HOCHTIEF Asia Pacific Division
- Success story continues
- Attention focused on new growth markets
- Division benefits from economic stimulus programs
- More project successes chalked up
Through its majority interest in the Leighton Group, HOCHTIEF has not just a presence, but a leading position in the Australian and Asian markets, including the Gulf region. HOCHTIEF Asia Pacific delivered another impressive performance in 2009, despite the fact that the financial crisis has made itself felt in these regions, too. New orders totaled EUR 12.42 billion. Contributing to Leighton’s success were the infrastructure and contract mining segments in particular.
Focus on growth markets
A core element of our subsidiary’s strategy is to focus on high-growth markets. Increasingly, this also includes the market for offshore oil and gas projects where, for example, civil engineering work is carried out, storage devices and port installations constructed, pipelines laid using special-purpose vessels and worker accommodation built.
One example of this new, high-growth segment is the Gorgon project to develop a gas field off the coast of Western Australia. Since the second half of 2009, a joint venture including Leighton subsidiary Thiess has been designing and building a village for around 3,300 workers. Offshore on Barrow Island, the company is also preparing a site for the construction of a gas-toliquids plant. The two contracts are worth approximately EUR 570 million in total. Leighton Contractors is also involved in the Gorgon project: In November 2009, the company secured the contract to develop a 2.1-kilometer jetty off B癢rrow Island together with partners. Construction work on the project worth some EUR 560 million is scheduled to commence in October 2010.
In Australia, Leighton is also witnessing a particularly positive trend in the power and energy supply business. The same goes for the education and healthcare segments initiated by the Australian Government’s stimulus programs.
In the Arabian region, and in Abu Dhabi, Qatar and Kuwait in particular, our subsidiary continues to see considerable growth potential in the infrastructure and building construction segments.
Positive effects of the economic stimulus programs
In 2009, the Australian government approved economic stimulus programs worth some EUR 60 billion in total. Leighton has benefited from this economic aid in the form of additional new orders. These include, for example, the contract to extend the rail link between Maitland and Whittingham. Since the government programs will run for several years, it is likely that investment in Australia’s economic and social infrastructure will remain at a relatively high level at least over the medium term.
The government in Hong Kong has also announced extensive economic stimulus programs. Over EUR 17 billion in total is to be pumped into road, railway, drainage and urban renewal projects by 2011, which would double the current level of spending.
Associate companies
Leighton has exetended its cooperation agreement with Macmahon, an Australian construction and contract mining company, with no termination date in place. One example of the collaboration between Leighton and Macmahon is a joint venture constructing a 220-kilometer railway line in Pilbara, Western Australia, which will be used to transport ore. The contract is worth roughly EUR 267 million. Work on the project includes moving around 1.2 million cubic meters of earth, building ten bridges and installing 840 kilometers of fiber optic cable.
Our investment in Devine has also benefited from the stimulus package with sales of residential housing in the affordable housing market being strong in the 2009 year.