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: SWOT Analysis
& Company Profile
Reference Code: WMCN0144CP
Published Date: APR-2010
www.worldmarketintelligence.com
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
© World Market Intelligence. This report is a licensed product and is not to be photocopied Page 1
1 COMPANY OVERVIEW.......................................................................................................4
2 BUSINESS DESCRIPTION .................................................................................................5
2.1 Key Employees ............................................................................................................................................... 7
2.2 Locations & Subsidiaries ................................................................................................................................ 8
3 SWOT ANALYSIS ...............................................................................................................9
3.1 Overview ......................................................................................................................................................... 9
3.2 Strengths ......................................................................................................................................................... 9
3.3 Weaknesses ................................................................................................................................................. 11
3.4 Opportunities................................................................................................................................................. 11
3.5 Threats ......................................................................................................................................................... 12
4 FINANCIAL DEALS ........................................................................................................... 13
4.1 5-Year Deal Analysis .................................................................................................................................... 13
4.2 Company History .......................................................................................................................................... 14
5 APPENDIX ......................................................................................................................... 15
5.1 Research Methodology ................................................................................................................................. 15
5.2 Additional Notes ............................................................................................................................................ 15
5.3 About World Market Intelligence ................................................................................................................... 16
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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List of Tables
Table 1:Andrade Gutierrez S.A. Key Facts ................................................................................................................ 4
Table 2:Andrade Gutierrez S.A. Key Employees ....................................................................................................... 7
Table 3:Andrade Gutierrez S.A. Locations and Subsidiaries..................................................................................... 8
Table 4: Andrade Gutierrez S.A. SWOT Analysis ..................................................................................................... 9
Table 5: Financial Deals........................................................................................................................................... 13
Table 6: Andrade Gutierrez S.A. History.................................................................................................................. 14
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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1 COMPANY OVERVIEW
Table 1:Andrade Gutierrez S.A. Key Facts
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
© World Market Intelligence. This report is a licensed product and is not to be photocopied Page 4
2 BUSINESS DESCRIPTION
Andrade Gutierrez S.A. (Andrade) is a diversified company operating in telecommunications, construction and
engineering, power, and public concessions sectors. Besides, the company manufactures and sells machines,
equipment, and materials for industrial and building installations. It has a major presence in Brazil, and select
markets in Latin America, Asia and the Europe.
The company mainly operates across three major segments, namely, Engineering and Construction, Concessions
and Telecommunications.
In the Engineering and Construction segment, the company is engaged in the construction of hydropower and
thermoelectric power plants, petrochemical plants and oil refineries, highways, airports, tunnels, overpasses, steel
mills, nuclear and industrial plants, sanitation and urbanization projects, ports and related works. It also offers
integrated engineering, financial structuring, process, product, and environmental quality solutions. The company is
also involved in the sale and manufacturing of machines, equipment and materials for industrial and building
installations. Andrade has expertise in the construction of large urban sanitation systems, civil works, and the
execution of integrated irrigation projects. The segment caters to both public and private clients. The principal
operating subsidiaries are Construtora Andrade Gutierrez and Zagope that operate across Brazil and the other
Latin American markets. Zagope, a Portuguese construction company acquired in 1987, handles operations across
Europe, Africa and Asia. For the fiscal year ended 2008, the Engineering and Construction segment accounted for
36.92% of the total company’s revenues.
In the Concessions segment, the company principally operates through Andrade Gutierrez Concessoes S.A. (AGC)
which is active in highway, energy, sanitation and airport management segments. AGC is also engaged in sewage
collection and treatment. In addition, AGC acquired 40% stake in Renovias Concessionaria S.A. which operates
346 km of highways across Sao Paulo. In 2008, AGC acquired the remaining 15% of Water Port. Waterport is
engaged in developing, building, operating and maintaining the water and sewage system across on the Sao Paulo
coast for a five year period. In addition, AGC holds 45.5% stake in Corporacion Quiport S.A. which is engaged in
the construction and operation of the Quito International Airport in Ecuador. The new airport will be managed by
concession for a 30-year period.
Light, a subsidiary of AGC, is the holding company that controls and administers other operating companies such
as Light Serviços de Eletricidade S.A. (Light SESA), Light Energia S.A. and Light Esco Ltda. These companies
operate in the electricity generation, distribution, and commercialization segments. Andrade also holds 16.84%
capital stake in Companhia de Concessoes Rodoviarias (CCR) that was awarded the Sao Paulo State
government’s concession contract for a 30-year period to manage the West Belt of the Mario Covas Beltway in
2008. The Concessions segment accounts for 23.82% of the total revenues.
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In the Telecommunication segment, Andrade operates through Andrade Gutierrez Telecomunicaçoes Ltda (AGT).
AGT is engaged in offering local voice, mobility, broadband, national and international long-distance, and data
communications and Internet services. The Telecommunication segment also provides data processing and credit
card processing services. In April 2008, its subsidiary Oi acquired Brasil Telecom (BrT) which is engaged in local
and long-distance fixed telephony concessionaire in the Federal District, and nine states in the southern, mid-
western and northern Regions of Brazil. The acquisition of BrT created the largest telecommunications company in
Brazil. The segment accounts for 38.87% of the total company’s revenues.
The other businesses include managing investment funds such as equity investment and operating as a closed
mutual fund for generating long-term return on invested capital. The activities are carried out through the subsidiary
AG Angra, which manages the AG Angra Infrastructure Fund (AGIF). AGIF plans to invest BRL 697.5 million in a
five year period in transportation and logistics, oil and gas, sanitation, renewable energy, and industrial
infrastructural segments. As of January of 2009, BRL 200 million has been invested in two ventures.
