Caribbean Industrial Construction S.E. (CIC) enjoys an enviable standing in the industrial community, as exemplified by its number of notable clients in the pharmaceutical, biotechnology, industrial and commercial industries. Among these are demanding companies such as Abbott, Amgen, Bard, Baxter, Bristol Myers Squibb, GlaxoSmithKline, Guidant, Hewlett Packard, Eli Lilly, Johnson & Johnson, Pfizer, and Wyeth.
The company’s growth plans are heavily dependent on economy trends and private sector investments, but the management team expects the company to stand strong and grow at a steady pace in response to market demands. In 2004, the company’s revenue was more than $92 million thanks to a large investment in biotechnology industry projects by such companies as Amgen, Eli Lilly and Abbott. The pharmaceutical segment has also maintained a steady expansion rate in Puerto Rico, and CIC has actively participated in the process.
As part of CIC’s business development, promotion and marketing efforts, “our project performance, our daily work and client satisfaction are our best marketing tools,” says business development director Jose Torrens. CIC also participates and exhibits at major trade shows such as Interphex Puerto Rico, Induniv Forum for Innovation, Puerto Rico Manufacturers Association, ISPE Annual Meeting, and the Pharmaceutical Industry Association of Puerto Rico annual convention. It also markets its services through its Web site, which is constantly being updated and enhanced; a corporate brochure, and a video that tells what the company is and does. Ads in business and industry-specific niche magazines are part of the marketing and promotional tools used by CIC.
Laying the foundations
CIC started operations with only $2.5 million in contracts and 75 employees. The company’s modest beginnings were authored by Fred Gallo and Gustavo A. Hermida in 1983. The company has indeed grown in size and capabilities; it now manages more than $90 million in construction projects, and employs more than 1,400 people ranging from managers, engineers, field supervisors and craftsmen.
“Caribbean Industrial Construction began operations by participating in construction projects for the pharmaceutical industry,” says Managing Partner Gustavo A. Hermida. “We then saw the potential in a growing industry that was having a major role in Puerto Rico’s economic development back then. Our very first offices were located in the San Martin area in San Juan, and encompassed a modest 1,000-square-foot facility. Today, more than four acres are home to 8,500 square feet of corporate offices, another 14,000 square feet are devoted to structural steel fabrication, and around 5,000 square feet house the equipment division, which includes a maintenance workshop and construction equipment. An additional 1,550 square feet contains a cabinet making shop.”
For a little over two decades, CIC has kept its position as a full construction service company that places high priority in customer service. Among the many companies that have been served by Caribbean Industrial Construction are Baxter, Warner Lambert (now Pfizer), and Eli Lilly. These were the company’s first big clients and a milestone in its multi-million dollar-project history.
Milestones and ventures
“In 1999 we started a joint venture with Barclay White, a construction management firm from New Jersey, to carry out specific projects as construction managers for four years. We worked together in projects for clients like Wyeth, Johnson & Johnson, and Hewlett Packard,” says Hermida. “But in order to keep our capabilities up to standards, investment in training and technology geared towards overall project improvement was not a small one. Safety issues have not been set aside either. Our company has been recognized by the Associated General Contractors of America for the excellent safety record and occupational health program for the past five consecutive years.”
Intel was the fastest manufacturing building ever constructed in Puerto Rico by CIC with a perfect safety record, followed by the CORDIS project in San German, a $22 million design-build project completed in only seven months. Big biotech projects involving Amgen, Eli Lilly and Abbott were also crucial in giving the company the prestige it now has in the pharmaceutical and biotechnology industry.
CIC is also a pioneer in voluntary participation with the Occupational Safety and Health Administration (OSHA)’s Partnership Program. CIC is the only construction company on the island that is a member of the prestigious Pharmaceutical Industry Association of Puerto Rico.
It is also an active member of the Industry, University and Government Research Consortium (INDUNIV), (of which Hermida is a board member) a non-profit organization that offers many initiatives to enhance Puerto Rico’s status as preferred location for new business opportunities in the pharmaceutical, biotechnology, medical device, health care and allied industries.
“Caribbean Industrial Construction is a very active member of the International Society for Pharmaceutical Engineering (ISPE), and we participate in many of their activities through the year including the annual meeting in the United States,” Hermida continues. “Our business development director, Jose Torrens, is the secretary of the board of ISPE Puerto Rico Chapter.”
