China’d Largest Construction Company Enters Portugal

16 March 2018

In January, CSCEC, one of the world’s largest construction companies, set up a subsidiary in Portugal. Among its areas of activity in Portugal will be civil construction and public works including roads and railways, airports and road terminals.

The largest construction conglomerate in China, the China State Construction Engineering Corporation (CSCEC), opened a branch in Portugal earlier this year. The company’s formal entrance into the Portuguese market was initially reported by the website macaubusinesshub.com and later confirmed by EXAME. CSCEC will use its existing company structure in Macau, China Construction Engineering (Macau).

The Chinese state-owned company, one of the largest in the world, will be headquartered in Lisbon under the name CSCEC – China Construction Portugal, SA. The management of the Portuguese subsidiary, which has a share capital of 3.5 million euros, will be led by Haipeng Zhang, chief executive of China State Construction International Holdings, the Hong Kong-based construction company.

The company’s arrival in Portugal is occurring at a time when the real estate sector is in the midst of a major boom. A number of significant public infrastructure investments are also expected in Portugal, such as the construction of the airport of Montijo, the modernisation and construction plan Railway 2020 (of which the Évora-Elvas railway is a part), the expansion of the Lisbon metro and the new container terminal in Barreiro.

Among the company’s areas of activity in Portugal will be civil construction and public works including roads and railways, airports, road terminals, metal structures and geological research, as well as tourism, hotels and urban rehabilitation.

Macaubusinesshub.com said that the company’s managers are expected to arrive in Portugal at the end of the month to negotiate facilities and prepare for their entry into the market and that an executive committee would be appointed and would include Portuguese officials. The same website stated that the company has “significant ambitions” for Portugal and wants to “compete for the construction of significant public works such as railroads and roads, the airport sector and road terminals.

CSCEC joins an already wide range of Chinese companies present in the country who have often come after the crisis years. China Three Gorges is an investor in EDP, Fosun in BCP, Fidelidade and Luz Saúde, State Grid in REN and TNA in HNA. CEFC China Energy has expressed interest in Montepio’s insurance business and a possible acquisition of Partex, the Calouste Gulbenkian foundation’s oil business. Chinese citizens are still the overwhelming beneficiaries of Portugal’s golden visa program.

CSCEC was founded in 1982, merging with three other companies in 2007 and debuting on the stock market two years later. The firm calls itself the “largest housing developer in the world” and is present in more than 20 countries, including Mozambique and Russia. In China, it has construction works in three-quarters of the airports, half of the nuclear power stations and 90% of the skyscrapers with a height of more than 300 meters.

In 2016, CSCEC’s new contracts exceeded 2 billion yuan (more than 300 billion euros at current exchange rates), and the company is in the top five most profitable state-owned companies in China. It has more than 250,000 employees and, according to Statista, is the largest construction company in the world in terms of revenues, reaching 124.66 billion dollars in 2016.

Original Story: Exame

Photo: DR

Translation: Richard Turner