Avda de la Buhaira 2
Telephone: +34 95 493 71 11
Fax: +34 95 493 70 02
Web site: http://www.abengoa.es
Sales: EUR 1.69 billion ($2.01 billion) (2004)
Stock Exchanges: Bolsa de Madrid
Ticker Symbol: ABG
NAIC: 238210 Electrical Contractors; 221122 Electric Power Distribution; 221310 Water Supply and Irrigation Systems; 221320 Sewage Treatment Facilities; 236115 New Single-Family Housing Construction (Except Operative Builders); 236116 New Multi-Family Housing Construction (Except Operative Builders); 236117 New Housing Operative Builders; 237990 Other Heavy and Civil Engineering Construction; 334511 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing; 334512 Automatic Environmental Control Manufacturing for Regulating Residential, Commercial, and Appliance Use; 334513 Instruments and Related Product Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables; 334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals; 334519 Other Measuring and Controlling Device Manufacturing; 335311 Power, Distribution, and Specialty Transformer Manufacturing; 335931 Current-Carrying Wiring Device Manufacturing; 336510 Railroad Rolling Stock Manufacturing; 541710 Research and Development in the Physical Sciences and Engineering Sciences; 541910 Marketing Research and Public Opinion Polling; 562111 Solid Waste Collection
In slightly more than a decade, Abengoa S.A. has transformed itself from a company focused almost exclusively on the engineering and industrial construction market into a diversified, international corporation. Abengoa's operations are conducted through four primary divisions: Bioenergy; Environmental Services; Industrial Engineering and Construction; and Information Technologies. The company's Bioenergy division is centered on Abengoa Bioenergía, the largest European, fifth largest American, and second largest global producer of bioethanol, with an installed capacity of more than 700 million liters. Bioenergy accounted for nearly 20 percent of Abengoa's EUR 1.69 billion ($2.01 billion) in 2004 sales. Environmental Services operates through Abengoa's majority control of publicly listed Befesa, acquired in 2003, and focuses especially on recycling and industrial waste management, as well as engineering and construction for water treatment and waste management. This division added 21.3 percent to company revenues. Information Technologies focuses on providing network systems and integration for the energy, traffic control, transportation, and environmental markets, accounting for 16 percent of group revenues in 2004. Finally, Industrial Engineering and Construction represents Abengoa's historical core, with a particular focus on the electrical and telecommunications markets, as well as the construction of industrial facilities and power plants, including fossil fuel and renewable energy (bioethanol, wind, solar, geothermal, and biomass) plants. This division accounted for nearly 43 percent of the group's sales in 2004. Spain remains Abengoa's major market, accounting for nearly 60 percent of group revenues. The company is listed on the Bolsa de Madrid; the founding Benjumea family maintains a 55 percent stake in the company. Felipe Benjumea Llorente and Javier Benjumea Llorente, son and grandson of Abengoa's founder, serve as company co-chairmen.
Construction Business in the 1940s
Abengoa was founded in Seville, Spain, in 1941 by Javier Benjumea Puigcerver to provide installation services as Spain built out its electricity grid. After conquering the Seville region, Abengoa launched a national expansion drive. The company also broadened its capabilities, beginning installation services for the country's telephone network as well. By the end of the 1950s, the company had grown into one of Spain's leading providers of engineering and construction services to both industries.
Having consolidated its hold on the Spanish market, Abengoa turned to international growth in the 1960s. The South American market was the logical choice for the next phase in the company's development. Before long, Abengoa had added operations in Chile, Brazil, Argentina, Peru, and elsewhere in South America, becoming a leader in that market. The company also extended its operations as far north as Mexico. Abengoa developed operations in other European markets, primarily in France, Belgium, and Switzerland, over the following decades. Its main focus outside of Spain, however, remained the Latin American market.
