Cristiano Becker is director of financial structuring and international relations at PROPAV Infraestructuras, a Brazilian group dedicated to the development of infrastructures and power plants in emerging countries that opened its office in Madrid in July. Their objective is to manage the rest of the holding companies of the PROPAV GROUP, from Brazilian origin, from here. In their search for a location for their headquarters, Madrid competed against London and Berlin.
We chose the Spanish capital, says Mr Becker, because of the quality of its suppliers. “Madrid is the world capital of engineering”, he proclaims in this interview with Madrid Investment Attraction. “The great engineering companies are all here and Madrid is recognized as a leading centre in the field.”
M.I.A.: PROPAV is a very large group. What is its history and in which sectors does it operate?
C.B.: The PROPAV group has been in business for almost thirty years. It has its roots in Brazil where it started off as a company called PROPAV Construction and Assembly (PROPAV Construção e Montagem in Portuguese). It operates in the industrial assembly and the oil and gas sectors. Today it works mainly in Brazil and its main clients are the large companies in the sector (Petrobras, Transpetrol, etc.).
The group has another contractor company called Motrice in the energy sector, mainly renewable energy. In recent years it has become one of the major solar energy players: it sets up anything from small substations to transmission lines, thermal generation plants, and solar and wind plants.
Motrice and PROPAV had international projects in emerging countries, in sub-Saharan Africa and Latin America. Motrice built a solar generation plant in Zaragoza three years ago, but its projects are mainly in those markets.
Last year, the group, together with its shareholders, made the decision to implement a strategic and corporate plan to internationalize and consolidate all business management. As part of this plan, a global holding company called PROPAV Infraestructuras was created, which leads the internationalization plan and coordinates all the group’s actions in the different markets. Its main areas of activity are the development of infrastructures (roads, bridges, airports, ports, and everything related to heavy infrastructure), the energy sector (solar and wind plants) and the industrial assembly sector.
M.I.A.: If the group is Brazilian and its business is in Africa and Latin America, why choose Spain? What lead you to settle here?
C.B.: Our business model is centred on offering complete solutions in infrastructure, energy, and assembly lines. We take care of planning the project, coordinating the design, engineering, etc. We coordinate a long supply chain, and we take all of this to an emerging country in Africa or Latin America, in addition to structuring the necessary financing so that clients can contract the group’s services.
For us to coordinate these areas, it is important to be close to our main suppliers, engineering companies, investment banks and export credit agencies. Madrid is the world capital of engineering: the great engineering companies are all here and this city is recognized as a leading centre in the field. In Madrid there are large construction companies with which we can make strategic alliances so that they can participate in the projects we are involved in.
The Spanish supply chain is very competitive. There are providers we have already worked with in the past. We are a Brazilian company, but we work with large Spanish companies. Our business model does not imply working specifically in the countries where we have a presence, but rather using them as a platform to access countries where there are projects. Madrid is a logistics hub and the Spanish Government’s plans are centred on exports and on supporting the internationalization of companies. That fits very well with our plans.
M.I.A.: Did you contemplate the possibility of setting up shop in other countries?
C.B.: Yes. Before implementing our strategic plan, we thought long and hard about which were the countries where we would have better access to the supply chain, where we could approach different suppliers for projects of a different nature. We considered factors like the supply chain, cultural issues, the cost of living and the skills of the workforce. In the end Madrid was the best option for us.
M.I.A. What other cities did you consider?
C.B.: London and Berlin.
M.I.A.: Will you also carry out projects in Spain?
C.B.: It is not contemplated in the first years. The idea is to consolidate our presence and get stronger in the countries where we operate. When that is well underway and the business model has reached its cruising speed, we hope to enter the Spanish market.
M.I.A.: What are your plans for this new office? How many people do you wish to hire and how many have come from Brazil?
C.B .: There is a mix. People come from Brazil, some of them highly qualified executives, and we have many open positions. There is a global CEO for PROPAV Infraestructuras. We are forming a multidisciplinary and multicultural team for the entire group that will act from Spain, supporting and coordinating the group’s companies. I myself joined the group in March of this year. Now there are 20 of us, but we have rented a 1,300 square meter plant so that we will be able to employ up to 50 or 60 people.
M.I.A.: What types of workers are you looking for?
C. B.: All types. We will hire interns, engineers, sustainability and corporate compliance experts, lawyers, financial structuring professionals, institutional relations managers, etc. 25% of the staff are already in the company; the other 75% will be professionals hired in Spain.
M.I.A.: Is it easy to find workers?
C. B.: Spain has highly qualified professionals. This facilitates the establishment process. So far, we have not had any difficulties.
M.I.A.: What are your first impressions of Madrid?
C.B.: So far everything is going very well. We already knew many of the suppliers, the banks that are supporting us… We were very well received by all the authorities when we presented our investment plan in Spain. It was considered of national strategic interest.
M.I.A.: Of the attributes that you have mentioned about Madrid, which one should the City Council highlight in order to attract more companies?
C. B.: For us, knowing which are the strategic companies and sectors and identifying suppliers is one of the most difficult parts. This is the core of the business. We manage a chain of between 100 and 200 companies in an infrastructure contract. Through PROPAV, these companies go to the countries in which we operate. In turn, many companies do not know PROPAV. And there is some concern about going to emerging markets, which they are not familiar with.
It is important to raise a company’s profile nationally and connect it with stakeholders. This is something that the City Council could do and which would also make it easier for other companies to access new opportunities.
M.I.A.: What contact have you had with the administrations since you arrived?
C.B.: We contacted ICEX – Invest in Spain in Brazil. We presented our group internationalization plan, with the idea of investing in Madrid, at the Spanish consulate in Sao Paulo. ICEX supported us with the coordination and requirements to establish ourselves, helping is to bring highly qualified professionals, obtaining visas and issuing strategic investment documents in Spain.
The Ministry of Industry and ICEX have supported us. In addition, we began to contact key agents like government authorities, the Secretary of State for Commerce, etc. In the end, they play a very important role in the internationalization of companies. Everything worked very well and we continue to count on their support.
M.I.A .: And are you in touch with the City Council?
C. B.: Yes, our department of institutional relations has been in touch with them. We go little by little. Now we are beginning to enter the business communities: the Brazilian Chamber of Commerce in Spain, the Exporters Club, the Madrid World Construction Capital Association. We believe that from next year we will be fully integrated.
M.I.A.: How else could they help you?
C. B.: In identifying and connecting with the institutions that are important in Spain. We study the area and the associations, but in the end, we can’t get to know all of them. And this is important for company’s implantation in Spain and the internationalization of the group.
M.I.A.: What is Madrid’s construction sector like?
C.B.: The good thing about Madrid is that many of the world’s leading construction, engineering and architectural firms have their headquarters here. It’s at the cutting edge of global engineering. There is a non-formal club and the idea that complete solutions can be found in Madrid. This is what makes it a very lively city, a global hub.