Group chairman and chief executive Paul Hodgkinson said the strategy was a response to the growing number of Simons’ clients that were either expanding abroad or coming from the USA to Europe.
He said: “We have to go with them or we will lose them to local suppliers, which can then work for them in the UK, and we don’t want that.”
Simons Group, which is privately owned, turned over about £200m of construction work in the year to 31 March. Its clients include The Gap, McDonald’s, Asda and Debenhams.
Hodgkinson said he is already in discussions with contractors in the USA and Denmark. He expects to have a number of relationships set up by this time next year. He said that all the deals will be on a joint-venture or partnered basis. “The work won’t necessarily go through our books,” he said. “We will be procuring on a local basis with a local partner. It will be a combination of their cultural knowledge and the application of our procurement expertise.
“We could act as construction manager or contractor, depending on the deal – each client procures in a different way,” he said.
Simons’ strategy is similar to one launched by Mansell last year, which is also a privately owned medium-sized contractor that plans to grow internationally through joint ventures.
Both companies are aiming to expand abroad without the benefit of a large balance sheet. Their plans clash with most current City thinking. A report by Flemings Research earlier this year suggested that a super league of European contractors was emerging that would effectively swallow up the best business from the biggest clients.
Hodgkinson rejected the idea of Simons selling out to a bigger player and said: “Flemings is saying ‘big is better’, but I’ve seen it before, and these things tend to go in seven-year cycles, soon small will be beautiful again.”
He added: “The economies of scale you can derive from size are quite alluring, but what customers want is great service. It is extremely difficult to get that with larger contractors.”
Hodgkinson also said Simons is opening an office in Manchester as a springboard to work in the North-west. He expects Simons’ construction turnover to rise to £220m in the year to the end of March 2001.
