Fernando Alonso (Isastur): “The damage caused by the pandemic will still last for a long time”

The stoppage of the works and the delays in the awards will affect Grupo Isastur this year and next, a company that has become an international exponent in the engineering and electrical assemblies sector.

Isastur came from record hiring figures in 2019. I understand that the pandemic has stopped them in their tracks.

The pandemic has done us significant damage that will still last for a while. In 2019 we reached our record hiring figure: 205 million euros. And yet we are going to finish this year at 120 million hiring. A spectacular descent.

What are the reasons?

On the one hand, the stoppage of the works in progress, between March and June of last year, ordered by the clients or the authorities. That had an effect on us similar to that of the hospitality industry. You have to stop, you have no income and you continue to have expenses. And, on the other hand, clients delayed decision-making in the works award processes.

That’s what makes the damage spread over time …

Yes. We measure the average maturity period of the offers. Before March 2020, the time to make the award decision was seven months, and after March it shot up to fourteen months. 2021 is a year in which we are short of production and 2022 is not going to be a very good year, precisely as a consequence of the delay in the adjudication processes. And then there is an even more important third factor.

Which?

The main interest in some projects was to meet the deadlines set before the pandemic. And it has been necessary to bear extra costs to try to meet those deadlines in a situation in which, sometimes, you could not enter the countries or you found that a supplier went bankrupt and you had to find another, with enormous extra costs. That will also lead us to discussions with clients that will take years and that, in some cases, can end up in court.

Was the industry sufficiently helped?

A significant effort was made by the Spanish and European authorities. The ERTEs helped a lot and the direct aid for the cash flow problems of the companies as well. The grants were well thought out, although, in my opinion, they would have been much more effective if they had been managed faster. But you can’t ask for miracles either. It is very good to criticize from the outside, but managing these problems is very difficult.

And indirectly, the European recovery funds will favor companies like Isastur …

The funds are intended to help make investments. We are not investors; what we do is build the investments that others make. In other words, we build infrastructures, mainly electrical and highly focused on renewables, but the direct recipient of the aid is the investor, Isastur’s client. From that point of view, we see it very interesting because there is going to be work. Renewable energy is one of the axes on which European aid will focus. And Isastur is very interested in learning about the technologies in which, like green hydrogen, there will be development.

The future lies in green hydrogen …

I think so. I see green hydrogen as an obvious utility as energy storage. It is an almost magical way of storing energy from the sun, thereby producing electrical energy from a virtually inexhaustible source. And it is also a possible substitute for fuel in cars. For Spain and for Spanish companies it is of interest to be well positioned in technology to offer the construction of plants for the production and use of green hydrogen for those who need them.

Isastur already accumulates a great experience in renewable energies.

There are two figures that I think illustrate very well our positioning in this field. We have participated in the construction of more than 2,200 megawatts of wind power generation and 3,100 megawatts of photovoltaic generation.

They have clients in energy, water, automotive, mining, naval, petrochemical, and steel industries. They do not diversify their activity, but they do diversify the client portfolio.

That’s it. We work for steel companies, but we are not a steel company. We do not make a cement plant, we do the electrical assembly of a cement plant. We are not investors in these sectors but we work for companies in these sectors.

The international expansion of the group comes from the hand of Isotron, a company dedicated to electrical assemblies.

We began to see that what we knew how to do in Spain we could replicate abroad, and it was in 2007 when the opportunity to incorporate Isotron arose, which was a company that did the same thing as us, but had a strong presence abroad: Chile, Argentina, Venezuela, Morocco. We think: “this is what we need.” We acquired Isotron from Babcock Montajes, which was a SEPI company, and the following year we bought Babcock. This facilitated our international expansion.

You have projects in 28 countries. Where is Isastur’s international positioning heading?

Industrial customers cannot be served from outside their country. This type of business works when you are positioned in a country. We really have implantation in Spain, Chile and something in the Maghreb. And, then, we aspire to be in Mexico with a similar implantation. We believe that in Mexico there is an important potential in renewables. We currently have a lot of work in that area.

What kind of jobs?

What we are doing in Mexico are photovoltaic plants. In Chile we tend to work more in substations. And in El Salvador we have already built a wind farm and thirteen solar plants, and we are beginning the construction of two other new solar parks.

Any particularly powerful work in Europe?

At Keadby in the UK, for example, we are completing the mechanical assembly of the largest recovery boiler installed to date in the world. It has been a challenge for the company not only because of its volume but also because of the difficulties that the covid and Brexit have brought with them.

And beyond Latin America and Europe, any geographical area in which you aspire to grow?

As a distant horizon, we are interested in Africa. We think that in sub-Saharan Africa there is going to be a lot of development.

In what kinds of developments does Africa have potential?

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There, in the future, there will be great development in the world of water and in the world of energy. In my opinion, these are two areas in which there will be huge investments in the coming years. In the case of water, with population growth and migration flows to cities, treatment plants, water purification plants, etc. will be needed. There is still time, but it is something in which a lot of money is going to be allocated, and we are interested in positioning ourselves better. And there will also be strong investments in energy, where we are very well positioned.