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Harrie Noy: Arcadis' global grower

Consultant Arcadis made waves last year by snapping up cost consultant EC Harris. Mark Hansford met chief executive Harrie Noy and discovered that the move was just the tip of the iceberg.

To describe international engineering firm Arcadis as one to watch - and watch out for - is an understatement. With more than 50 acquisitions under its belt since the early 1990s, it is out for growth and is clear about how it intends to achieve it. Last November’s acquisition of EC Harris for an undisclosed sum put the firm in the headlines in the UK, but the move really is just a small part of a truly grand global plan for this most ambitious of firms.

Established in 1888 as a Dutch firm specialising in wasteland redevelopment, Arcadis spent most of the 1990s and 2000s rapidly establishing itself as a global firm, providing consultancy, design, engineering and management services in infrastructure, water, environment and buildings. Now with 19,000 employees and revenues worth €2.3bn (£1.9bn) the firm cannot be ignored, and its growth plan shows no signs of stopping.

Major acquisitions

“We made two major acquisitions in 2011,” notes Arcadis chief executive Harrie Noy. “We merged with EC Harris and we bought the remaining 50% shareholding in our Brazilian operation.” Noy adds that even the might of £212M turnover EC Harris does not get the firm to where he wants it to be.

“Given that we see a lot of growth is in emerging markets, we should further expand in these markets through acquisition,” he says, citing South America and Asia as particular targets. “These markets are expanding very rapidly and I think we need a stronger footprint than we have, even after the EC Harris deal,” he says.

Arcadis already operates in over 70 countries including growth markets in the United States, Canada, Brazil, Chile, China, Japan and the United Arab Emirates. It is this desire to expand into growth markets that made the EC Harris merger so attractive, he says. “This fits very well with our plans for EC Harris, which also wanted to expand in these areas.”

“We entered Brazil in 1999 as we saw opportunities. Today everyone is looking at Brazil, but I think we are ahead of the game”

EC Harris has a long standing heritage and has 48 offices in 28 countries, including many across central and eastern Europe, the Middle East and Asia. The company has focused on international diversification resulting in significant recent growth in Asia and the Middle East. In 2011, work in these regions was projected to provide 32% of the company’s revenues with 57% coming from the UK and 11% from other European countries.

Noy is particularly eager to capitalise on EC Harris’ buildings expertise as a way of getting a serious foothold in the booming Chinese market. “There is massive, really massive urbanisation going on in China. If you look at the number of cities there now with more than 1M people it is getting close to 1,000. So if you look to Asia the opportunities will be in the buildings market and the type of capability that EC Harris brings will be a good way of entry,” he says. Pre-merger Arcadis had around 550 people in China. With EC Harris on board that has now become 700. And this Noy wants to grow still further.

Chinese market

“The infrastructure market is still very local, especially in China,” he says. “But the buildings sector is a better bet as multi-nationals are investing in China and they are looking for consultants that they are familiar with, and that can help them with their projects.”

Once Arcadis is established in a country, other markets will open up, he believes. “It is going to help us in positioning ourselves so that local companies can join us and from there that opens other markets. A key area in time will be environment,” he says. Developing the business in other markets will demand the right sort of people - which is another plus from the EC Harris merger, he says.

“EC Harris has the type of people with the capability, experience and willingness to work internationally. There is a strong need for those types of people. That doesn’t mean that we have all kinds of programmes in place to expatriate loads of people, because that is really expensive. What we need is to work with
local people, and it is helpful if you have people who can do that,” he says.

“We are not a commodity supplier. Our philosophy is to aim for services high in the value chain”

What Arcadis has just achieved in Brazil is a good example of how to develop in emerging markets. Last summer’s acquisition of the remaining 50% of its Brazilian operation Arcadis Logos was the culmination of 12 years development of the business. Back in 1999, Arcadis bought in to a small project management outfit run by engineers. Then, it employed 200 people. Today, it employs 2,500.

“We entered Brazil in 1999 as we saw opportunities. Today, everybody is looking at Brazil but I think we are ahead of the game,” says Noy. “We were able to identify and acquire a very good project management outfit very similar to EC Harris. Logos was a pretty unique firm that felt it needed access to the knowledge available in a worldwide firm such as us, so we came in, in exchange for a 50% share.”

