CEO (ICA)

President Enrique Peña Nieto has made sweeping changing for the country through the creation of new laws, amendments, and reforms. Which of his reforms do you believe will prove to be the most beneficial for the country as a whole?

The reform that is most definitely going to change the course of the country will be the energy reform. Like you said, there are many reforms that will help the country, but at the end of the day, if there is no change in terms of new investment coming into the country, the improvements will only be marginal. I guess we can look back 20 years to the creation of NAFTA. That really changed things for Mexico, considering all the foreign investment that came in. The investment not only creates jobs and a better economy, but it also creates competitiveness because there is an urgency to invest in a lot more things.

You need better infrastructure. Even now, the energy reform has a lot to do with NAFTA itself. Now there is all this industry that makes sense to have because of the free trade, but energy is still quite expensive. The US is very sophisticated when it comes to energy, and they have set a great example in terms of how to move forward—especially since Mexico and its energy potential is very similar to that found in Texas. In Mexico, we now have the industrial capacity, and we have the workforce to really take advantage of the new investments. The main goal of the reform is to create lower energy prices, and we are already seeing lower prices.

Mexican Energy Reform coincides nicely with the current US energy revolution, which, in the medium term, should allow for the US to become completely independent in terms of its energy production. Is it realistic to consider the region encompassing the US and Mexico to be the next great potential energy hub in the coming decades?

I think so. This is quite a possibility. Mexico will definitely help, but it’s amazing what the US has already done in terms of how much they have already increased their production.

ICA was founded by your grandfather, Mr. Bernardo Quintana Arrioja, and he converted the company into one of the leaders in the sector. You were named CEO in July of 2012. How was the company when you first stepped into power, and what is the current state of the company?

The company was founded as a construction company. Times were different back then. It was mostly the government sponsoring and paying for projects based on their budget. More and more, this company has transformed into a solutions provider, which includes diving deeper into the engineering part of these sorts of projects. Structuring the financing and bringing in partners are also two important aspects of what we do because of the size of these projects. This is really what is behind our transformation. We are not only builders, we are project managers with engineering and finance capabilites. We are now less dependent on the government for funds, which has made us evolve greatly as a company. We are focused not just on the creation of these infrastructure projects, but also on the services they provide.

In light of the newly competitive market, ICA has been reorganized with a greater focus put on productivity and growth. What specifically has changed to the business model in order to highlight these two areas?

We have established a new center for excellence, which is officially entitled the Center for Risk Management and Value Engineering. This makes us less vertical. The goal of this center is to bring value engineering to each project. When a project is first presented, it must pass through this center, which then analyzes it throughout its early stages. This center is more geared towards value creation, We also have a project called “Unifica, which is geared to streamlining operations” These are the actions we are implementing to make sure our project managers have better tools to manage their projects. I think that’s key.

You´re a company with a solid presence in Mexico, but who is also interested in expanding to areas such as the US. You recently bought a company in the US. Do you have any other examples of projects in the US or plans for the future with working with American companies?

We decided we needed to have a foot in the US market. There was an opportunity to acquire a family company. It has a great reputation, and it is the platform we needed to understand more about the US market and be ready to manage the types of infrastructure projects that will come from the US.

Do you think ICA can compete with some of these US companies that are more used to operating in a, perhaps, more sophisticated market?

We could have gone into the US market organically, but we decided to buy an established company with US management. They have the necessary local knowledge. We will grow it through the experience that we have because of our size and our years of experience. We can also help them diversify into construction activities they weren’t involved in before like water treatment plants or aqueducts. They can now do things they haven’t done before. I think they have a lot of potential for improvement.

Construction companies are all about the people. I know a lot of companies say that, but we actually mean it.

ICA is invested in a number of infrastructure projects: roads, hydropower plants, ports, airports, and refineries, just to name a few. What would you say is ICA’s specialty?

Our vision is to solve the most complex infrastructure problems. We have constructed one of the tallest bridges in the world. We have the capacity to do projects that really solve special issues. We also have one of the largest rock-filled hydropower plants in the world in Yesca. Currently the focus of the country is on converting crude oil to gasoline and diesel. We aren’t able to tackle these problems just because that is what we do. We can tackle them because our goal as a company is to tackle these types of problems at a world- class level. We partnered with Fluor, a company from the US, who has built plants like these for years. Twenty years ago we partnered with them, and it has been a great venture. Now that PEMEX is investing heavily in these types of projects, it is has been quite beneficial for us.

You were recently awarded the Deep Water Tech Center Project with a value of 89 million dollars. What did you do to set yourselves apart to win this?

It is really a think tank. It is essentially the engineering capacity of PEMEX. All these engineers are to be placed in Veracruz, where the port is. It is basically a campus. So, that’s really a civil work. It has to be done quickly. It was a public, international bid.

It is interesting to see which companies win these bids. There are still a lot of projects to be awarded, are there any projects you hope to get involved in? What do you do to set yourself apart?

We are very focused on safety, for example, which is important for companies like PEMEX. A good-sized company with a good reputation is always helpful; however, high safety standards really set us apart. Also, we are quite accomplished in finishing our projects on time. We are often used in emergency situations. A gas plant that has an accident would be a perfect situation to use our services. Recently, Villahermosa was flooded, and a natural dam was created as a result of this. We were there to remove the dam immediately with over 200 pieces of equipment. We move quite fast.

Do you have a shining example of an innovative project that can be attributed to ICA? Something that ICA is particularly proud of?

We are doing a lot of 3D modeling right now. We try to make sure that most of our projects go through this process, which really allows us to anticipate issues and problems that could arise. We do it for the majority of our projects, whether they be buildings, dams, or refineries.

ICA can be seen as a family business. How has seeing the company grow and being around it your whole life affected the way you run the company now?

ICA is an institution, and we obviously have very strict corporate governance. Most of our board members are independent. This is a very traditional company, and it has been here for a long time. When I came in as CEO of the company, I was thinking of what modern things I could bring to the company. For the first time in ICA’s history we have to deal with multiple generations. We have to work together. The way things were run before were orderly, but now things are more transparent. Being a problem-solver, no matter where you are in the organization is important. The people who act in this manner are the ones who are going to shine. Before, perhaps only the people on top had the opportunity to shine, but now, no matter where you are in the organization, you have this opportunity.

How would you define your style of management in ICA?

I lead by example. I am very into the business. I lead by being very involved in the company. I visit and spend a lot of time on the projects. I am amongst the people, and I really believe in change management. It is not just doing the changes without having to explain yourself. I believe in change management, and I have my change agents. We go together and decide on how to proceed into the future. Together, we bring in initiatives that help us reach our goals. Once we decide what’s good, we go through a change management process.

We are not changing just because I think this is a modern way of doing things. We are changing because I believe it is better for everyone involved. This really comes from the projects themselves. When you are building a road or a dam, you have to take social aspects into consideration. You really have to bring the

people in and help them understand why a certain project is a good thing for their community, and what’s in it for them. Essentially, my management style is working on explaining the advantages to be found in each project.

Where do you see ICA in 6 months to a year?

I think we are growing significantly. Our business and asset portfolio is doing a lot better. We are doing liability management because we don’t like the risk profile of the company, or at least how it looks from the outside. We are working from the top and also working on managing the liability. Sometimes the topline only grows by gathering more debt. In six months to a year, I expect the company to pick up more mature projects that allow for more stable cash flows and allow for our company to look better financially from the outside. I also believe we will be a more client driven company. The tools we are putting in place should be working by then, in a year. We will have more empowered project managers, more mature projects, and a more client-driven horizontal organization.