CITIC Construction is an integrated engineering services company providing management and engineering, procurement and construction (EPC) services on large industrial and civil infrastructure projects. Its key markets include Africa, Latin America and Central Asia, and the company is currently expanding its operations in European markets and within China. With an established foothold in infrastructure, housing and industrial construction, the company is also developing businesses in the areas of resources, energy, agriculture and environmental protection.
Leveraging CITIC’s vast resources and network, CITIC Construction not only provides engineering, procurement and construction (EPC) services, but also a suite of value-added and integrated services such as project planning, design, investment, financing, management, procurement, operation and maintenance. The range of these services offers a significant competitive advantage in developing countries.
Through the successful delivery of large-scale projects important to the lives of the communities in which it operates, the company has established a strong brand and reputation. It is widely regarded today as a highly successful Chinese enterprise.
Year in review
In 2015, sluggish growth worldwide continued to impact the entire sector. Due to persistently low prices for oil, the project pipeline of Engineering Contracting companies also slowed in oil-producing countries such as Venezuela, Angola, Nigeria and Russia.
For the year 2015, the company recorded revenue of RMB10,174 million and net profit attributable to shareholders of RMB1,809 million. While new projects such as a US$756 million office tower project in Caracas commenced in 2015, they have not yet begun to contribute significantly to revenue growth. The Social Housing KK Project in Angola, a seven year contract, entered its final stage.
The profit delivered from the current construction projects is higher than the previous year, driven primarily by strict cost disciplines. Therefore, net profit recorded a 6% increase despite the revenue decrease in 2015.
In 2015, CITIC Construction expanded its foothold into new markets so as to diversify its project portfolio. Securing its first contract in a Western country, the company entered into an EPC framework agreement with ABP Investment (London) Ltd. to redevelop London’s Royal Albert Dock into the “Asian Business Port”, a new business district. The project represents a total value of £1.7 billion.
Riding on the increasing opportunities created by China’s One Belt One Road initiative, CITIC Construction also expanded business development in key markets targeted by the initiative. During the year, the company began projects in Belarus, including the construction of an auto assembly line for Chinese automaker Geely and the redevelopment of a linen manufacturing plant. In Kazakhstan and Thailand, CITIC Construction began exploring largescale private public partnership (PPP) projects.
Significantly enhancing its ability to compete for large projects in China, CITIC Construction obtained a premium-class building and engineering certification at the beginning of 2015.
By the end of the year, the total value of signed contracts reached RMB212.8 billion, of which RMB8.3 billion was contributed by new contracts signed during the year.
Revenue by geographical distribution
Tiuna social housing project, Venezuela
Located in Caracas, this social housing project is developing 116 apartment blocks and 29 public buildings that will create more than 13,000 new homes. Upon completion, the project will contribute significantly to raising the standard of living and environment of the local community. The total contract value is US$1.69 billion. By the end of 2015, over 57% of the project was completed. All 34 blocks in Phase I have been delivered to the employer, and the main structure of all 26 blocks in Phase II have been completed.
Zango real estate development (RED) project, Angola
CITIC Construction signed a framework agreement with the Angola National Petroleum Company for the RED social housing project in 2010. As the EPC contractor on the RED social housing project, CITIC Construction is responsible for the design, procurement, construction and associated infrastructure for social housing in 20 locations across 14 Angolan provinces and cities. Located in the southern part of Luanda with a total construction area of 910,000m2, this project has a contract value of US$1.47 billion. Upon completion, the project will provide 8,000 apartments, along with associated infrastructure and urban facilities. By the end of 2015, more than 94% of the project had been completed, including the completion of delivery and inspection of all housing parts.
Malanje agricultural project, Angola
Located in Malanje province in the east of Luanda, this project involves the reclamation of 8,000 hectares of corn and soya bean fields and the construction of a 22,400-tonne corn powder processing plant with storage and drying facilities. The total contract value of this project is US$118 million. It is CITIC Construction’s first agricultural project. By the end of 2015, the full production value of the project was completed, and plantation, harvesting and processing are now underway.
Geological study project, Angola
Signed in October 2013, this project involves carrying out airborne geophysical surveys, 1:250000 geochemical surveys, 1:250000 regional geological mapping, 1:50000 professional geotechnical engineering exploration research, 1:50000 metal mineral exploration and 1:50000 building materials mineral exploration in the northwest quarter of the Angolan homeland. The total contract value of this project is approximately US$77 million and the contract period is 48 months. It started construction in August 2014 and 8.3% was completed by the end of 2015, wherein the airborne geophysical work has been completed nearly 75%.
Geely automobile production line project, Belarus
This project is to build an automobile production line with an annual output of 60,000 passenger cars, including the welding shop, the paint shop (including the small piece paint shop) and the assembly shop. As the EPC contractor, CITIC Construction is responsible for the design, procurement, civil construction, equipment installation, commissioning, performance tests and training of operational staff of the employer. Signed in March 2015, the total contract value of this project is US$300 million, and the contract period is 21 months. It started construction in August 2015. By the end of 2015, the preliminary design had been completed, the supply contracts of three shops(including welding shop, the paint shop and the assembly shop) signed, and the main frame of steel structure of assembly shop installed.
Air force and navy command headquarters building project, Venezuela
Located on both sides of Street Bolivar in the Fuerte Tiuna area of Caracas, this project has a total land area of about 7.18 hectares and a total construction area of about 210,000 square meters. It consists of two buildings, each of which has nine separate four-floor annexes, which reach the connection with a central corridor. This project was signed in August 2014, and the total contract value is approximately US$760 million. It started construction in March 2015 and 25% was completed by the end of 2015, the concrete underground structure of which has been substantially completed.