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| Alexandros Ignatiadis |
Octagon will end 2014 with a 16 million euro
turnover, a decline on the turnover reported last year, according to the
estimates of Alexandros Ignatiadis, co- founder and shareholder of the company.
The anchor of Octagon during the crisis was the Iraqi market, he told us during
an interview, stressing that the company wants to consolidate its position in
this country, where it already has two ongoing projects. Alexandros Ignatiadis
believes that the Romanian construction market needs restructuring, as it
operates on 900 million euro annual losses and as in the past 20 years it has
been negatively affected by political instability. Mr. Ignatiadis told us that
the beginning of the year was characterized by effervescence in the private
real estate sector, but, after the end of the first semester, many projects
have slowed down.
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| Hermes Business Campus- building B |
Reporter: How did the
company’s activity evolve in the first year half and what is your forecast for
the second half of the year?
Alexandros
Ignatiadis:
The first half of the year evolved positively for Octagon. We finished the construction
of the first building within the office complex Hermes Business Campus, where
we were general contractor and we contracted new civil, geotechnical and
infrastructure works. The turnover for H1 of 2014- 6.6 million euro, is similar
to the one of H 1 2013, so the financial perspectives for 2014 are optimistic.
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| Green Court Bucharest- building B 1 |
Reporter: Will 2014 be a
better year than 2013 for Octagon?
Alexandros
Ignatiadis:
Even if it included number 13- that allegedly brings bad luck, 2013 was one of
the best years OCTAGON has had so
far. Two of our remarkable successes were the fact that we became general
contractor for Hermes Business Campus and also having delivered the first building
of the complex Green Court Bucharest, developed by Swedish real estate giant
Skanska. We ended the year with a 19.6 million euro turnover, and we estimate a
16 million euro turnover for 2014.
Reporter: How do you see
the short and medium term evolution of the construction
market?
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| Green Court Bucharest- building B 2 |
Alexandros
Ignatiadis: The construction market needs restructuring,
because something is fundamentally wrong in this industry. A 4 billion euro
market is operating on 900 million euro annual losses. It is an overcrowded
market, which has been negatively influenced by political instability in the
past 20 years. The short and medium term evolution will only be positive if
this regulation occurs and if the state grants fiscal incentives for the sector
consolidation. There is also a law draft initiated by the Romanian Association
of Construction Entrepreneurs (ARACO), to eliminate from the competition, the
companies set up overnight, that have access to public projects worth hundreds
of millions of euro. Another solution would be to merge several Romanian
companies in order to create companies with a superior financial power, able to
access tenders for very high value projects. The construction sector is still a
brake for economic growth, due to the fact that the political stabilization
process has not ended yet
Reporter: How have the
orders generated by public and private investments, evolved this year?
Alexandros
Ignatiadis: Due
to the fact that 2014 is an electoral year, most of the public funds have been
directed towards areas able to attract voters. The construction sector is not a
priority for the state this year, but we have been slightly affected, as we are
not involved in major public projects. The private sector is dynamic this year.
We participate in tenders for projects within all the segments of the
construction market.
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| PC Business Center- superstructure 1 |
Reporter: Consultants
say that the new real estate
developments market, including the residential sector, has started to perform
better this year. What is your perspective?
Alexandros
Ignatiadis:
The year started dynamically in the private sector and this gave new hopes, but
after the first semester many announced projects have slowed down.
Reporter: What will be
the engine of the construction market in the next period?
Alexandros
Ignatiadis: Inevitably,
after 4 years of stagnation, infrastructure will be the engine of the
construction market.
Reporter: What are the
short and medium term development plans of Octagon?
Alexandros
Ignatiadis: In
a stagnating market, our priority is the consolidation of the economic position
and keeping the existing clients.
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| PC Business Center- superstructure 2 |
Reporter: How would you
evaluate the tax level in our country?
Alexandros
Ignatiadis: The
tax level is acceptable against other EU member states, but the number of taxes
must be reduced and wage inflexibility must also relax.
Reporter: What are your
most important ongoing projects?
Alexandros
Ignatiadis: We have ongoing projects in Romania and in Iraq. In Romania we are working on two office buildings and five infrastructure projects. We are working
on building B of the Green Court Bucharest office complex, located on Herastrau
St.- Bucharest, after having delivered building A, at the beginning of the
year. The complex will have three office buildings in total.
A project started last autumn, on which we are
currently working, is the office building PC Business Center, located on 7-9 A
Bucharest- Ploiesti Road. We initially performed the special foundation and infrastructure
works and we are now building the superstructure.
In terms of infrastructure projects, last summer we
started the geotechnical works to “
Presei Libere Square Underground Passage” (Bucharest). We are also building
bored piles and metal sheet pile retention systems in Craiova on a passage over
the railway. Another project is the functional rehabilitation of Revolutiei
Square in Slobozia, where we are building sheet
pile retention systems and we are performing drilling for dewatering systems. We are also building bored piles for sections A, D and E,
sector 2- Lugoj- Deva Highway, for Salini Impregilo.
At the same time we are continuing the retention works with columns and sheet piles at the project “Rehabilitation of Brasov- Simeria
railway, Coslariu- Sighisoara section”, where FCC Construccion is the general
contractor.
In Iraq we have two projects: Electric Power Plant 1250 MW Shatt Al Basra in
Basra (Iraq) and the residential project Iraq Gate Residential, for Iraqi
developer Almco. In both projects we have been contracted for the execution of geotechnical works.
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| Shatt Al Basra Power Plant- Iraq |
Reporter: Many
construction companies, among which Octagon, have expended abroad as well.
Octagon is developing in Iraq. Is this a good solution for survival during the
crisis?
Alexandros
Ignatiadis:
Our anchor during the crisis has been the Iraqi market. We have decided to try
another market with long term growth perspectives and that has liquidities for
infrastructure projects. The security issues have been an addition advantage
for us, as they keep competition away. Right now we are building awareness and
we are waiting for the political system to stabilize. The fact that we have two
ongoing projects is a positive sign and comes as a confirmation of the fact
that we had good intuition when we decided to expand there.
Reporter: Do you plan to
expand in other countries as well? If yes, where exactly?
Alexandros
Ignatiadis: Right
now we are focusing on consolidating our activity in Iraq, but should the
opportunity of entering a market with high growth potential arise, we will
certainly take it.
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OCTAGON CONTRACTING & ENGINEERING
Phone: (+4)021.232.39.20