Another important stepping stone that has brought the company to where it is today is the excellent relationship it has with A&E firms, subcontractors and suppliers. Two years ago the company began to celebrate the “Caribbean Industrial Construction Annual Client-Contractor Golf Tournament.” This annual event has redefined relations with owners, subcontractors, and suppliers, and has proven to be one of, if not the premier, networking event for all of those involved in the local construction industry.
The global competition for pharmaceutical and biotechnology manufacturing projects encompasses such factors as quality and construction cost during the evaluation stage of the country in which a new facility is to be built. Oftentimes, prices escalate and labor costs increase unexpectedly, just when the pressure to reduce costs in a much regulated industry is critical. In times like this, slowing down and analyzing what to do to improve and be more competitive so that the best value is brought to the clients, is a must, says Hermida.
One of CIC’s strengths is the ability as a general contractor to perform in house most of the civil, structural and architectural (C/S/A) work. With this, CIC guarantees to provide the most highly C/S/A skilled workforce in Puerto Rico to ensure a better control of safety, schedule, quality and costs issues. This approach also allows the company to respond quickly to client needs and changes in market conditions. These work services include site work, foundations-slabs-all concrete work, structural steel fabrication and installation, block work and plaster, drywall and finishes, door, frames and hardware, floors, ceilings, wall covering and painting.
He continues: “We have completed over 250 projects for most of the pharmaceutical, biotechnology and medical devices companies in Puerto Rico. Over the last five years, we have completed projects for Pfizer, manufacturing building expansions in Arecibo and Barceloneta.”
Other projects included:
• Merck Sharp & Dhome administration and laboratory building in Arecibo;
• GlaxoSmithKline, manufacturing building expansions;
• Bristol Myers Squibb, construction of Plavix building in Humacao;
• Ortho McNeil Evra and OC expansions;
• Wyeth Parenterals, Vitamin and Effexor expansion projects;
• The Amgen Opus Program, Abbott Humira, and Lilly biotechnology projects;
• Guidant manufacturing facility expansion; CORDIS (J&J) and Bard Shannon Ltd. new manufacturing facilities, and Juncos Medtronics manufacturing expansion, considered a “major feat.”
Although the growth in the construction industry depends heavily on the economy and varies from year to year, the company has been able to grow continuously, in 2004 logging its best year to date, with a growth rate of 80 percent over the last year. The company almost duplicated its workload without sacrificing any quality in the services it provides: construction value, high quality, excellent safety record, and on-time delivery. CIC continually strives to improve the level of service to its customers by utilizing the latest technology, understanding the needs of its clients, developing and providing the services to meet those needs, hiring and retaining the best people in the business and committing to total customer satisfaction.
Hermida continues, “We feel confident that our people, craftsmen, supervisors, project managers, engineers, home office support personnel and their dedicated loyalty to CIC set us apart from our competition. We use the initiative, creativity and knowledge of our entire firm to give our clients the peace of mind that their project will be completed the way it was planned. Our goal has been to become a full-service company where clients could find everything they need to carry out their construction projects needs to full completion. CIC integrates services within five divisions such as structural steel, concrete, architectural interiors, painting and finishes, and equipment. We are the only contractor in Puerto Rico that self-performs these tasks and can manage projects as a general contractor with strong capabilities in project control, procurement, quality, and safety.”
“We are constantly identifying future needs and trends for which we can provide solutions and better value to our clients. This is why we have integrated the latest technology in software and communications systems into our daily construction and project management activities, such as Web-based collaboration systems to communicate better with clients and design firms. This working style is unique and has proved extremely successful for CIC and its clients. Ours is a company that is portrayed as honest and straightforward, with a sincere desire to carry on a project from concept to full delivery. Our business culture is client-oriented, quality-driven, safety conscious, and cost-effective,” says Hermida.
Rising to the challenges
“Our greatest challenge is dishonest competition. We are constantly faced with a situation where Caribbean Industrial Construction is unfairly compared to other general contractors that do not offer the same quality in services, but lure customers with their low costs,” notes Hermida. “Usually, the outcome of it all is an unsatisfied customer and a poor job in terms of quality, timeliness and cost-effectiveness. Some of these unethical contractors end up giving the industry a bad name. As a response, CIC has maintained a policy of firm work ethics by constantly improving quality and customer service. We believe the services we offer are second to none.”
Hermida adds, “In our company, we have allocated enough resources to acquire only the best tools and equipment available to improve performance of our employees and work frame. We strive not only to stay in business, but also to help Puerto Rico as a whole to stay competitive. We want clients to think of Puerto Rico as a center of excellence in the construction of high tech facilities. We will bend over backwards to be the construction firm of your choice.”