Construction companies: acquiring new orders is currently risky ?

Construction and assembly production

Ten post dostępny jest także w języku: polski

The order books of the largest construction companies in Poland are loaded to the brim. Nevertheless, the freezing EU funds and rising prices remain a major problem, while the competition will be further exacerbated by the investment gap in Poland and the boom abroad.

The value of order books of Budimex, Strabag and PORR – the largest construction companies in the country, reaches almost PLN 30bn. The news proceedings, however, may be hampered, by the low profitability, stemming, among other things, from a market investment disparity in particular segments. Unfreezing EU funding would be of great aid, particularly in the railroad sector, but there are concerns that the existing scarcity of tenders in this sector will intensify the country’s already strong price competitiveness.

The situation is quite challenging, and there are few tenders available. The ones that have been announced have received a lot of attention. Tenders are insufficient, particularly in the public procurement sector. As a result, we’re keeping our distance because there’s no sign that material prices will fall next year“, according to Piotr Kledzik, CEO of PORR, cited by bp.pl.

In turn, Wojciech Trojanowski, Member of the Management Board of Strabag, commented that producers of materials used in railroad line construction, for example, are in a much more difficult position than contractors, as they are primarily affected by a lack of tenders. He also believes that the increased investment in other European countries will make it more difficult for Polish construction enterprises to obtain supplies on the domestic market.

The building sector as a whole, as well as public procurers and local governments, are all waiting for cash from the National Reconstruction Plan. This source has already provided funds to a number of countries. They are experiencing an investment boom, which will have an impact on the Polish market, particularly in terms of material availability. Poland shares a border with Germany, Europe’s largest construction market – there are numerous public bids held there, as well as significant private investment.

Because of Poland’s and the eurozone’s relatively strong inflation and cheap borrowing rates, investments are intensifying, and we will be vying for the same resources“, concluded Trojanowski.

Budimex

Budimex has the biggest portfolio, worth as much as PLN 14bn. The value of the group’s orders slightly topped PLN 10bn in 2017, when many orders from the 2014-23 EU perspective were starting the execution phase. Only from January to September 2021, the company received contracts worth almost PLN 6bn, with more than PLN 1bn in the pipeline.

Strabag

Strabag has a portfolio of orders which is about PLN 7.5bn. During 11 months of this year, the company signed contracts worth PLN 2.5bn more than in the same period last year.

PORR

PORR also has contracts worth almost PLN 7bn in its portfolio. The cubature construction sector accounts for PLN 1.1bn, railroad construction PLN 1.8bn, infrastructure construction PLN 3.2bn, and industrial construction PLN 0.4bn. The remaining orders are carried out by subsidiaries.

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