Fluor Executive Heads to Kuwait on Business Trip : Trade mission: The Irvine construction and engineering giant will be in the first U.S. contingent seeking contracts in the war-ravaged emirate.
As part of the first U.S. trade mission to Kuwait since the Gulf War, Fluor Corp. is dispatching a top official to Kuwait to help the giant engineering and construction company lobby for contracts to rebuild the war-torn country.
Gerald M. Glenn, president of the Fluor Daniel Group, will join a contingent of government officials and business executives led by Commerce Secretary Robert A. Mosbacher, Fluor Chairman Les McCraw said Tuesday at the company’s annual shareholders meeting. The group is scheduled to depart from Washington this evening and return Sunday.
McCraw emphasized that Fluor has no contracts with Kuwait yet, although in recent weeks the price of Fluor’s stock has risen on the strength of analysts’ speculation that the company will get substantial business because of its expertise in building and designing oil facilities and its long history of work in the Middle East.
Analysts have estimated the total cost of rebuilding Kuwait at between $40 billion and $100 billion.
McCraw told shareholders that Fluor is optimistic about its opportunities in Kuwait but there is no assurance that the company will get a piece of the work.
He referred to Glenn’s trip as evidence of the seriousness of the company’s efforts. “Mr. Glenn is going to be there. He will be right there on the ground evaluating and meeting with Kuwaitis,” McCraw said at a press conference after the shareholders meeting. He added that Fluor has provided Kuwaiti officials with a five-page outline of the kind of work that Fluor is seeking: primarily the restoration of oil and gas production facilities.
He said Fluor will be careful to balance any work it gets in Kuwait in order not to undermine an existing multibillion-dollar contract to build oil and gas facilities in neighboring Saudi Arabia.
McCraw said he is not sure if other engineering and construction firms will be part of the group participating in what is being called “the Freedom Flight to Kuwait.” Among those making the trip will be Rep. Christopher Cox (R-Newport Beach), who is working to help Orange County businesses gain work in Kuwait.
Gary Foster, a Commerce Department spokesman, said the trip was arranged by Kuwait’s ambassador to the United States.
In an upbeat presentation, McCraw told shareholders that Fluor is cashing in on the rebound in the oil and gas industry, the company’s traditional area of expertise. Fluor’s earnings rose 35% to $146.9 million in its 1990 fiscal year, while its revenue increased to $7.5 billion from $6.3 billion.
Vincent L. Kontny, president and chief operating officer, told reporters that while Kuwait provides “substantial opportunities,” Fluor also has a chance to expand its role in building and modernizing refineries and other hydrocarbon facilities in North America, South America, Asia and Europe. “We will look where we get best shareholder value,” he said, “and it is certainly not limited to Kuwait.”
Calling the 1990s “the decade of the environment,” McCraw said Fluor is also prepared to help industrial companies meet stricter regulations for air quality and toxic waste cleanup.
McCraw said Fluor’s environmental services division has been enlarged in the last year to handle expanded business. Fluor has about a $500-million backlog of environmental-related work, which McCraw said is about double last year’s figure. The company expects that business to double again in another year.
With a cash and bond portfolio of nearly $500 million, Fluor is in a position to acquire other companies “that will enhance our engineering and construction capability,” McCraw said.
He also promised efforts to cut costs at the Doe Run Co., Fluor’s lead mining concern that is suffering from a downswing in lead prices.
