Fluor Seeking a Long-Term Presence in Iraq

Engineering and construction giant Fluor Corp. said Sunday that it was looking to increase activity in China, Russia and Poland as well as Iraq despite security concerns in the latter that led it to turn down projects recently.

John Hopkins, Fluor’s group executive, said the company was shifting its strategy from doing projects in various countries and then leaving to trying to gain a foothold in those areas.

“We want to go in and stay in,” Hopkins said in an interview at the World Economic Forum in Jordan. “It is imperative we become as local as possible by hiring local management and having a local partner.”

Aliso Viejo-based Fluor posted revenue of nearly $9 billion in 2003, and Hopkins said 2004 should be another “favorable” year that should see more new contracts in helping to rebuild Iraq.

Fluor said last month that it expected earnings per share of $2.10 to $2.40 in 2004 with a backlog of orders of $11.9 billion at the end of the first quarter and new contracts growing.

“Our vision is that we would like to maintain a presence in Iraq,” Hopkins said Sunday, adding that Fluor already has hired and trained about 4,000 Iraqis for its numerous projects, which include building a power grid in Baghdad and two water projects.

Still, he said the company had turned down some projects because of security concerns. “It’s not an easy environment, and we would like to see it stabilize,” Hopkins said.

He noted that with the exception of power -- the company’s smallest segment -- all other sectors were growing, especially the government and life sciences businesses, mostly in the United States, Britain and Western Europe.

Oil and gas contracts in Qatar, Saudi Arabia and Kuwait also remain strong, he said, and the company is looking into more opportunities for wind power and water desalination projects.

“We are in a cyclical business, and what we try to do is shorten the cycles,” Hopkins said. “We have seen growth in government work, infrastructure work -- building high-speed rails and toll roads -- and these projects assist in taking out the valleys in other areas.

“We are recession resistant,” he said. “Asia slowed in the late 1990s but the U.S. and Canada increased.”

Most of its government work is in nuclear decommissioning and in embassies and consulates.

Hopkins added, however, that it could be some time before Fluor returned to the days of $12 billion in annual revenue as the company has become more selective in choosing projects, reducing its exposure to what Hopkins called “train wrecks,” or problems during a project.

For now, Hopkins said, Fluor is content to grow organically but would not rule out buying small niche companies in China -- where Fluor has done projects since 1976 -- Russia or other emerging areas.

“There are still areas in the government arena where we can grow through acquisitions and also in infrastructure,” he said.

He said any purchases probably would be made with the company’s cash, which amounted to $546 million at the end of the first quarter.