Home > International Directory of Company Histories > Abengoa S.A. - Restructuring in the 1990s

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Restructuring in the 1990s

Under its new chairman and son of the company's founder, Felipe Benjumea Llorente, Abengoa launched a restructuring of its operations in 1992. As part of this effort, which required four years to complete, the company cut back its workforce by 14 percent; it also boosted its use of temporary workers by some 50 percent during this period.

The group's restructuring effort, however, went further than a mere streamlining. The company adopted a policy of seeking out partnerships, especially in its Latin American market, which enabled it to achieve strong international growth during the 1990s. Back at home, Abengoa made an effort to expand its customer base beyond its reliance on the public sector, successfully reducing the part of public works projects to just 12 percent of its sales.

In 1992, the company adopted an entirely new strategy, one focused on diversifying the company's operations beyond its reliance on the construction and engineering markets. The company developed four key areas of interest, creating four new divisions: Energy; Environmental and Urban Systems; Control Systems and Telecoms, led by Sainco; and Installation. The underlying strategy to develop fully integrated operations, including not only the engineering, manufacturing, and installation, but also sales, financing, maintenance, and even plant management services.

In 1995, Abengoa launched its entry into the Environmental and Urban Systems sector with the acquisition of a stake in Befesa, via one of its subsidiaries. Befesa had been established just two years earlier when a number of Spanish companies, led by BUS and including Metall Capital, Duro Felguera, and Indumetal, merged their environmental systems businesses, including industrial waste management and recycling operations, into a single entity, which was then listed on the Bolsa de Madrid. In 1999, Abengoa acquired its first direct shareholding in Befesa, buying up 7.44 percent of the company. By 2000, Abengoa had bought out BUS's 50.01 percent holding in Befesa, and by the end of that year, Abengoa had increased its position to nearly 83 percent, at a total investment of EUR 300 million ($250 million). The following year, Abengoa transferred its existing environmental businesses into Befesa.

1. Introduction
2. Construction Business in the 1940s
3. Restructuring in the 1990s
4. Diversified Success in the 2000s
5. Principal Subsidiaries
6. Principal Competitors
7. Further Reading
8. Copyright Page
9. About Page