Guzzi Helps EMCOR Continue to Grow

December 24, 2007
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Tony Guzzi

EMCOR Group Inc. has continued its strong growth and performance as the largest mechanical and electrical construction, energy infrastructure, and facilities services company in the world. And after spending a few minutes with president and chief operating officer of EMCOR, newsmaker Tony Guzzi, it’s easy to see why the company is an example of orderly consolidation and growth.

The secret to its success? Guzzi has a pretty good idea.

“EMCOR is the result of a failed consolidation of JWP [Jamaica Water & Power, a New York utility company that pioneered the consolidation wave]. I think the team that was brought in never forgot those lessons.

“EMCOR works as an operating company. We’ve never been about the financial side of the business. We are field-focused. We let people do their jobs. We put accountability and decision making as close to the action as possible. We really do best-practice sharing by getting companies together that have similarities. For example, every time we build another 10 hospitals or so, we then glean the latest best practices and share them,” Guzzi said.

“Also, a lot of companies have plans to buy another company at X and sell that company at Y. We have no such end game. Our only goal is to continue to grow our organization.”

One of the biggest accomplishments for EMCOR in 2007 was the acquisition of Ohmstede for approximately $455 million. Located in Beaumont, Texas, Ohmstede is the leading provider of aftermarket maintenance and repair services, replacement parts, and fabrication services for highly engineered shell and tube heat exchangers for the refinery and petrochemical industries. Ohmstede provides its clients with a unique single point of responsibility solution that encompasses a score of products and services in the industry.

“That was a historic acquisition,” Guzzi said. “They are the leading heat exchanger services provider in the Gulf Coast. It opens the refinery services market to EMCOR.

“Overall, we are doing very well today. Our mechanical operations have gone from very troubled in 2003 to very high performing. EMCOR has gone from doing $4.5 billion of total revenues in 2003 to doing $5.7 billion in 2007,” Guzzi said.

And Guzzi sees more opportunity for EMCOR in the future. “Well-capitalized building services and construction contractors are going to be in greater demand because of the complexity of projects in the future. I think there are several underlying trends that are very significant ones and that are here to stay for our foreseeable future.”

First, “Green has become a business. A few years ago we could afford to take a wait-and-see attitude, as most companies did, to see how the green movement developed. Now, because the type of work EMCOR does on a daily basis addresses roughly 75 percent of the LEED points, we have the opportunity and need to be adept at green techniques,” Guzzi said.

Second, “A trend that is affecting construction and society is the aging of our population. We’re getting older, and we demand more sophisticated diagnostic care and treatment. Many health care buildings are not optimized to handle the required environmental systems,” Guzzi said. “Some hospitals are actually being abandoned instead of being retrofitted with the newest systems because the cost of upgrading the facilities’ infrastructure capabilities is simply too much. This bodes well for continued growth in the health care construction market.”

Third, “The threat of terrorism and the resulting security requirements are a part of our lives. Building controls solutions are an important part of the solution, as complete building shutdown and containment of air systems takes on greater importance.”

These major issues will continue to guide the decisions within society, and therefore the building services and construction industry.

- Kyle Gargaro

The Facts:

Name: Tony Guzzi

Title: President and Chief Operating Officer

Company: EMCOR

Location: Norwalk, Conn.

Notable Quote: “A trend that is affecting construction and society is the aging of our population. We’re getting older, and we demand more sophisticated diagnostic care and treatment.”

Publication date: 12/24/2007

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