Building firm's strategic moves lead to diversification and healthy growth
Challenges wrought by a downturn in the construction sector shortly after China State Construction International Holdings (CSCI) went public saw the company being led to a surer footing that contributed to awards in the executive director category and the board category of listed companies (non-Hang Seng Index Constituents).
Under vice-chairman and chief executive Zhou Yong and the board, the firm has successfully adopted strategic initiatives which resulted in the diversification of its domestic and international operations and sustainable growth.
CSCI started its construction business in Hong Kong in 1979. As one of the largest construction contractors in the city, the company is a vertically integrated operation encompassing building construction and civil engineering projects and other peripheral operations such as foundation work, site investigation, mechanical and electrical engineering, highway and bridge construction, concrete and pre-cast production.
Shortly after CSCI had gone public in Hong Kong in 2005, it experienced an immense challenge brought about by the serious contraction of the local construction sector. Zhou led the crucial strategic transformation of CSCI through a series of mergers and acquisitions. Its construction business developed from an enterprise focusing on projects in Hong Kong into a regional and international operation which covered Macau, the mainland, the United Arab Emirates and India. Zhou worked in close co-operation with the board of directors on an innovative two-pronged expansion strategy focusing on building construction and infrastructure investment. Through its successful business re-engineering, CSCI has sustained business growth and its annual net profit has been increasing at a yearly compound rate of 55.1 per cent since its listing.
The board has been seeking to enhance the company's operations with scientific management strategies and high corporate transparency. With complete faith in the management team, the board supported it with specialised professional knowledge and advice when CSCI undertook its strategic business transformation, the company said.
'It has also made tremendous efforts in helping CSCI develop a distinctive corporate culture and build solid ethical standards for all staff. Embracing its corporate spirit of paying close attention to minute details in the operation, exercising caution in the implementation of long-term plans, and building a sound foundation for greater success, CSCI has fully integrated its adherence to well-developed corporate governance policies into its daily business,' the firm said.
Zhou led the development of a sound and effective corporate governance system of CSCI and made it an integral part of its operations in co-ordination with the board. At its regular meetings, the board encourages the active participation of independent non-executive directors.
Through the operation of the remuneration committee, audit committee and nomination committee, the board ensured CSCI's operation was in full compliance with corporate governance regulations and policies, the company said. 'Among the various measures devised to fully protect the interests of the shareholders are the close performance monitoring of individual executives in the management team and the regular reviews of their salaries. CSCI also attaches great importance to investor relations and constantly enhances communication with its shareholders. The company has improved its business operations by adopting the constructive suggestions from its shareholders.'
Upholding high standards of business ethics, Zhou has led a team of specialists to develop an employee handbook of business ethics and a complementary training programme. The ultimate objective is to ensure CSCI operates in strict adherence to laws and regulations while meeting high moral standards.
Corporate social responsibility is another area in which the company has deployed a lot of resources over the past several years. CSCI has taken a proactive approach to contributing to community services and participating in charitable programmes.