This is one Frenchman who is not going to get caught boasting: “We have no intention of conquering the world. If we are number one, it’s almost by chance.” These are the self-deprecating words of Philippe Ratynski, chairman and chief executive of Vinci Construction, which as part of the Vinci Group is once again Europe’s biggest contractor.
Sitting in his top-floor office at the Vinci headquarters in the west Paris suburb of Rueil-Malmaison, Ratynski exudes serenity and calm. In typical Gallic fashion, his only slight concern that morning is that maybe he should have gone to the hairdresser before the photo shoot that will follow the interview.
At the age of 44, Ratynski is still young, and yet has already ruled his empire for two years. His background is impressive: a graduate of the renowned French business school, HEC, he has a law degree and is also a qualified accountant. Before joining Vinci Construction he held senior roles at management consultant Arthur Andersen and contractor Sogea.
Vinci Construction’s turnover was €8.2bn (£5.7bn) last year and is expected to hit €8.9bn (£6.2bn) for 2005. Ratynski beams: “The orders are historically high, with a very high level of demand.”
To stay ahead of the peloton, Vinci has had to make some tough decisions. Ratynski points out that the group closed down a German subsidiary, Bruggeman, last year. He says the turnover wasn’t bad – about £17.5m – but the market had become too difficult. “We preferred to stop before losing money,” he says, a little defensively, explaining that it is part of the life of a group the scale of Vinci to make these calls.
Apart from that, Vinci Construction, according to its boss, starts 2005 on a “very strong basis” after the recent completion of some major projects. One of the highlights of 2004 was the 2.2 km Rion-Antirion bridge in Greece. This required seven years of work and was handed in five months ahead of schedule. “We are extremely proud of it, because it is the first seismic bridge in the world and the result of the common work of all the divisions of Vinci. It is a good, very elaborate project in terms of concession and financing,” Ratynski says and concludes by labelling it “a human success”.
This is a typical Ratynski phrase. The human dimension of the building industry comes up throughout the conversation. This flowery management-speak hides an extremely shrewd strategy. Vinvi uses a decentralised management system and meticulous preperation to grow its business. In the volatile markets of eastern Europe, for example, it has been growing by 30-40% a year. “Networking is essential. We mesh a territory very carefully. We end up knowing all the mayors, architects and competitors. We can almost intuitively guess who to work with. The more you know and the more present you are, the better your profit is.”
Vinci is the first provider of the track for high-speed trains in the UK and France, it has private and public partnerships in Germany for 40 schools and also thrives in Belgium and Holland. Further afield, it is looking at roadways projects in Libya, including a €261m (£183m) river site scheme.
Ratynski casts his eye across the Channel: “In the UK, we’d like to develop and acquire regional, medium-sized companies in order to intensify our network. But we don’t want to acquire national companies. The orders and profits have increased. It’s all very well but our primary strategy is no further development. We are not in an aggressive or conquering strategy at all.”
Ratynski insists that potential partners should satisfy some basic requirements: “If we buy something, we don’t want to fail. We want a healthy company with people who are like us and who really want to work with us and share the same values. If that doesn’t happen, that’s not dramatic.” The UK’s PFI craze hasn’t caught him. In fact, he thinks that it is “un miroir aux alouettes”, or lark’s mirror, which is a nice French expression for something that looks good but which has no real substance. Vinci is currently taking over sites from Jarvis, but walked away from the firm’s PFI bidding interests.
Ratynski might be sitting pretty at the moment, but he has spotted some worrying trends: “We’ve noticed that European companies have consistently withdrawn from the international market. It is a risky market but also one where money can be made,” Ratynski says: Vinci Construction’s Grands Projets division is the most profitable part of the company.
The main Western competitors left are Bilfinger, Hochtief and Bouygues but it is the Chinese, Korean and Middle Eastern firms that represent the greatest threat, he believes, because their methods of work and their bidding strategy are alien to Vinci’s standards. “As long as we sell what we do best and don’t lose ourselves in huge bidding procedures, that‘s fine,”says Ratynski.
As the interview ends, Ratynski again scoffs at the notion of being number one: “Our strategy is to be excellent. That’s what the group and shareholders want, so we are coherent. We are not asked to go and conquer the world and we don’t feel like it either. We prefer to cultivate our own garden.”
Friend or foe?
Ratynski on Bouygues:
“Bouygues has been the leader for a long time. Their main strength is the ability to organise themselves on large-scale projects very quickly and efficiently, whereas we’re more decentralised. However, Bouygues is changing at the moment. It used to be the international leader and it isn’t anymore, so it has to change its model of management. It is fundamentally a very strong company and without doubt our main competitor, both on the French level and on the international scene. However we do get on well generally with people from Bouygues. We work together for the highway operator Cofiroute and have teamed up on a couple of bids. We partnered on the Stade de France, for example.”
Gabriel on Vinci:
“I think it’s a great group with excellent results. It has a very transparent strategy and performs remarkably well on the stock exchange. Its strategy is really coherent. I have nothing more to add.”
Why French firms are the leaders
... according to Ratynski
“What is unique is the organisation of work in France. The largest part of added value is within the enterprises and not with engineers. The engineering skills are very high but that is not where the financial power lies. It’s the same with architects. We integrate conception within our way of working. We are both contractor and project manager, hence we have a lot of power. The other difference is purely technical. In France we make the concrete and we don’t have subcontractors. We produce everything and we manage the project from conception through production of concrete to the delivery of the building itself. I think that we have a more intimate relationship with the production.”
... according to Gabriel
“French engineers were at the origin of modern techniques of construction. It was a French engineer that patented artificial cement and French engineers, too, who created reinforced concrete. Architect Eugene Freyssinet has been responsible for the post-tensioning that is used in all buildings today. France’s building operations have had to live up to that historical legacy.”