Kvaerner Construction continues its trend upwards as part of Kvaerner, following the Kvaerner Group’s restructuring announcement plans unveiled today by its president and chief executive officer, Kjell E Almskog.
Commenting on the announcement, Construction’s chief executive Keith Clarke said: "We are one of the three core businesses in Kvaerner and the changes outlined today will enable us to strengthen our performance by taking out loss making business streams. Initiatives we have already introduced to help change the way we trade, such as bench-marking and placing greater emphasis on our specialist skills, have already impacted positively on our bottom line as seen in our year end figures which showed a 50% increase in profit last year. These initiatives have now been formally incorporated into our business strategy and the next twelve months will be a period of consolidation and continued growth in profit."
Plans to review the steel fabrication business within Kvaerner Construction are underway and the business is to be transferred out of the Construction division to the group’s "other businesses" area from where it will either be scaled down or sold.
"Despite such high profile projects as the Tsing Ma and Jiangyin bridges, the steel fabrication business in the UK has made substantial losses."
Commenting on the sale of Kvaerner Corporate Development, Mr Clarke said it was now appropriate to use Kvaerner’s resources to strengthen the construction activity rather than diversify into equity holdings. Design/build for PFI (Privately Funded Initiatives) is an area that he sees as one offering positive growth.
He said: "We are strong in this market where we have seen a steady growth. For example we lead the market in PFI prison construction with five major contracts and two hospital projects including the Queen Elizabeth hospital in Woolwich which is one of the largest ones to have been let. We will continue to develop this market on our design and build skills. Under the Labour Government PFI has come of age with a growth in companies willing to specialise in the investment side of PFI but with no contracting skills. We are first and foremost a contractor and it is right that we should leave the investment side of the market to others who have that particular skill."
Kvaerner Construction has a turnover of £1.4 billion with approximately 34% of this from specialist companies.
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