New Arcadis chief targets better integration

Kenneth Poon, newly appointed Asia chief executive of Arcadis, is looking at innovative ways to drive the integration of various business units as the firm continues its expansion in Asia

PUBLISHED : Wednesday, 10 December, 2014, 6:08am
UPDATED : Wednesday, 10 December, 2014, 6:08am

Forty years ago, Kenneth Poon joined cost-management firm Langdon & Seah after graduating from Polytechnic University.

He has been involved in key projects such as the Hong Kong Convention and Exhibition Centre as well as the China World Trade Centre and CCTV Headquarters in Beijing.

Now he has been appointed Asia chief executive of Arcadis, an international natural- and built-asset consultancy that is growing quickly in the region through major acquisitions, including Langdon & Seah in 2012.

To drive the integration of various business units next year, Poon said he would try to foster a better understanding of how the different brands' capabilities could be used to better serve clients.

Arcadis has 6,000 staff in Asia, out of a global workforce of 28,000. The United States remains its top market and revenue driver.

Next year, Langdon & Seah, EC Harris and inProjects, a project management firm helping clients to roll out retail stores, will be brought under one organisation and leadership, but other sister firms including British engineering firm Hyder Consulting, US designer Callison and RTKL, which offers architectural and interior design services, will continue to report separately.

Can you tell us more about Arcadis in Asia?

Arcadis has had a small operation in Asia for the past 10 years, mainly to serve large multinational companies here. Then in 2011, it acquired EC Harris and in 2012 it bought Langdon & Seah.

Arcadis' main business has always been in the United States. But with the acquisition of EC Harris, Arcadis has expanded into Asia and the Middle East, which are two of the main emerging markets. So the company is trying to balance its business portfolio across the globe.

During the past few years, there has been a lot of growth in Asia, the Middle East and Latin America.

We also have a very big set-up in Brazil, Chile and Mexico, mainly in the mining and environment sectors.

What is the integration plan?

Different businesses are still run as separate units. But in 2015, we are going to pull everything together so that we can help each other and come up with some new service lines that are unique to us. We'll look into how we can cross-sell products and supplement each other.

We are already doing that with our design sisters - RTKL and Callison. As an example, we are working with them on how we can supplement their design using our cost database and development management expertise.

When they finalise their design, it will make more commercial sense than other designers. RTKL is looking forward to creating shopping malls that generate high revenues and enjoy low maintenance costs.

What is unique to your services?

We have a huge database about cost management. Hong Kong has the quarterly Building Works Tender Price Index, which tracks construction costs. Two years ago, we started using public statistics to predict the trends [of the index]. Today, we predict what the index will be in the next two quarters. We are the first in Hong Kong to do this kind of prediction.

We put a lot of emphasis on research and innovation. For example, we were the first in developing an electronic tendering system. This tendering system has been adopted by the Hong Kong Housing Authority. We are working on how to refine our system so that the housing authority will use it on all of its projects.

Is the government a big client for your business in Hong Kong and on the mainland?

The Hong Kong government is a big client of ours. On the mainland, we do a lot of work for state-owned enterprises, but our main business is for private investors, including property developers like Vanke and China Resources Land.

Which sector is the biggest revenue generator in China?

At the moment, it is the commercial development market. But we are working hard on other parts, including financial institutions, retail and aviation.

We worked on terminal three of the Beijing international airport and now we are part of the winning team for the new second airport in Langfang.

How does the property market slowdown in China affect your business?

The property development market in China is so big that we have only taken a tip of the iceberg. So even with the slowdown, there is still a lot of work. It all depends on how we deliver our best value and gain the confidence of clients.

Developers are trying to save costs. Some may have cut off the consultancy part, but others are working more closely with us. At the moment, we have not seen a very substantial impact.

Apart from commercial developers, we still have many clients from other sectors, such as companies investing in modern logistics facilities to meet demand from online shopping. We are working with one client on seven or eight new logistics centres.