Eurovia, the leading road construction company in Chile
9 March 2017 - Other - Chile
Eurovia, one of the world’s top-tier players in transport infrastructure construction and urban amenities, has grown into the number-one road construction company in Chile in less than two decades. Its development strategy now involves exporting Eurovia’s model from Chile to other promising South American countries such as Peru and Colombia.
VINCI has made several acquisitions through its Contracting business lines over the past few years, furthering the Group’s strategic drive to expand internationally. VINCI generates 41% of its revenue outside France today, and could grow that figure beyond 50% by 2020.
What Eurovia has achieved in Chile, in less than two decades, illustrates this strategy aimed at speeding up the Group’s business on international markets in general and on emerging markets in particular.
Chile is a narrow 180 km wide, 4,300 km long strip stretching from the border with Peru in the north to Cape Horn in the south, and relies heavily on roads for trade. VINCI has been very active on that road network, which connects the country’s 17 million people, since 1999. Eurovia has grown into Chile’s leading road construction company in less than two decades via its local entity Bitumix. Its 1,500 employees there generated €170 million in revenue in 2016, operating 16 coating plants, aggregate production sites and bitumen production plants. Eurovia holds a 25% share in the Chilean market and handles 50% of its bitumen imports and trade.
Eurovia grew in Chile by rolling out its decentralised model, i.e. setting up regional bases with strong local roots. It took this strategy to the next level in July 2016 when Bitumix took over Bitumix CVV (a 50-owned subsidiary before), which operates in and around Concepción, Chile’s second-largest city.
Chile’s road construction market only started taking shape over the past 30 years, and Bitumix, backed by Eurovia, contributed to shaping the technical requirements underpinning it. For example, it worked side by side with the country’s authorities drafting the standards for the products, construction methods and pavement design. Several of Eurovia’s techniques have become the market benchmarks, giving its local subsidiary an advantage as it vies for projects under the country’s $28 billion road investment program, which President Michelle Bachelet kicked off in 2014 and that will be rolling out until 2021.
Eurovia has also been active in Chile’s rail sector for several decades now, via its subsidiary ETF, which is now leading the joint-venture that is installing the track and catenaries on two new metro lines in Santiago de Chile and will be operating them for 20 years. ETF completed a first 5.5 km section of Line 6 and started working on the 22 km section of Line 3 in 2016.