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Mexico 2015 | CONSTRUCTION & REAL ESTATE | INTERVIEW

TBY talks to Sergio Hidalgo, Director General of OHL México, on accomplishments in the local construction industry, the Mayakoba project, and growth in the construction sector.

Sergio Hidalgo
BIOGRAPHY
Sergio Hidalgo has been the Director General of OHL México since March 2013. He holds a Bachelor’s degree in Law from Universidad Anáhuac and a Master’s Degree in International Banking and Finance from Columbia University. Previously, he served as Director General of the State’s Workers Security and Social Services Institute (ISSSTE), Undersecretary of Administration at the Ministry of Finance, and Director General of the Asset Management and Disposal Agency (SAE).

OHL began operating in Mexico in 2002. What have you accomplished in the local construction industry since then?

OHL is a story of success, compromise, and investment in Mexico. We have had a clear vision of developing infrastructure in the country and participating in and contributing to national infrastructure, which was clearly required. We have worked in Mexico for three governments from three political parties, and have always been able to deliver our projects on time. That is something of a novelty when compared with other infrastructure projects around the country, and we are focused on making things happen through courage and sometimes, through economic compromise.

What would you say most characterizes your operations in Mexico?

We pride ourselves in our capacity to deliver projects on time. In fact, the Ministry of Communications at one point found itself overseeing a difficult project that featured a tunnel, whereupon we were invited to rescue and realize the scheme. Times of crisis inevitably give rise to opportunities. We are also characterized by our capacity to provide the right suggestions. We do not always wait for a government project to bid for. Rather, we approach the government ourselves with, say, a mobility solution and propose they test it out. We do this on the back of the latest PPP law instituted. This approach does not always work out quite as planned, and some adjustments are required. However, over the past 10 years or so, the company has been able to engage in projects totaling $5 billion. No other Mexican company has been able to scale the index as quickly as we have, and OHL is also 44% floated in the market. We have become one of the most scoped out companies on the stock market. Within a short period of time we have been able to build one of the largest and most significant infrastructure companies in Mexico. The OHL Group in Spain has other areas of expertise that it has successfully consolidated. OHL Mexico has been broken up into the following areas: OHL Concessions, OHL Construction, and OHL Industrial. OHL Group has little by little been consolidating in Mexico, whereby we have become a weightier market player.

To what degree does Mexico still need infrastructure to make the most out of its economy?

Clearly there are plenty of opportunities to further develop local infrastructure. I also believe, because of budgetary constraints due to the price of oil, that there are opportunities for private companies and concessioners to develop those projects. Infrastructure no doubt brings development, and if Mexico wants to be competitive, it needs to develop its own further.

How is OHL participating in the Mayakoba project in Cancun?

Mayakoba continues to grow, and two additional hotels are being added in addition to a development of mid-level housing across the street. There are also ongoing discussions on building a high-end development with a golf course at another end of the project. We are planning to expand in all of the areas where we have expertise. OHL is here to stay, and we know the market, enjoy our presence in it, and want to take advantage of the opportunities this project presents.

The CMIC forecasts that the construction industry could grow by 3.5% this year. What are your views on this?

I consider that forecast challenging due to the government's budgetary constraints. Concessioners will continue to invest, which will help. The budget was drafted last year, but will have to be cut even further, whereby we expect growth of somewhere closer to 3%.