Going Global
More than the money, what drives Pacific into the global market is the opportunity to build up its brand and learn global best practices, says Hoogewerf.
“I also think Yan Hao is playing a crucial role. At 28, he is possibly the youngest CEO among global 500 companies," the analyst says. "He is also a strong pair of hands.”
Enhancing technical capabilities is also crucial to China Pacific Construction's future growth in the Chinese market.
Central and provincial government agencies have so far given away contracts to local contractors, allowing few foreign companies to win sizable deals.
But these customers are now becoming more demanding, and now seek firms with heightened engineering capabilities. Experience in foreign markets will help Pacific Construction stay in the loop for big deals, sources who know the company say.
The company’s hands are pretty full at the moment, although it is facing some challenges. Reports suggest it has come up against a financing bottleneck in the Lanzhou city project, slated to accommodate 1 million people, and for which it has invested more than $3.5 billion.
Pacific also has an agreement with the government to build the new industrial and financial center in Kunming, a southern Chinese city with roads that link to Nepal, Bangladesh, Malaysia and Singapore. The company’s share in the Kunming project could be as high as $17 billion.
The $60-billion Kunming project is part of the government’s “gateway strategy” for Yunnan province to enhance the flow of commodities between China and Southeast Asia, South Asia and the Indian Ocean through Myanmar. It includes construction of roads, bridges, tunnels, water supply and drainage lines in an area twice the size of Los Angeles.
At a recent press conference in Nanjing to announce China Pacific Construction's Fortune 500 listing, Yan said he plans to build another company that also could make the ranking—another indication of the ambition of someone some Chinese media have described as a "madman."
This story was updated to correct the estimated revenue that China Pacific Construction could achieve in five years.
