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Alonso Quintana

MEXICO - Real Estate & Construction

Building Connections

CEO, ICA

Bio

Alonso Quintana is CEO, Head of the Executive Committee, and a Member of the Board of Empresas ICA, S.A.B. de C.V., Mexico’s largest construction and infrastructure operations company. From 2007 to June 2011, he was ICA’s CFO, where he secured the financing for the most rapid growth in ICA’s history. He originally joined ICA in 1994, and is a civil engineering graduate of the Universidad Iberoamericana, and has an MBA from the Kellogg School of Management at Northwestern University.

ICA recently stated that annual infrastructure spending in Mexico may rise over 50% to $70 billion in the coming years. What changes do you expect to see in the short […]

ICA recently stated that annual infrastructure spending in Mexico may rise over 50% to $70 billion in the coming years. What changes do you expect to see in the short term?

There are a few changes at the national level that will positively impact the sector, including the public-private-partnership (PPP) law, which creates a more efficient framework for private investment in infrastructure projects and a potential new reform in the energy sector that could also incentivize foreigners to come to Mexico for investment in this sector. In that respect, there are many opportunities for infrastructure development, including in the energy sector. It is for those reasons also that I believe infrastructure investments may increase up to $70 billion.

In your opinion, how important will PPP activities be to Mexico’s infrastructure growth?

PPP investments will be key. There is a lot of investment capital out there, as well as plenty of players that understand the business perfectly, and they are willing to put their money to work in Mexico. It is just a matter of setting the rules. With Mexico’s demographics, the need for infrastructure, and the country’s competitive environment, PPPs will play a key role. In this regard, I believe we are headed in the right direction.

In 2012, investors showed an increased confidence in ICA and your stock price went up by 43%. What factors contributed to this?

The key for us has been to be more transparent with the financial markets. We have been able to change our approach to our investors, making management more accessible. The last seven years have been the most intense investment phase since the company was established 65 years ago. We have been investing heavily in roads, airports, water projects, and other infrastructure. Overall, I would say that investors better understand our long-term strategy, and they feel much more comfortable in this environment. In addition, we have strengthened our value drivers over the past six months. For example, investors didn’t think that our housing unit was profitable as a stand-alone, and we recently partnered with one of the most important housing developers in Mexico, acquiring 23% of its shares. For ICA, the key elements in our strategy are efficiently deploying our technical capacities, transparency, and generating shareholder value, and these elements positively impact on investor trust and confidence.

“The key for us has been to be more transparent with the financial markets.”

What was the strategy behind selling most of your affordable housing assets?

ICA sold most of its affordable housing developments and land reserves in exchange for 23% of the shares of a new company that has a clear track record and is likely to go public in the coming years. This business strategy clearly made sense because we didn’t have a large enough market presence on our own in the Mexican housing market. We are happy about how everything turned out, because the new company is regarded as one of the most successful enterprises in the industry.

You recently bought a 51% stake in a Peruvian mining services company. What does this say about the company’s interest in joint ventures in Latin America? What opportunities do you foresee for the company in the mining sector?

We are a company focused on providing infrastructure solutions and our services are exportable. We have a clear international expansion strategy. We are very active in Panama; we have started operations in Colombia and Costa Rica; and we have been in Peru for a while now focused mainly on the home-building segment. We aim to increase our participation in providing construction services for mining projects abroad, because that is a natural extension of our company’s skill set to a new sector. Construction services for the mining industry holds important growth potential for our company at the regional level. Overall, we expect to expand our international profile in the coming years, and we are already targeting countries such as the US, where we have already developed some projects. It is all part of a larger phase within the company, which aims to diversify the scope of ICA’s activities.

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