...the top of the list. The firm topped the first listing in 1996, with $1.5 billion in revenue. It more than doubled its annual environmental revenue over the decade, even as it slipped a point in the parent companys overall market portfolio, from 20 to 19%.
"Were active at all the big DOE sitesHanford, Oak Ridge, Savannah River," says Weaver. "Were starting to see an end point to these big jobs, maybe five or 10 years down the road. Right now, were ramped up and the money is flowing."
Nuclear Option
As DOE sites proceed toward closure, the U.S. firms that have gained experience working across the U.S. complexes will look for similar work overseas. "The U.K. market will grow as the DOE markets wind down," says Steven Piccolo, senior vice president of the integrated projects group for Washington Group International (No. 5).
Even as Cold War leftovers are cleaned up, the domestic hazardous-waste business should get a lift from the current round of military base closures, says Bill Webb, executive vice president of North American consulting and engineering operations at Earth Tech Inc. (No. 6).
The fifth Base Realignment and Closure round will spin off "a tremendous amount of money" for the next 10 years, says Bob Bax, senior vice president of the facilities, environment and resource management division of Parsons (No. 12). The firm already derives 39% of its work from hazardous waste work, much of it at federal sites.
Risky Business
Changes in government contracting have led to more risk, slimmer margins and bigger dollar amounts, so joint ventures are becoming more common. Big multi-year, guaranteed-maximum-price contracts require more upfront engineering and design work to nail down the scope, says Diana Severs Ferguson, president of Shaw Environmental & Infrastructure, the federal contracting arm of Shaw Group (No. 10). The process runs up bidding costs so firms will chase fewer of these kinds of jobs, she says.
Hazardous waste remained the largest segment of the environmental market, accounting again for a 27.5% share, the same as last year. Veolia claimed the top position there, thanks to its Onyx North America subsidiary, which boasts a nationwide hazardous-waste service base that includes industrial, municipal, government and residential customers.
MACTEC Inc. (No. 30 overall), moved up two notches in the hazardous waste sector to No. 18. It leveraged remediation work at a former Atlanta steel mill into site planning and utilities work at Atlantic Station, a $2-billion mixed-use development adjacent to the
downtown core. MACTEC also is involved in another big metropolitan area development in the New Jersey Meadowlands, according to Leonard Ledbetter, executive vice president of engineering and development.
Nuclear waste work account- ed for over $6 billion in Top 200 revenue in 2004. Bechtel led that sector and Fluor Corp. (No. 7 overall) was second. Fluor expects to be competing for this kind of work in the U.K. and elsewhere against Bechtel, Washington Group and other big site specialists, says Gary Coxon, head of Fluors nuclear and enviromental operations. The newly formed U.K. Nuclear Decommissioning Authority "is looking to the U.S. to assist with project management" on some 20 nuclear project sites, he says.
In the water and wastewater treatment sectors, annual spending on water dropped by more than $700 million in 2004, and wastewater revenue climbed by more than $400 million. CH2M Hill Cos. (No. 2 overall) leads in both categories. While the federal government has not been willing to help repair aging infrastructure, "the watershed market is alive and strong," says Tom Searle, president of CH2M Hills water group. The $8-billion Everglades restoration is rolling along, despite some uncertainties among stakeholders over scheduling and project delivery. Louisiana 2050, now in its early stages, will by all accounts have a much larger budget than the Florida effort.
One reason that wastewater treatment has held up even as water lags is because the "stormwater [treatment] business is burgeoning," says Steve Guttenplan, president of Metcalf & Eddy, the Wakefield, Mass., water/wastewater treatment arm of AECOM (No. 15).
Many municipalities face consent decrees to reduce combined sewer overflows or separate sanitary from storm sewers. Raising the rate base is always a challenge and help from Washington is unlikely, so the timing is right for innovative and technology-based solutions, Guttenplan says. Metcalf & Eddy works on New York Citys big nutrient removal program and now is pursuing similar efforts in Baltimore and Philadelphia.
In the Till. Mining remediation boosts profits. (Photo courtesy of The ERM Group) |
Even small to mid-sized systems are beginning to realize the benefits that information technology can bring to the table. "Efficiency is the newest driver of the water/wastewater market," says Bob Uhler, president and CEO of MWH, (No. 9).
Many firms are looking at private sector clients to counter the absence of major government-based environmental initiatives. The ERM Group (No. 18) recorded its 28th consecutive year of growth in 2004, says President John Deal. The firm derives 96% of its revenue from private sources, he says. The oil and gas, chemical and manufacturing segments have been especially strong. "About 70-75% of our work is repeat clients," Deal says.
ERMs clients are looking for help with brownfield development, program management, permitting and lab work. With a client base that includes Royal Dutch Shell, ExxonMobil and other multinationals, the firm boasts 125 offices in 37 countries. Deal expects its global work to outstrip U.S. growth in the near term.
Golder Associates Corp. (No. 21) also relies on an international client base. The consultant includes Ford, Electrolux, Honeywell, Whirlpool, GE, Rio Tinto, Barrack and Newmont Mining in its client portfolio, says President Steve Johnson. The firms backlog is up 30% and natural resource prices remain strong, so growth should continue this year, he says.
But there are challenges. Johnson is not optimistic about the World Banks ability to deal with graft in places like Brazil. Golder also had to close an office in the southern Philippines because of stepped up Abu Sayaf guerrilla activity.
Act Locally. Firms keen to work in China soon learn that one key is hiring home-grown talent. (Photo courtesy of The ERM Group) |
China Connection
The Chinese market continues to prove tough to crack. The Top 200s environmental revenue from Asia is less than a quarter of what Europe provides. But Golder and other engineering firms realize that the size of the Chinese market and upside potential are too important to ignore. Black & Veatch (No 13) is in for the long haul, says James Hipps, managing director of BVI Water-Asia.
Black & Veatch is one of the first U.S. firms in China to gain wholly owned foreign enterprise status in environmental engineering. That status allows the firm to operate in China and take money out of the country. It hopes the WOFE license will lead to 2008 Summer Olympic Games work and also earn the firm a program management consultant role as China continues to develop its water and power resources.