Harrie Noy’s CV

  • Dutch national
  • Graduated with MEng in 1951
  • Chairman of Arcadis executive board since 2000

Previous positions:

  • Various Arcadis management positions, most recently as a member of the executive board.

Other roles:

  • Advisory board member Euronext
  • Supervisory board member at Nederlandse Gasunie/Gas Transport Services
  • Board member PSIB Foundation
  • Board member VEUO (Dutch Association of Listed Companies)
  • Board member Management Studies Foundation
  • Supervisory board member College of Arnhem-Nijmegen
  • Chairman, Vilente Foundation supervisory board


Over the past five years the Brazilian firm has grown tremendously, fuelled by the mining industry, which needs to invest hugely in infrastructure to get iron ore won hundreds of kilometres inland out to the coast for shipping.

“We do the project management of huge multi-billion dollar investment programmes,” says Noy.

Mining giant

Much of this work comes from mining giant Vale. Arcadis’ latest win is believed to be the largest ever awarded by Vale, and will earn it £50M over five years as it project manages construction of a £1.75bn iron ore plant and associated infrastructure.

Being in with a firm like Vale opens up opportunities around the globe - Arcadis is working with it on projects in Chile, Oman and Malaysia.

But Brazil is more than mining now. Arcadis Logos’ order book is very strong and this is even before the large investments coming to market in Brazil related to infrastructure modernisation and the 2016 Olympic Games in Rio de Janeiro.


Retiro Baixo hydropower plant in Brazil

“A lot of growth in Brazil is private sector - whether it is mining or energy - and we think that whatever happens it will continue to grow. Then for the Olympics, São Paolo and Rio’s airports don’t have the capacity to cope so there will be huge investments in transport,” he says.

Foreign targets

Elsewhere, Arcadis is looking in all the usual places - the Middle East, Europe, and the US. Following the EC Harris merger, the US accounts for 43% of Arcadis’ revenues with close to 6,500 people based there. “From a geographic point of view it is our biggest market,” says Noy. Not bad, when you consider the firm entered the US in 1993 by chance after Noy took a phone call from a US firm looking for a European partner to help it with a US client which wanted to expand into Europe. Arcadis obliged. The rest is history.

Noy now sees the US alongside South America and Asia as one of the global bright spots.

“Environmental work is the cornerstone of our business. When the financial crisis started in 2008 many clients started to postpone environmental projects. But now industrial clients are starting to spend again and in the third quarter of 2011 our environmental division grew 9% organically. That was a tremendously good achievement,” he says.

Darker clouds inevitably surround public spending as government austerity measures around the globe bite.

Government spending concerns

“Our concern is government spending. Across the board, in Europe and the US, spending is under pressure - with most pressure at local government level,” he says. “At central government level, spending is holding up to a reasonable level. In the UK, the transportation side is not that good, but in France, the Netherlands and Belgium, larger projects are holding up well.”

Noy is particularly excited by plans for a £37.2bn ring line for the Paris Metro, which is expected to be Europe’s largest infrastructure project, should it come to fruition. Arcadis has got some early work on it already, carrying out geotechnical investigations.

Noy has a fondness for France, with Arcadis having worked on the magnificent Millau Viaduct at an early stage.

“We did the basic design, and then [Lord] Foster came in. He didn’t change the basic design but he did change the colours. And he did improve it,” admits Noy. “Engineers can benefit from the involvement of architects, you know,” he says. “I am absolutely convinced that the quality of civil engineering design could be improved if architects were involved early.”

Arcadis employs more than 1,000 architects, so Noy probably would say that.

Untypical engineering company

“We are not developing a typical engineering company,” he stresses. “We are a professional services organisation that combines all disciplines to build high quality, sustainable lives.

“Engineering is just a piece. EC Harris is a quantity surveyor which has broadened into programme management. That’s another piece.

“My view is that we should combine all these types of expertise so that we can deliver the best schemes.”
It is this message that will drive the initial integration of EC Harris into Arcadis.

“The first focus will be low hanging fruit,” says Noy. “So we are talking to our existing clients who we think can benefit from EC Harris’ services. It is quite exciting.”

Noy is also determined to drive up EC Harris’ profitability.

“We are not a commodity supplier. Our philosophy is to aim for services high in the value chain, and get involvement with clients early,” he says.

Arcadis’ margin is around 10%. “And we want to move to a higher level,” he adds.

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