Engineering Inc. - March/April 2015 - (Page 4)

MarketWatch By gerry donohue Entry Strategy for the Asia-Pacific Market Market Challenges "You have to be in multiple sectors in a lot of these markets because they aren't big 4 ENGINEERING INC. enough to sustain a focused Davert. "You're not going to presence," says Marshall just show up and compete Davert, MWH government successfully." and infrastructure president MWH's acquisition of the for the Americas and Asia English firm Watson HawksPacific. ley in 1990 brought with it a Kleinfelder President and network of established offices CEO Bill Siegel tells of workin numerous British Coming on projects on a halfmonwealth countries, includdozen Pacific islands for a cliing Australia and Hong Kong, ent. "It wasn't just a logistical as well as a Taiwan office, challenge," he says, "but we which acts as a springboard had to register as a corporate into the Chinese market. entity on each one." CH2M HILL gained its Registering can be a chalbroad Asian presence by lenge. For example, in Brunei, acquiring the U.K. firm Halwhich Forbes magazine ranks crow four years ago. "Halcrow as the fifth-richest country in has supplied about 50 percent the world, half of the board of our Asia Pacific staff," says members of a registered comNye. "That includes all the pany must be Brunei residents. people in Hong Kong, half the "The importance of underpeople in Australia and a good standing the culture can't be number in Malaysia." overstated," says Davert. HDR Managing DirecSeveral firm leaders caution tor of Australian Operations that certain legal and ethiDavid Bell says, "We entered cal issues can put a company [Australia] carefully and cauafoul of the Foreign Corrupt tiously, did our homework Practices Act. "When it comes and then acquired three good to ethics and comorganizations." pliance, you have Kleinfelder's to be vigilant and Siegel also pur"One of the protect yourself," sued business in challenges is Nye says. Australia. "We determining if followed where Strategic you're going into our existing clients are spending Entry a new market Given the unique money and confor a single character of many tracting for serassignment or of these countries, vices, and where to set up camp. we see long-term firm leaders say What is your acquisition is the economic growth. only viable entry Australia was an strategy for strategy. obvious choice, the long term? "Parachutso we opened One project ing a guy into a an office there, doesn't make a market and growstudied the marbusiness," says ing the business ket and then Steve Nye of organically is a acquired a couple nonstarter," says of firms." CH2M HILL. MaRCh / apRIl 2015 Operating Down Under Australia has been a first port of call for many U.S. firms heading to Asia. They have established a presence in its friendly confines, built up staff and knowledge and then expanded into other markets. "It's reasonable for U.S. companies to be successful in Australia and New Zealand," says Davert. "It's a relatively large market, and the rule of law and contracting procedures are similar." For most of the past decade, Australia's market has been strong, as it has provided the coal to power the Chinese economic engine. But as Chinese growth rates have slowed, the Australian economy has fallen off. "Probably 50 percent of those revenues have dried up in the past few years," says HDR's Bell, "but we expect Australia to re-emerge in 2016." Scott e BarBour/getty ImageS M ore than half of the world's population lives in Asia-a percentage that is forecast to increase. Asian GDP is expected to grow by 5.6 percent in 2015, and seven of the 10 fastest-growing economies are in Asia. But the Asia-Pacific market is a study in contrasts. It includes two first-world economies, Australia and Japan, and a host of thirdworld economies. It is home to two huge fast-growing economies-China and India, which are expected to generate 25 percent of global GDP by 2019-and to the four smallest economies, including Tuvalu, which has an annual GDP of less than $40 million. Many of these markets welcome foreign firms, while others, for all intents and purposes, are closed to foreigners. Even the larger markets- China, India, Japan and South Korea-can be inhospitable to Western firms, due either to formal regulations or informal hurdles. "Western firms doing business in Asia have run into difficulties dealing with the different markets and cultures," says CH2M HILL Asia Pacific Managing Director Steve Nye. "But because of the global tilt towards Asia, with its rapidly growing economies and emerging middle class, it's where a lot of firms want to be."

Table of Contents for the Digital Edition of Engineering Inc. - March/April 2015

Engineering Inc. - March/April 2015
From ACEC to You
Market Watch
Legislative Action
Senator Orrin Hatch
Breaking the Mold
App to Order
Making a Quality-of-Life Difference
Leading the Pac
2015 Annual Convention Preview
Guest Column
Business Insights
Members in the News
Mergers and Acquisitions

Engineering Inc. - March/April 2015