Greek Building Sector: Grows Overseas
Greek construction and building materials companies continue to grow overseas, part of a successful, medium-term strategy the industry has adopted to diversify into new markets abroad. After experiencing a sharp downturn with the onset of the Greek crisis in 2009, Greek building and materials companies turned to foreign markets around the world, winning contracts from the Middle East to Africa to Europe and Latin America.
In the past five years, leading Greek construction groups have cemented their positions in the highly-competitive international construction market. Greek firms like Ellaktor, J&P Avax and GEK Terna now boast activities in more than two dozen countries and are involved in a wide range of public and private building projects. Most recently, in November, the three companies bid for a €128 million tunnel project in Bulgaria, while Terna completed work on a 250,000 sqm commercial project in the United Arab Emirates.
But Greece’s construction sector has also seen many small- and medium-sized companies – from marble vendors to solar systems engineers to lighting companies – also expanding into overseas markets. Greek materials producers have followed: aluminum exports – one of Greece’s key building products – have grown by more than a fifth in the past two years and are projected to reach €1.5 billion in 2017.
Many have tapped into the booming construction markets of the Persian Gulf region. At last month’s The Big 5 2017 Dubai construction trade fair, 38 leading Greek companies participated. The fair – one the world’s most important exhibitions of building materials and construction – drew more than 80,000 visitors and 3,100 construction related exhibitors from sixty-four countries. The Greek delegation was the third largest from the European Union.
In the peak years before the Greek crisis, Greece’s construction industry contributed as much as €22.5 billion to the economy - representing about 11% of GDP - before collapsing to roughly a third of that five years later. But with an orientation on export markets, the sector has managed to recover and recently has seen strong interest from prospective business partners in Saudi Arabia, Iran, India, Sub-Saharan Africa and North Africa, say industry experts.
Focus on energy
Greece and three of its regional neighbors are backing a 2,000 kilometer pipeline project that would transport gas from the eastern Mediterranean and further strengthen the country’s role as an energy hub for Southeast Europe. The East Med pipeline envisions bringing newly discovered gas from the southeast corner of the Mediterranean to markets in Europe.
In early December, the Greek government – along with the governments of Cyprus, Israel and Italy – signed a memorandum pledging their political commitment to the project. Combined with other energy projects and investment prospects, like the €4.5 billion Trans Adriatic Pipeline now being built in northern Greece; mooted offshore oil & gas reserves south and west of the country; a future gas storage facility in the north; and the privatization of the national gas distributor, Greece is emerging as a regional energy hub.
The country is also privatizing the lignite power plants of one-time state monopoly Public Power Corp (PPC) early next year and some 40 companies from around the world have been invited to participate. According to the Institute of Energy for South East Europe, Greece is among the countries in the region moving fastest to attract investment. In its 2016-17 South East Europe Energy Outlook, the Ιnstitute says that Greece could see between €23.3 billion and €30.2 billion invested in its energy infrastructure by 2025.
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