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Off to sunny Spain

Business Alliances

Capita Symonds has established a new business in Madrid, and not just for the weather, reports Jackie Whitelaw.

When a raft of Capita Symonds executives pitched up in Madrid a couple of weeks ago just as the thermometer hit 42infinity you could be forgiven for thinking they were heading off in search of summer.

But, while happy to see the sun, there was a serious purpose to the consultants' trip as it marked the official launch of what they hope will be a fruitful alliance with Spanish project manager Grupo Gabitat.

It is relatively unusual to see a consultant keen to get to grips with the notoriously difficult markets of 'old' Europe when seemingly much more attractive opportunities beckon in the new accession countries of the east.

But Capita Symonds project management executive director Jonathan Goring believes Spain is worth a try. Project management is a relatively new science in Spain, he says, representing only 6% of development market. But it is growing at up to 30% a year.

Added to that, the Spanish government is increasingly looking to use private finance as a means of funding major projects - particularly for transport schemes and hospitals - and the lending banks all want the PFI teams to demonstrate in depth project and risk management experience as well as a healthy balance sheet.

Capita Symonds can provide that, but it needs the alliance with Gabitat to give the firm a way in to Spanish clients.

The busy Spanish market is also proving a big attraction for Goring's UK and US clients. 'The Gabitat alliance gives us a means of looking after our customers who want to go to Spain, ' he says.

'And because the cost of labour is cheaper in Spain it allows us to offer our clients project management support on a lower fee basis.'

According to Grupo Gabitat chief executive Juan Carlos Andreu, the Spanish are very amenable to working with UK companies, recognising that in the field of PFI in particular they have a lot to learn. Andreu, who came to the UK to search out a partner, was the main instigator of the alliance with Capita Symonds. He was introduced to Capita Symonds management division business development director Mark Blake, the two hit it off, and the relationship burgeoned from there.

Grupo Gabitat is one of the top five project managers in Spain, but even so, has a staff of only 30. 'We knew that if we wanted to work on the major PFI projects we needed to link up with a champions' league company, ' Andreu explains.

Goring and Andreu are waiting to see how business develops before assessing whether to make the Anglo-Spanish alliance more formal. 'To start with we have agreed to work on any projects over £50M together, ' says Goring, 'and any involving a non Spanish client of any size.'

Other UK construction businesses have tried and failed to go it alone in Spain. Goring believes that by tying up with a local firm his venture will not go the same way. And the alliance already has its first projects to back him up.

'This is very much an opportunist move, ' Goring admits. 'But if and when the PFI market really takes off in Spain we will have a foothold and can take advantage of that.'

Opportunities

The Capita Symonds-Gabitat alliance was already well on the road when Capita and Symonds announced their merger in March this year. 'And Symonds' opportunism was one of the factors that attracted Capita to the move, ' says Capita Symonds managing director Richard Marchant. His brief 15 months ago, as head of what was then Capita Property Services, was to double the size of his business in three years. Thanks to the Symonds purchase and the acquisition of the Percy Thomas Group last month, Marchant has achieved that target already. Turnover now stands at £180M and the company employs around 3,400 staff.

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