Abengoa not only expanded geographically, it expanded into new areas of business, adding new expertise in areas such as instrumentation, automation, supervision, and surveillance systems. A major milestone in this effort came with the takeover of Sociedad Anonima de Instalaciones de Control (Sainco) in 1969. Sainco, founded in 1963, focused on developing, manufacturing, and maintaining control systems and related industrial process supervisory systems, while entering the road traffic control market in 1968. As part of Abengoa, Sainco took over the company's existing operations in the electronics field.
The company proved especially strong in developing its own proprietary systems and technology, helping to consolidate its position as a market leader both in Spain and abroad. The company's technology capacity also enabled it to expand its capacity for control systems, such as traffic control systems, with the launch of turnkey systems in 1974. This activity in turn allowed the company to develop a level of expertise in information systems, digital electronics, and real-time computing. In 1989, Abengoa created a new Communications Division, which combined the company's interests in control systems and telecommunications systems integration, with Sainco as its core.
Nonetheless, the large majority of the group's revenues came from its construction and engineering operations. Into the 1990s, the focused nature of Abengoa's operations had become something of a liability. The downturn in the construction market at the beginning of the 1990s especially exposed the group's vulnerability to cycles in the market. At the same time, the market for installations had become relatively mature, promising slower growth in the near future. Abengoa was all the more vulnerable because of its reliance on the public sector—in particular, the Spanish telephone monopoly Telefonica—which represented 80 percent of its sales in the early 1990s.
Restructuring in the 1990s
Under its new chairman and son of the company's founder, Felipe Benjumea Llorente, Abengoa launched a restructuring of its operations in 1992. As part of this effort, which required four years to complete, the company cut back its workforce by 14 percent; it also boosted its use of temporary workers by some 50 percent during this period.
The group's restructuring effort, however, went further than a mere streamlining. The company adopted a policy of seeking out partnerships, especially in its Latin American market, which enabled it to achieve strong international growth during the 1990s. Back at home, Abengoa made an effort to expand its customer base beyond its reliance on the public sector, successfully reducing the part of public works projects to just 12 percent of its sales.
In 1992, the company adopted an entirely new strategy, one focused on diversifying the company's operations beyond its reliance on the construction and engineering markets. The company developed four key areas of interest, creating four new divisions: Energy; Environmental and Urban Systems; Control Systems and Telecoms, led by Sainco; and Installation. The underlying strategy to develop fully integrated operations, including not only the engineering, manufacturing, and installation, but also sales, financing, maintenance, and even plant management services.
In 1995, Abengoa launched its entry into the Environmental and Urban Systems sector with the acquisition of a stake in Befesa, via one of its subsidiaries. Befesa had been established just two years earlier when a number of Spanish companies, led by BUS and including Metall Capital, Duro Felguera, and Indumetal, merged their environmental systems businesses, including industrial waste management and recycling operations, into a single entity, which was then listed on the Bolsa de Madrid. In 1999, Abengoa acquired its first direct shareholding in Befesa, buying up 7.44 percent of the company. By 2000, Abengoa had bought out BUS's 50.01 percent holding in Befesa, and by the end of that year, Abengoa had increased its position to nearly 83 percent, at a total investment of EUR 300 million ($250 million). The following year, Abengoa transferred its existing environmental businesses into Befesa.
Mission: Abengoa is an industrial and technological company providing solutions for sustainable development, the information and knowledge society and infrastructure creation. It promotes innovation as a valuable asset and source of sustained growth. The focal points of Abengoa activity are its customers, the professional development and welfare of its employees, and the creation of value for its shareholders.
Vision: Abengoa believes that a mandate for innovation in a market economy context is an efficient and necessary instrument for becoming a sustainable development company.
Diversified Success in the 2000s
In the meantime, Abengoa also had launched its entry into the energy market, choosing to build a presence in the market for renewable fuels. The company's first effort in the renewable energy market was in the operation of a wind farm, based on the company's own proprietary technology. The company then launched construction of a bioethanol plant. Completed in 2000, at an investment of EUR 94 million ($80 million), the plant initially produced 100 million liters per year, before rising to 150 million liters by 2005. The success of this plant led Abengoa to sell off its wind farm operations in 2001, to The Netherlands' Nuon, raising nearly EUR 110 million. Abengoa then used the proceeds of the sale to boost its ethanol operations, buying up High Plains Corporation, in the United States, for EUR 100 million in 2002. High Plains was then renamed as Abengoa Bioenergy Inc. In that year, as well, Abengoa added a second Spanish ethanol plant, in Galicia, with a production capacity of 126 million liters per year.
