Keitel, speaking at a conference of European contractors and financiers in London, organised by analyst Schroder Salomon Smith Barney, added that Hochtief would limit its activities in the UK to “complex projects with acceptable profit margins”.
There has been extensive speculation that the firm, Europe’s third biggest contractor, would snap up a UK firm after missing out on Bovis to Australian contractor Lend Lease. However, its troubles in Germany, which led to a loss of £36m last year, are thought to have knocked it off the acquisition trail.
Keitel predicted: “The German market has dropped 30% and I don’t believe it will grow in the next two years. Over 5000 building firms are going bankrupt every year. We are going to have to have a downsizing in companies, or companies will have to leave the market.”
In the past five years, Hochtief has reduced its staff by more than half to 10,263 employees, and reduced risk by moving further into construction management, using the expertise of US subsidiary Turner.
Keitel said Hochtief’s problems related to the downturn in the German construction market, which accounted for 50% of the group’s turnover two years ago. Now it accounts for just 9%.
“We’re no longer a German contractor, but a contractor based in Germany,” he said. “We’re the leanest construction firm in Germany.”