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BBGE forecasts smaller but sustained growth over next two years

Rapid gains seen in the geotechnics market in 2013 are unlikely to be repeated this year, according to BBGE managing director Malcolm O’Sullivan, but he expect the sector to continue growing for the next two years.

“I’m expecting the market this year to be a little better than 2013 and the same again in 2015,” he told GE. “The growth will be smaller than seen in 2013 but it will be sustainable, steady growth.”

O’Sullivan also reported that the quality of projects now being put out to tender are of a better quality than seen last year. “They are bigger schemes and more well-defined, so the risk associated with them is lower,” he said.

“Margins are also starting to increase but they are still on the tight side of acceptable. There is a surplus of resource in certain project types and areas and until this is taken up there won’t be a great change in the margins situation.”

According to O’Sullivan, the market needs to be cautious over the next two years. “It won’t be plain sailing,” he said. “The market will be more subdued than it was last year.”

Despite his concerns over the rate of growth, O’Sullivan confirmed that BBGE plans to build on its investment in a new Bauer BG30 piling rig last year with further investments in new equipment for the driven and rotary piling markets. “We are planning to invest £3M in new equipment and a further £700,000 in new tools this year,” he said.

O’Sullivan also reported that it is seeing rising demand for its precast pile products both from BBGE and external customers. According to O’Sullivan, improvements in efficiency and sustainability at the Bottesford and Balmore precast pile factories means that the business is well positioned to meet the rising demand and can also offer competitive pricing with sound environmental credentials. “We are working on reducing wastage in the production, transportation and installation processes,” he said.

Demand from the residential market for BBGE’s housing beam products is also increasing. “We have seen a marked increase in demand in the last six to eight months,” said O’Sullivan. “Last year that part of the business turned over £2M and this year we expect to sell £3M of products as a result of organic growth and gaining a greater market share.”

Although O’Sullivan expects growth across the business, he said that skills and recruitment remain a concern for his business and the industry as a whole.

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