Difficult investment decisions during the recession can drive post-recession growth

You won’t find too many people saying that life is easy as we emerge from the worst recession in living memory – but the truth is, we’re seeing more opportunities than threats at the moment.

At FM Conway we took some very difficult decisions at the height of the recession.We invested in infrastructure that would allow us to ‘self-deliver’ materials to our highways projects across London.

In 2008 we bought the site that would become our Erith asphalt plant; a £10M state-of-the-art facility that manufactures highways materials predominantly from recycled road planings. This investment was repeated in 2013, when we developed a second asphalt plant near Heathrow Airport, also at a cost of £10M.

With other businesses in our sector battening down the hatches and withdrawing from any major capital expenditure, these sizeable infrastructure investments were undoubtedly seen as risky by our peers.

"Protecting against volatile materials prices is the other major benefit of the investments we’ve made. This all goes into making us a more commercially competitive and financially robust business; something clients see as vital in an uncertain post-recession world."

However we had confidence that the efficiencies and environmental benefits of our self-delivery model would allow us to take advantage of new opportunities once the economy began to recover – and this approach has certainly been vindicated. Our turnover has leapt from £98.3M in 2008 to around £180M today, despite these being some of the economy’s worst years in modern history.

We are now competing for – and winning – the biggest and most sought-after contracts in the industry, which we’re able to do because of the cost efficiency and security of supply that having our own manufacturing plants guarantee. Earlier this year we won an eight-year, £450M highways contract with Westminster City Council; a success due in part to our ability to unlock efficiency savings and drive material recycling on behalf of the council.

Protecting against volatile materials prices is the other major benefit of the investments we’ve made. The two asphalt plants, coupled with our new bitumen import terminal at Imperial Wharf in Gravesend, mean that we are minimising and controlling the raw materials we use, therefore reducing our exposure to external market conditions. This all goes into making us a more commercially competitive and financially robust business; something clients see as vital in an uncertain post-recession world.

Of course, we’re still facing challenging times; not least of which is a collective skills deficit across our industry. Ensuring we have the right skills set within the sector and bringing fresh talent to the table needs to be top of everyone’s agenda. The work we are doing to support the London Highways Academy for Excellence (www.lhae.co.uk) is a good start, but there is always more to do – and this is certainly remains one of our key priorities as we approach 2015.

Michael Conway is chief executive of infrastructure contractor FM Conway (www.fmconway.co.uk)