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Hill International Growing Operations in Mexico

Beginning in 2004 with just a “handful” of professionals, Hill International has grown significantly with new targets being set as the Mexican economy shows signs of promise. Today, Mexico is being squeezed in a difficult global economic environment. “Last year (growth) was low, I think that this year it will be relatively low too, but I think next year will be much better,” the Forbes magazine qouted Mexican billionaire Carlos Slim as saying.  He expects Mexico’s highly touted set of structural reforms to help attract a new wave of investment. Slim, majority owner of Mexican telecom giant America Movil, went on to say: “I hope that next year we will set the pace for growth for the next four years.”

Hill International’s vice president and country manager for Mexico, Jesus Puy, has firmly set his eyes on generating more business and revenues for the company on the back of that projected growth. “In 2004, we were just a few people [in our Mexico operations] that would have fitted into an elevator,” he said, noting that figure has risen to about 70 employees.  Against an annual turnover then of nearly $300,000, Hill is currently generating $7 million each year, Puy said, hastening to add that no efforts are being spared to increase earnings further.

In 2004, Hill made its entry into Mexico by offering project monitoring services for the luxury hotel sector. But the turning point came in 2010 with the award of the BBVA Bancomer contract to provide construction management services, Puy said. Spain-based BBVA is a multinational group providing financial services in over 31 countriesto 50 million customers throughout the world.  Hill’s contract covered the Centro Operativo project, which will host the back office operations of BBVA Bancomer. The facility is a 38-story tower featuring 16 levels of parking (9 levels underground) and 22 floors of office space with a total built-up area of nearly 153,000 square meters (1.65 million square feet). The project is expected to receive LEED Silver certification. In recognition of a job well done, in early March Hill received a contract extension from BBVA Bancomer for the Centro Operativo project. The 18-month extension has an estimated value to Hill of about $3 million.

Hill is also providing project and construction management (PM/CM) services for an estimated $100 million real estate development at Santa Fe called Julian Adame. The planned development entails construction of six towers, primarily for residential purposes. The project also includes underground parking, common areas and related facilities. Each tower will have 20 storeys, resulting in a construction of 80,000 square meters and 35,000 square meters of underground parking space. The project will also include 375 apartments and a 6,000 square-meter space for amenities.

New targets

With a myriad of proven skills and global expertise managing projects, Hill International will not rest on its laurels in Latin America, but rather has set new targets for itself. “We are negotiating [the award of] a major contract in the hospitality sector and also at the same time carrying out technical due diligence for the largest drinking water project in Latin America,” Puy said, noting talks are also on to provide project management oversight (PMO) services for a major Mexican real estate investment institution.

With a length of  200 miles (320 kms), the Monterrey aqueduct project is a $ 1.1 billion PPP (Public-Private partnership) whose debt is being structured by the North American Development Bank and other public and private banks. Hill is acting as the lender’s technical adviser analyzing the project’s construction and operating risks. “Our eyes are also set on the expansion of the Port of Tuxpan and, within the Hill family, it is in Mexico that we are working with multilaterals,” he said, highlighting that along with infrastructure the company is also positioning itself to win contracts in planned investments in power and oil and gas, besides increasing its market share in the hospitality and real estate sectors.

Liberalizing the Mexican economy –which comes under the North American Free Trade Agreement (NAFTA)– is an ongoing process and that will open up opportunities for the likes of Hill International. “Areas that were closed to foreign investment are being opened up and the business practices of those will bring in Western PM/CM [project and construction management] firms,” Puy said. Signs of success are already in hand, he said, adding “we have more than doubled” project monitoring activity since last summer.

Mexican economy to grow

Investors should remain optimistic about the underlying strength of Mexico’s political and economic outlook, Forbes said. Quoting Ian Bremmer, a political analyst and head of the Eurasia Group, the publication said: “The orientation towards fixing the economy is there – [whereas] most emerging market economies aren’t oriented towards improving competitiveness, they are simply working to meet the needs of their constituents with populist policies.”  By contrast, in Mexico, the right-of-center PAN party and centrist PRI party of President Enrique Pena Nieto have demonstrated a commitment to working together to push economic reforms through. “The reforms we’ll see in 2015 are the ones that matter– telecoms and energy– that lead to more investment,” Bremmer said.

Undoubtedly, Hill’s Puy is closely watching the economy unfold and offer new opportunities. “In Mexico, we are small in terms of size [compared with Hill’s other operations globally], but this is a market that will provide opportunities to grow. In the Project Monitoring and PPP sectors, we know how to deal with financial institutions and how to structure deals and this can be put to use, along with the several other skills that Hill International already has as a global leader in PM/CM,” Puy said.

By Ashok Dutta