works, ' Jarema says.
He sees environmental work and sustainable solutions as fertile areas for diversification.
'Looking at how water is taken, used and returned to a catchment and looking at the sustainablity of catchments from a strategic level is going to be a key area.'
Staggering growth of over 700% in UK work was achieved in 2002, but 12% of the 629strong company's £10.4M turnover was carried out abroad for the year to March 2002. Significant operations in Poland, Cyprus and Bulgaria put Biwater in a strong position to win work on the infrastructure upgrade projects that will certainly be needed when these countries become full members of the European Union.
Headquartered in Heywood, Lancashire, Biwater's eastern European operations also provide access to much needed manpower. 'We are essentially a man-hour business like other consultants. If you can't get people you can't grow. We have found very capable local staff who we can train. In Bulgaria for example, all the graduates have MSc degrees and are excellently qualified. This suits us - while some companies bring in expertise, we prefer to bring in young qualified staff, give them multi-disciplinary experience and turn them into water engineers, ' says Jarema.
The ambition for the future is to be seen as a turnkey provider of solutions, and not as a provider of kit, as some see Biwater now, he says. 'Much of our work is from repeat business and organic growth through partnerships.
'But it hasn't always been recognised by others that we have a centre of excellence and huge technical capability, covering design, installation and operation. We want to be known as a turnkey solutions provider, with everything done in-house.'