Corporación M&S of Costa Rica is the leading heavy construction enterprise operating in the whole of Central America. Piotr Sadowski reports on the company’s success story.
In 1992 two Costa Rican businessmen, Carlos Cerdas and Marcos Solís, used their entrepreneurial drive to set up a heavy construction company with an aim to rapidly expand across the markets of Central America. This was an ambitious objective, as at the time no other business in the country had such a vision. Operations thus moved very quickly beyond Costa Rica, firstly to Nicaragua and subsequently to other countries in the region. In 1996 Corporación M&S became involved in heavy construction projects in Belize and Panama, followed by Guatemala and El Salvador in 2000/2001. As a result, in just over 15 years the company has experienced constant growth by penetrating local markets in each of the different countries of its operations. Today, Corporación M&S is not only the pioneer in opening its activities to international markets, but it is also the only enterprise with offices and operations across the whole of Central America, with annual growth rates at an impressive 20-30 percent.
OUTSTANDING BUSINESS PARTNER
From the very outset of its operations, Corporación M&S has strove for continuous improvement of its people, equipment and technologies, in order to perform works to the highest standards of quality, while at the same time offering lower costs and shorter completion times than any other local or foreign competitor.
The company has become the leading contractor for heavy construction projects, thanks to its enthusiasm about the industry, an ethical approach to business, transparent communications and commitment to social and environmental responsibility. “Above all, we are driven by our dedication to unique customer service,” says Bernal Gonzalez, financial director at Corporación M&S. “Satisfied clients are the most important indicators of our success and we win their approval because of the high standards on our projects. We are a transparent company open to working with a whole variety of clients.”
Having established an excellent reputation as a reliable and trustworthy business partner, it is not surprising that Corporación M&S manages to successfully win tenders on a wide range of heavy construction projects across Central America. In order to strengthen its brand name even further, the company continuously works on further improving the already high standards of delivered contracts. Corporación M&S therefore actively invests in new equipment used in its construction activities. Having embarked on implementing the ISO: 9001 quality management system approximately one-and-a-half years ago, it is currently on schedule to obtain the full certification by the middle of 2008.
Despite being a young company, Corporación M&S boasts an impressive track record, having to date carried out great variety of projects in Costa Rica, Nicaragua, Belize, El Salvador, Panama and Guatemala. The contracts can be divided into categories of rural highway improvement, construction and reconstruction of roads, large-scale earthmoving projects including operations in quarries and mining, as well as creation of roads and drainage and irrigation solutions for the agricultural industry, and turn-key hydroelectric works in the full scope of design, construction and operations. Concrete-derivative materials such as paving stones, blocks and other products used in all areas of the company’s works are made in the Complejo Industrial Nindiri in Nicaragua, the largest facility of its kind in Central America.
Rural highway improvement works tend to be carried out in isolated areas and focus on widening and paving old and deteriorated dirt roads. The main difficulties in such projects relate to logistics, however Corporación M&S possesses the ability to ensure an adequate supply of parts and provisions for camps located in often remote locations. In addition, the company has excellent experience in extracting materials from quarries and moving large amounts of earth even under extremely rainy conditions. Examples of projects completed so far include the two phases of San Benito – El Rama highway works in Nicaragua to the value of $8.8 million, La Gateada–Nueva Guinea project in southeastern Nicaragua to the value of $23 million, as well as the Southern Highway in Belize, where Corporación M&S was involved in improving two sections of the highway at a value of $23 million.
Projects focusing on construction and reconstruction of roads are carried out in more accessible areas and involve removal of old asphalt surfaces, reconstructing base layers and resurfacing them with fresh asphalt for heavy traffic. In this area of work expertise in asphalt technologies is one of the crucial success factors, particularly since asphalt used must meet the demanding conditions posed by warm tropical climates. Here, Corporación M&S’s projects include the large Inter American Highway improvement program in Costa Rica, already valued at $23 million; the three phases of the San Lorenzo–Muhan Tramo project in Nicaragua to the value of nearly $30 million, and the two sections of the Nejapa–Apopa works in El Salvador, valued at $34 million.
Activities focusing on large-scale earthmoving and operations in quarries and mines require cycle efficiency to guarantee success. Unlike the previous two areas of work, these particular projects utilize a much smaller range of activities which are, however, repeated thousands of times. Elaborate planning and effective cycle control are therefore key factors influencing the productivity of the fleet used and the unit cost. Corporación M&S has successfully participated in projects of this kind in Panama, with the expansion of the Panama Canal where the company carried out works to the value of well over $20 million. In the area of agricultural projects, on the other hand, the enterprise specializes in constructing roads, drainage and irrigation canals for the agricultural industry. Its completed works include Arenal-Tempisque irrigation channels in Costa Rica and drainage canal for Lake Managua in Nicaragua.
Because Corporación M&S carries out its activities across a number of countries, it benefits from operating in markets in differing stages of business development. Such a strategy allows Corporación M&S to concentrate most of its operations in areas where the economy is at peak level at any given time. In fact, most of Central American countries are currently experiencing dynamic growth resulting from a range of economic and political conditions, as well as specific market and industrial trends. In Panama, the company has already benefited from participation in a number of projects aimed at widening the Panama Canal. In Costa Rica on the other hand there is a strong boom in the tourism industry as well as real estate, with many foreign buyers investing in holiday or retirement homes. Indeed the anticipation of increased tourism is visible across the whole of Central America.
Free trade agreements also pose business opportunities. “The 2007 free trade agreement between the U.S. and Central America means that on the one hand companies from here will gain greater access to the U.S. market, but at the same time Central America will benefit from serious investments made in the region,” explains Bernal. “As a result, we are already seeing an economic boom in the construction industry, in brand new as well as improvement works on airports, roads, ports, hospitals, and many other types of infrastructure. As a company with strong experience in each of the countries in Central America, we are ideally positioned to take full advantage of these excellent opportunities.”
And, because Central America is still considered a relatively under-developed region, with old infrastructure that needs to be either improved or replaced, Corporación M&S sees even more dynamic growth in the years to come.
PLANS FOR THE FUTURE
By 2010, Corporación M&S is expecting to carry out works of around $4 billion, thanks to activities such as construction of new roads, for example the San José–San Ramón highway in Costa Rica, and valued at $350 million. The company is focusing more on vertical building works relating to new facilities such as hospitals, as well as taking advantage of the boom in the real estate market. It is planning to become even more involved in the hydroelectric industry, with projects such as a $34 million hydroelectric plant in the Fantasma Valley in Nicaragua. The company is also expanding activities in construction of urban water sanitation facilities.
Corporación M&S is a member of Fomento de Construcciones y Contratas (FCC), one of Spain’s leading construction and service groups with strong operations in Spain, particularly in the urban sanitation market. Thus, through its partnership with FCC, Corporación M&S is also benefiting from international expertise and as a result is further building its potential for development across Central America and beyond.