Watpac – Bringing the Best Together
The acquisition of Watpac by the international BESIX Group has opened a world of new opportunities amid an era of unprecedented challenges.
Watpac is a company in transition. It is on a mission to diversify and take on larger, more complex building projects by leveraging its new financial and engineering strength delivered by BESIX.
With nearly 40 years of history in Australia, Watpac has built its own solid reputation for reliability in the key sectors of building, stadiums, defence, and public infrastructures such as health and education. Now, despite the global challenges of COVID19, the strength of BESIX is opening a new world of opportunity for Watpac.
“We’ve been targeting bigger and bigger projects,” says Jean-Pol Bouharmont, CEO of Watpac. “We’re moving from $50 – 200 million projects to $200 – 500 million projects.”
The BESIX takeover has been a real integration of the best of Watpac and its new parent. Watpac now has the financial strength to genuinely compete as a Tier One contractor. They also now have an in-house complex engineering capability which is unique in the Australian market.
“Our in-house engineering department can leverage the BESIX Group’s engineering department to target our traditional sectors as well as two additional sectors,” Bouharmont explains. “The first is in the building specialty sector, to go to more complex and bigger projects where we can really add value with our engineering capability and our national market exposure. This includes, for example, going into major metro stations, major architecture like museums, airport terminals, complex commercial developments. That’s the first sector we want to move Watpac into.”
The other sector Watpac is keen to get into is the civil and marine sectors.
“BESIX has been successful in marine projects all over the world and we know we can find success in that part of the business in Australia,” Bouharmont explains. “It means not only marine works but over water developments and bridges. In the civil space, we are pursuing industrial projects and water treatment plants. We will leverage the international BESIX capability to open those additional sectors. The new Watpac has a lot to offer to Australia and New Zealand.”
A Winning Partnership
The BESIX takeover of Watpac is really more like a partnership and Watpac’s clients will benefit from a degree of transparency and collaboration that has been absent in the Tier One market. Watpac is keen to collaborate with clients either through Early Contractor Involvement (ECI) or as Managing Contractor (MC).
“As BESIX has demonstrated internationally, our engineering department adds maximum value if we are involved in the project early,” Bouharmont explains. “We can apply our methodology with the designers. We know what the sub-contractor may face on the field. Therefore, we have people at project management level who can make sure the constructability and methodology are adding value through improving designs. Above all, our approach minimises risk.”
As well as supporting Watpac with capital and expertise, BESIX and Watpac have been collaborating in the other ways. “There’s a good mix of DNA between BESIX and Watpac because Watpac has already demonstrated the value it brings as Managing Contractor,” Bouharmont points out. “I really think we have that right balance here. Clients have seen the benefits of our early involvement and the comfort that provides in managing risk.” Bouharmont believes early involvement and collaboration will be even more important in the post-COVID world.
“There’s a possibility of accelerating the project route to market and to start work onsite sooner by having that early contractor involvement in the design,” he points out. “It means we’re able to fast track the start of activities and get workers employed again. The current method of establishing the design, then going to tender for construction, and then finalising design before any site works commence is simply too slow.”
A key reason why the BESIX takeover of Watpac has been successful is the international company’s commitment to the Australian market. “I think the approach of BESIX is different from other major international groups. They have much more understanding of how the Australian market is working and how we can add value by coming into the market the way we do,” says Bouharmont. “Until now we have been resistant to going into mega projects where we feel the risk allocation is not done properly and the big players are going into those tenders without a good assessment of the risk. Most of the time it ends with a project where there is a major dispute. That is not the way BESIX works. They go into projects where they know they will add value and the risk is clearly identified so there are no major surprises to any party in those contracts.”
Dealing with COVID
The biggest obstacle to growth continues to be the global COVID-19 pandemic. In many ways, Australia has been fortunate during the crisis, but it still poses businesses a challenge. “The situation in Australia has been less difficult to manage than in other parts of the world,” Bouharmont admits. “Australia is fortunate to be an island, albeit a big island and the crisis has been well managed. The population has been less affected and construction projects have continued thanks to stringent COVID safety precautions on all sites. There were early concerns about the supply chain, but we are pleased to say we’ve not been greatly impacted by COVID-19 so far.”
However, that does not mean that Watpac is not cautious about what the longer-term repercussions of the pandemic could be. “The concern is much more about the bottom part of the so-called V curve and how quickly the Australian contracting world can secure new projects to replace those coming to a close,” Bouharmont points out. “The stimulus and the way it’s delivered is important. The first action has been more towards taking care of people who have lost their job and then the second series is more to aid small contracting companies which I understand, but I really think it is important too to support the major contractors who are the big employers.”
COVID is not the only big environmental or social issue that Watpac will be addressing. The company has put in place a wide agenda focusing on its footprint and social impact.
“Our sustainability agenda is really a big work in progress within Watpac. Firstly, in the area of local employment and Indigenous empowerment, I have had the chance to participate in the execution of the Townsville Stadium where Watpac has done a great job and all the works have been executed by local workers. We also achieved more than our target on Indigenous employment,” Bouharmont says proudly, but acknowledges there is still work to do. “We now have to learn from what we’ve done well and apply that knowledge in each tender to maximise outcomes. On the environment, this is where BESIX brings valuable experience in areas such as water treatment and the new wave of renewable energy including hydro and waste to energy. Watpac will grow into this exciting sector. It’s an exciting work in progress.”