New company emerges on the first of January
• Construction, Ceramics, Industry, Road concessions and Real Estate are the five main areas of the new holding;
• The Chairman of the New Group will be Filipe Soares Franco.
Following the merger of OPCA and Sopol, a new business Group bearing a new logo will emerge in the civil construction and public works market on the 1st January 2008.
This new group led by Filipe Soares Franco, will reinforce its top ranking position in the Portuguese market, and work towards market leadership in the short term.
With its new identity still in the development stages, the new Group will emerge as a result of a lengthy integration/fusion process handled by specialized consultants, combining their efforts to select the best practices from OPCA and Sopol to create the new company.
According to Filipe Soares Franco, the new Group aims to reach a much stronger position than that which would have resulted from an OPCA / Sopol partnership. The integration of the two companies has been carefully studied to give the arising company greater dimension, greater critical mass, increased performance and efficiency.
Although there are still several strategic options to be decided on the organizational side, the five main business areas have been defined as have the names of those who will be responsible for the five areas.
Filipe Soares Franco will be both chairman of the holding and directly responsible for Real Estate. Jorge Grade Mendes, previously chairman of Sopol, will be the new chairman for the Construction area. It is within this business area that the effects of the merger will be most felt and where the greatest alterations will take place. The remaining business areas which will continue without any major alterations are, the Ceramic business, headed by Jorge Veiga, Industry, headed by Mário Rui Matias, and Concessions by André Riscado, currently awaiting government approval to merge OPCA’s shares with ES Concessões. ES Concessões is the company that holds the BES Concession shares, and who recently announced it was forming a partnership with the Mota-Engil Group for the concessions in transport business.
Business diversification and internationalization
This new business group will continue to follow the OPCA Group strategy. In recent years, OPCA evolved from a mere construction company, when it moved into new business areas by acquiring ceramic, marble and pre-fabricated concrete companies. Following these acquisitions OPCA grew to become a business group with reinforced presence in the real estate and road concessions markets, whilst investing in internationalization at the same time.
This new business Group will have a stronger view of both the construction and the civil works businesses, speculating not only in related businesses and services, but also focusing on the internationalization process, namely the Spanish and African markets.
Talking about the merger process, Filipe Soares Franco is keen to stress the enormous effort made by everyone who was directly involved in the OPCA and Sopol integration process. It is also important to note that the entire procedure has been a completely transparent one, with a constant circulation of internal information about decisions taken, in order to reduce the anxiety a process such as this would naturally cause those affected by the changes.
The acquisition of the total of Sopol’s capital by OPCA, will be authorized in February this year by the Competition Authority, representing an important step in the growth strategy set out by the Group under the leadership of Filipe Soares Franco since 2000 - on OPCA’s 75th anniversary.
SOPOL, with its staff of 300 and a turnover of around 130 million euros, was a general construction company with a steady growth pattern over the last 10 years. During these 10 years it was part of the A. Silva & Silva Group, and a partner of Dragados, a large Spanish company, from 1999 to 2006.
Internal discussions and ambitous objectives
This current SOPOL integration/merger process is the culmination of a path set out by an ambitious Group, aiming to quickly reach a turnover of 1000 million euros in order to gain dimension and attract other types of investors to their project, and possibly floating the company on the stock market.
When the team led by Filipe Soares Franco took over control of the company in 2000, this would have been an impossible dream. The company was in a financially difficult situation, with a negative liability of many millions of euros and a negative Profit and Loss Account.
The company underwent a “shock treatment”. Many internal discussions took place and staff were pressured into rationalising the organization of the company and cutting down costs.
In order to do this, we had to look beyond the construction sector into all other related business areas to try to increase the returns on generated capital.
It was within this context that, together with the business opportunities considered compatible with the growth strategy, the acquisitions of Pavicentro for the pre-fabricated business area, Marmetal /Margrimar for the marble business area, and Aleluia for the ceramics business area, took place. Through Aleluia alone, OPCA gained the control of a 50 million euro business volume, half of this in exports.
Another strategic move was made in the real estate business with the revival of GEOTRÊS, a company specialised in the high and luxury ends of the market – top quality projects in the prime areas of Lisbon, Cascais, Oeiras, Porto or Algarve
On the internationalization side, and preferring countries where language is not a barrier, where it is easier to learn the law, the culture and local politics, the African and Spanish markets were obviously those chosen for OPCA’s expansion process. With reinforced business in Cabo Verde and Angola and several projects under study for S. Tomé and the Congo, in 2007 OPCA acquired the Spanish construction company Sarrion – a company with major projects and a strong team, capable of working with OPCA, opening up new perspectives and new business opportunities.
Following the acquisition of Sopol with all its know-how, this diverse business group, whose present turnover is about 500 million euros, has gained the necessary conditions to soon become a leader in the Portuguese construction and civil works market .