Solví plans to double revenues, invest in new sectors

Brazilian engineering firm Solví announced its intention to double revenues to 2bn reais (US$1.2bn) by 2012, local financial newspaper Valor Econômico reported.

The company plans to invest 1bn reais to increase its presence in water, sewerage and solid waste services, as well as debuting in the energy and construction sectors.

The group, which currently has most of its contracts with the public sector, is also looking to extend operations to the private sector, the report said.

By diversifying its operations, the company plans to take advantage of the momentum in the infrastructure sector boosted by the launch of the federal government's growth acceleration plan PAC.

Solví currently owns Águas do Amazonas, which is the concessionaire of water and sewerage services in Amazonas state capital Manaus, providing 1.6mn people with water and 190,000 with sewerage services.

By 2012, the group aims to win four more similar contracts, increasing sector revenues from a 20% share to a 32% share.

Solví has already started operating in the construction sector, but in Peru, with an investment of US$50mn to build a highway in Lima.

The contract was signed in June and works should be finished by the end of 2009. The aim, however, is to have a construction unit that supports the group's other activities. The construction segment should make up a 6% share of revenue by 2012.

Solví currently has solid waste concessions in 17 Brazilian municipalities and three in Peru, in partnership with a local company. It also manages five landfills in Brazil.

The Solví holding was created from the restructuring of Vega Engenharia Ambiental and Águas do Amazonas, after the departure of French multinational Suez in 2006.

The proposed changes will cause Vega billing to fall from the current 58% to something around 40-45% by 2012. However Vega investments are expected to grow, with plans to build 20 more landfills and continue searching for new concessions.

Publication: Business News Americas - English News
Provider: Business News Americas
Date: August 20, 2008