VolkerWessels UK chief Alan Robertson on his growth ambitions

Having acquired a series of civils contractors over the past five years, Dutch construction giant VolkerWessels is now bringing them into one £700m UK group. James Stagg asks new chief executive Alan Robertson what this means for the firm and its fortunes.

What is the background to VolkerWessels UK?

Right now we are undergoing a rebranding and a restructuring, bringing all the businesses under one brand.

Going forward, Fitzpatrick will be known as VolkerFitzpatrick, with a turnover of £350m. There will also be VolkerRail, formerly Grant Rail, which turns over £150m.

We are creating a new business, Volker Highways, which will be involved in highways maintenance work. It is made up of four smaller operations that were doing fairly similar things with a lot of duplication. Turnover will be somewhere in the region of £125m.

Then there is Volker Stevin, which will be largely unchanged, our special project business, now known as VolkerLaser, and Visser & Smit Hanab, which will become VolkerInfra.

Together they make up a £700m turnover business.

What was the main driver behind the formation of the group?

The main driver was not cutting costs, but about having a common offering. Avoiding any confusion there may be about which businesses are operating in which areas.

In the past there has been little collaboration between the businesses. Going forward, particularly as we face some tough economic times, it will be necessary to have better collaboration.

Does this now mean you have national reach?

Big national clients like network rail want to know they can acquire the vast majority of their supply chain services from one party. So from that perspective it makes sense in terms of the client offering.

The collaboration in terms of back office services also makes obvious sense. We can work as one business on common IT platforms, HR services and procurement services. Getting better buying power will also be possible.

There aren't many people if any that challenge that logic. It's very common and necessary in the UK environment which has a tight geographical centre. Clients want national coverage with a national brand.

Are you looking to break into national frameworks?

It's not the be all and end all as we've done well with the businesses in their own right, but as we face more challenging times we will have to up our game and be better at what we do.

Is it a concern to be edging out your established brands?

I think we get the best of both worlds. We have the Volker brand which is the overarching brand and we will retain all the sub-brands.

There is one exception over time the VolkerHighways brand will come to the fore rather than the historic sub-brands. There has to be better critical mass. If we're bidding for bigger contracts, we don't want to talk about business turning over £40m or £10m but one that's turning over £120m in highways services.

Is this an opportune moment to restructure and reposition the business?

The restructuring is something that was in the necessary or very desirable category. I'll never know how much different the business would have been if we hadn't, but all I do know is that there is emphatic logic to have a common brand.

When Carillion acquired Mowlem and Alfred McAlpine, both brands were dropped in fairly short order. We're not looking at dropping our traditional brands like Fitzpatrick. It has been going since the 1920s and has a positive culture and dedicated workforce. For me brand, culture and people are all one and the same.

This is how the construction infrastructure sector wants to see its supply chain operating.

What do you now consider the businesses main sectors?

Rail and highways are two big sectors we're looking at. The other two are education and waste. We have picked up some fantastic work on further education colleges like Anglia Ruskin at Cambridge, and having the national presence will do no harm for BSF schemes.

In waste, the work ranges from simple civil engineering work, to process equipment and incineration. Moving forward, some of the specialist sheds and rail maintenance depots will be work we are more than capable of undertaking.

Are you projecting growth considering the current climate?

I still believe we can achieve growth. Rail is the obvious area of growth given the skill sets we have with Fitzpatrick delivering pure railways civil engineering and our railway specialist business VolkerRail, formerly Grant Rail. It's an area where the bigger national clients look for bigger balance sheets and a more comprehensive offering.

There is no doubt our business is being impacted by the slowdown, but we should have a better-sized orderbook at the end of 2009 than we did in 2008.

Do you have any turnover targets?

The obvious target is the £1bn level, but I'm not going to put a fixed timescale on that. At £700m we are a reasonable sized player and about 20th in the UK. In the fullness of time I would like to be in the top dozen.

Organic development will get us a long way, but we will also look at acquisitions to improve our geographic coverage or skills sets. No doubt some opportunities will be thrown up in the next year or two.

What's your ideal margin?

When you look at the bigger national players they all have margins of 3%-plus and that's where I want to be.

We need to avoid the big bleeding jobs. Every construction group has had that one job you lose your shirt on. If you can avoid that, you can maintain margins.

We want to create a strong, sustainable business that is a real market force in UK construction.

I will be chief executive of VolkerWessels UK and managing director of Fitzpatrick and don't intend to build up central overhead structures of £3m-10m as other businesses of this size have. I don't see the logic in that.

On a more personal note, how did you start out in construction and what are your career highlights?

I left school in South Africa with two options: either moving into civil engineering, or train as a chartered accountant. I decided to train as a chartered accountant but it was probably no coincidence that in the 1990s I gravitated towards the construction sector and eventually became chief executive of the Eve Group.

One of the highlights was the fact that I did a good turnaround job after being brought in to run Alfred McAlpine's infrastructure services business in 2005. That was overtaken by Carillion's takeover, but I'm still proud of what I achieved.

3 things you didn't know about Alan Robertson

1. He adores Ireland and thinks the country's cuisine is the best in the world
2. A keen snowboarder, he has taken on the Vallee Blanche - the longest and most challenging off-piste run in Europe
3. Despite growing up in South Africa, he will be cheering on the British Lions in his homeland this summer

CV

• 2009-present VolkerWessels, chief executive
• 2008-present Fitzpatrick, managing director
• 2005-2008 A McAlpine, director infrastructure services
• 2002-2005 Peterhouse Group, chief executive
• 1998-2002 Eve Group, chief executive
• 1995-1998 Eve Claydon, managing director