In 1999, Abengoa had launched Telecom Ventures, or Telvent, which took over from Sainco as Abengoa targeted an expansion into the wider telecommunications arena. Telvent also became responsible for Abengoa's systems and networks operations, which were relaunched under the new brand names Abentel, Carrierhouse, and Internet Datahouse. The company added a number of new brands, including Telvent Interactiva in 2000 and Telvent Outsourcing in 2002. In 2003, Telvent acquired Mesto Corporation's Network Management Solutions divisions, based in the United States and Canada. Soon after, Telvent rebranded its operations, placing all of its business under the single Telvent banner. This led to Telvent's public offering, in 2004, with a listing on the NASDAQ.
By the end of that year, Abengoa had become a much different company from what it had been just ten years earlier. The company's sales had nearly quadrupled, nearing EUR 1.7 billion ($2.1 billion). The company also had succeeded in reducing reliance on its original construction and engineering business. While this unit remained the company's largest, at nearly 43 percent of sales, Abengoa had gained a strong presence in its new Energy and Environmental Services, while expanding its Information Technologies operations as well. Abengoa appeared to have engineered strong growth for the new century.
Abecnor Subestaciones, S.A. de C.V. (Mexico); Abecom, S.A.; Abeinsa, Ingeniería y Construcción Industrial, S.L.; Abelec, S.A. (Chile); Abema Limitada (Chile); Abenasa Transmissao de Energia, Ltda. (Brazil); Abener Energía, S.A.; Abengoa Bioenergía, S.L.; Abengoa Bioenergy Inc. (U.S.A.); Abengoa Brasil, S.A. (Brazil); Abengoa Chile, S.A.; Abengoa Limited (U.K.); Abengoa México, S.A. de C.V.; Abengoa Perú, S.A.; Abengoa Puerto Rico, S.E.; Abenor, S.A. (Chile); Alianza Befesa Egmasa, S.L.; Asa Bioenergy Holding, AG (Switzerland); Befesa Aluminio Bilbao, S.L.; Befesa Argentina, S.A.; Befesa Brasil, S.A.; Befesa Chile, S.A. Santiago (CL) 160 100.00 A. Chile/AMA a-b (2).
Telefonica de Espana SAU; Energie Baden-Wurttemberg AG; ACS Actividades de Construccion y Servicios S.A.; Roggio E Hijos Benito S.A.; Fomento de Construcciones y Contratas S.A; Gas Natural SDG S.A.; Groupe Fabricom S.A.; Ferrovial Agroman S.A.; Sociedad General de Aguas de Barcelona S.A.
- Javier Benjumea Puigcerver founds Abengoa as a provider of electricity installation services.
- The company launches national expansion.
- International expansion begins, with entry into the South American market.
- The company acquires Sainco and enters Control Systems.
- A restructuring and diversification strategy is initiated.
- The company acquires a stake in Befesa as an entry into environmental services.
- The company launches Telvent, which takes over Sainco operations.
- Abengoa acquires control of Befesa; construction is completed on the first bioethanol plant in Spain.
- The company sells its wind farm operations to Nuon in The Netherlands.
- High Plains Corporation, a bioethanol producer, is acquired.
- Metso Corporation's U.S. and Canadian Network Management Solutions division is acquired.
- Telvent is listed on the NASDAQ.
"Abengoa Buys High Plains," Chemical Market Reporter, November 5, 2001, p. 3.
"Abengoa Expands U.S. Bioethanol Capacity," Chemical Market Reporter, May 19, 2003, p. 3.
"Abengoa Wins Concession," Latin American Power Watch, November 23, 2004, p. 4.