The construction of a Quito's airport (Ecuador), which is being executed by the company’s construction subsidiary
and Aecon venture, is expected to be completed in October 2010.
Recently, Companhia Energetica de Minas Gerais (CEMIG) entered into an agreement with Andrade Gutierrez
Concessoes and Fundo de Investimentos em Participacoes to acquire 39% interest in Light. CEMIG is also
planning to increase its stake in Rio Minas Energia Participacoes Sa.
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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2.1 Key Employees
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
© World Market Intelligence. This report is a licensed product and is not to be photocopied Page 7
2.2 Locations & Subsidiaries
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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3 SWOT ANALYSIS
Table 4: Andrade Gutierrez S.A. SWOT Analysis
Strengths Weaknesses
Opportunities Threats
3.1 Overview
Andrade Gutierrez S.A. (Andrade) is active in engineering and construction, concessions and telecommunications
segments. Diversified business portfolio and the ability to offer comprehensive solutions to specific industries have
given the company a definitive competitive advantage. However, competitive bidding, global economic slowdown
and environmental regulations could pose challenges for the company.
3.2 Strengths
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
© World Market Intelligence. This report is a licensed product and is not to be photocopied Page 9
Geographic Presence
Andrade is the leading infrastructure company with over 134,996 employees and operations across 20 countries
worldwide. It has a stable presence across a number of countries in Europe, Latin America, Asia, and Africa. In
Latin America, the company operates across Peru, Ecuador, Argentina, Venezuela, Mexico, the Dominican
Republic, and Antigua and Barbuda. It maintains an executive board for Latin America which has enabled the
company to consolidate contracts and operations in this region.
In addition, Andrade has also handled various projects across the US, Chile, Bolivia, China, Greece, and Iran. This
consistent presence and expansion of business to new geographies has enabled the company to increase its
revenues base over the years. The company recorded revenues of BRL 11,757 million for the fiscal year ended
December 2008, an increase of almost 49% over 2007. The revenue growth rate in the year 2007 was about
25.73%.
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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3.3 Weaknesses
3.4 Opportunities
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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Growth in Construction Spending in Asia-Pacific
The company can take advantage of growth in the Asia Pacific region by establishing its presence. Construction
spending growth, though expected to slow down in 2009, will still be higher than any other region in the world. The
non-residential category accounts for about 40% of construction spending. The rest of the market is divided almost
equally between the residential and infrastructure sectors. Most investment is expected to go into infrastructure
market. This market is likely to remain stable as many projects are financed through the use of development bank
funds throughout the region. Countries like India and Thailand offer tremendous opportunities as compared to
China and Japan whose construction spending is expected to slow down.
3.5 Threats
Competitive Bidding
Increasing competition for infrastructure projects could pose problems for the company. This is primarily because
commercial and residential real estate markets have become less attractive. The economic stimulus packages to
restore the economic growth give major importance to infrastructure development projects like civil engineering,
transportation, power and water utilities, and energy projects. The government grants these projects through
tenders with the lowest bidder granted the project. Many companies could lower tender prices to secure projects,
which could affect operating and profitability margins. With increasing construction costs there is a further
possibility for a decrease in liquidity and uncertainty in the long term sustenance of the business.
Environmental Regulations
The diversity of offering in terms of the number of service and sectors involved are subject to changing laws,
regulations and standards relating to quality, safety and environment. The company has to ensure that it meets
customer requirements, controls costs and minimizes business impact while complying with the regulations.
Concern for the environment has led to constant changes in the regulations governing the construction processes
and material utilization. Any non compliance in the process or materials used could result in huge penalties and
fines that could affect the revenues and goodwill of the company.
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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4 FINANCIAL DEALS
4.1 5-Year Deal Analysis
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
© World Market Intelligence. This report is a licensed product and is not to be photocopied Page 13
4.2 Company History
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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5 APPENDIX
World Market Intelligence’s “SWOT Analysis & Company Profile” reports utilize a wide range of primary and
secondary sources, which are analyzed and presented in a consistent and easily accessible format. We strictly
follow a standardized research methodology to ensure high levels of data quality:
Our company profiles are based on a core set of research techniques, which ensure the best possible level of
quality and accuracy of data. The key sources used include:
1. Company Websites
2. Company Annual Reports
3. SEC Filings
4. Press Releases
5. Proprietary Databases
Data Consolidation – Our analysts benchmark data from internal and external sources to verify historical market
data and to ensure that latest year data is fully supported by external opinion.
Quality Control – We rigorously conduct checks on our data and processes throughout the production of every
company profile, to ensure that the highest levels of data quality are maintained across our portfolio.
Figures in tables and charts throughout this report may not add up to totals due to rounding.
Any currency calculations used in the generation of data within this report have been calculated using constant
2008 annual average exchange rates.
Financial information for the company is taken from the most recently published annual reports or SEC filings
The financial and operational data reported for the company is as per the industry defined standards
Where required, turnover is converted to US$ using the average annual conversion rate as of fiscal year end
Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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5.3 About World Market Intelligence
World Market Intelligence is a premium information and marketing solution company focused on providing high
quality information and software solutions to drive business success. Our business spans three main areas:
Our global business-to-business networks provide high quality marketing and information solutions, online, in print
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Journal and World Construction Industry Network, have a legacy of providing market leading information services
that dates back over 130 years. To view our construction media sites, please visit
www.worldconstructionindustrynetwork.com, www.cranestodaymagazine.com, www.tunnelsonline.info and
www.ttjonline.com
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information on our construction research reports, please visit www.worldmarketintelligence.com
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Andrade Gutierrez S.A.: SWOT Analysis & Company Profile Published April 2010
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