2014 was rewarding for both WSP and Parsons Brinckerhoff in Asia Pacific, particularly during the last quarter as we combined two strong global businesses. Asia performed strongly while trading conditions in Australia/New Zealand improved after a difficult 2013.
As we finished the year and entered into 2015, we focused on completing a swift and efficient integration of WSP and Parsons Brinckerhoff in order to deliver a strengthened client offering. We also looked to capitalise on early gains secured through the complementary capabilities the firms offer in the Asia Pacific region.
In Asia (the fastest growing economic region of the world), WSP and Parsons Brinckerhoff’s combined expertise reinforced our position as the leading provider of building engineering consulting services for complex buildings with expert capabilities in mechanical, electrical, plumbing (MEP), structures and façades.
We also delivered a strong performance in the transportation and health care sectors by leveraging our strong and established client relationships.
In the buildings sector, both WSP and Parsons Brinckerhoff continued to provide professional services for some of the region’s largest and most technically challenging projects, including MEP services for a 700 m-tall mixed-use tower in Suzhou (Eastern China) and integrated structural, façade and building MEP consultancy services for the One Avenue mixed-use development in Shenzhen (Southern China).
With reference to the health care sector, the firm provided integrated civil, structural, geotechnical and building MEP consultancy services for the Hong Kong Hospital Authority’s redevelopment of Kwong Wah Hospital.
On the transportation front, Parsons Brinckerhoff’s Asia team maintained its long-term relationship with the Singapore Land Transport Authority and the Hong Kong MTR Corporation, working on projects such as the Eastern Region Line in Singapore and the Lo Wu Station modification project in Hong Kong. As part of a joint venture, we also provided general consultancy services for Taiwan Taoyuan International Airport Terminal 3.
Connectivity is a key element of our business model and a joint endeavour involving WSP’s offices in San Francisco, Singapore and Malaysia won a contract for the Tradewinds Project, which is set to be Kuala Lumpur’s tallest building. Global connectivity (in this instance between Greater China and Australia) also resulted in significant project commissions in Sydney and Melbourne for Greenland, one of China’s largest real-estate developers.
In Australia/New Zealand, although falling commodity prices continued to challenge the resources sector and the power sector suffered from a shift away from capital investment, the local economy experienced a modest recovery, reflected in better business performance compared with 2013.
WSP’s steady-to-strong market in the buildings sector was supported by foreign investment and by the diversification of our expertise thanks to the acquisition of WINWARD Structures in May 2014. This transaction, based on a strong relationship fostered through successful delivery of major projects such as the Melbourne Convention Centre and the Southern Cross Station, underpinned a new specialist structural, civil and façade consultancy arm: WSP Structures.
During the year, WSP worked on 13 certified Green Star projects, including 720 Bourke Street, Melbourne. This building received a 6 Green Star rating, representing world leadership in sustainable design; we take special pride in this achievement. WSP was also appointed to the consortium to deliver the North West Rail Link, another major win for our team.
A major win in New Zealand was the Christchurch Convention Centre, where we act as part of a consortium to deliver this significant project, which is part of the Christchurch re-build programme.
On the transportation side, Parsons Brinckerhoff once again lived up to its reputation for expertise as we won various high-profile transportation contracts in 2014, including Sydney Rapid Transit’s second Harbour crossing and the Melbourne-Brisbane Inland Rail Study. The transport team also provided design management and design support services for the Waterview Connection project (New Zealand) as part of the Well-Connected Alliance.
The water utilities business continued to transition into a market that is optimising expenditures on existing assets and building its portfolio of long-term contracts. The environment business remained consistent throughout 2014.
In the resources industry, Parsons Brinckerhoff was appointed project management consultant (PMC) for Adani Mining Pty Ltd.’s multibillion-dollar Carmichael Coal Integrated Mine, Port and Rail Project in Queensland. This win, stemming from the existing PMC role on the Roy Hill iron ore project in Western Australia, highlights our preeminent position as PMC on large-scale mining projects.
REVENUE SYNERGY OPPORTUNITIES
After a few months of combined operations, the “natural fit” between our two businesses has already translated into revenue synergies through joint bidding activity and opportunities where we would not have had involvement as stand-alone businesses.
In the resources sector, for example, revenue synergy success included the mining team’s inclusion on the panel of MMG Ltd., an international mining firm, in support of its global mining activities. This win resulted from the early collaboration and natural synergy between the mining divisions of Parsons Brinckerhoff in Australia and WSP in Canada.
Early success in buildings in Asia included the Dongjiadu mixed-use development project in Shanghai, which combined our respective MEP consulting capabilities.
In Australia/New Zealand, short-term challenges include continuing falls in commodity prices and a reduced commitment to public infrastructure spending. In the medium term, the business is well positioned to capitalise on an extended range of synergistic opportunities. In Asia, we expect to see steady growth and to increase our position within the structural building sector and the transportation infrastructure markets.
This connectivity will be one of the key elements of our organic growth. We have already identified various key areas that should be fertile ground for ongoing collaborations and revenue synergies, such as:
As we move into 2015, our objective is to ensure that our people work closely together as we continue to drive our respective strategies with the objective of focusing our efforts on revenue synergies. Given the depth of knowledge among the teams, our senior leadership appointments have already captured the best from both businesses. We will continue to leverage the progress we have made towards integrating our expertise and people. I am convinced that our integrated business will offer potential for growth as well as enhanced opportunities for our people. After a few months of working as a team, it is now evident that the strategic rationale behind the WSP and Parsons Brinckerhoff merger is perfectly encapsulated across our region, where our complementary capabilities already resonate with many clients.
In 2015, we will continue to strengthen our client offering by providing greater value not only in our portfolio, but also in our operational and management practices.
The long-term drivers for infrastructure investment remain positive and I have full confidence that the combined entity of WSP and Parsons Brinckerhoff will provide us with further resilience and a strong platform for growth. In addition, our ability to serve clients and pursue iconic projects will be enhanced and our employees will have better professional development opportunities.