Swedish construction giant Skanska is pulling out of Russia to focus on more profitable markets in Europe and in the Americas. Skaska has been in Russia since 1902, but the Russian market only accounts for half a percent of the company's revenues.
Swedish construction giant Skanska is pulling out of Russia to focus on more profitable markets in Europe and in the Americas. Skaska has been in Russia since 1902, but the Russian market only accounts for half a percent of the company's revenues.
Company spokesman Peter Grimbe said one of the many reasons for quitting Russia was the difficulty of finding enough clients willing to pay for the high business ethics, safety and environmental standards employed by Skanska in its operations. Following a decision in 2003 to focus on growth markets where Skanska has a strong presence, the company has already left Latvia, Lithuania, India and China. 'Russia is the last step in this process,' Grimbe said.
Last week Skanska ceo Stuart Graham told a presentation for the Q4 2006 results that Denmark, which represents 3% of the company's earnings, had dragged down the results by EUR 38 mln. Management changes in recent years had helped to address some of the unique problems in Denmark, he said. In addition, Skanska has decided not to bid from now on for third party commercial and residential construction projects in Denmark as these activities had proved loss-making. The rest of the Danish business is largely profitable, Graham said. The construction units in Sweden, Norway, UK, Poland and Latin America had all surpassed their targets.
Underscoring the company's strategy to focus on markets where it is a major player and to shun underperforming markets like Russia, Grimbe cited a Swedish proverb which states: 'you don't need to cross the river to get a drink'.