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06 out 2022

Interview of Eng. Miguel Rodrigues with Jornal de Negócios

Interview of Eng
Interview of Eng
Interview of Eng
  1. What is your assessment of the activities of CJR Renewables in 2021 and 2022, taking into account the contexts of the pandemic and the war in Ukraine? What were the main business impacts?

2021 was, to say the least, a challenging year for a company that develops almost 90% of its turnover abroad. On the one hand, new records were set in the world production of renewable energies and, on the other hand, we witnessed numerous constraints throughout the supply chain, which caused record prices for raw materials. 2022 continued the trend and, as we all know, the world is today facing an unprecedented energy crisis, stemming from the Ukraine conflict. In many countries, local governments are already minimizing the shock wave caused by this crisis and, of course, proposing an acceleration of the energy transition to clean energies.

In the specific sphere of CJR Renewables, we are naturally not immune to inflation, lack of manpower, raw materials or logistical challenges, which have a direct impact on the company's income, while at the same time causing enormous instability in the pricing variable.

 

Given its international presence, what are CJR Renewables' prospects for 2023, in terms of risks, opportunities and challenges such as inflation, interest rates, etc.?

We have been active - mainly in Europe and Latin America - and we are now entering the United States. Today, the scenarios are increasingly uncertain. As of today, in the countries where we operate, inflation is around 8% and 13%, that is, we are dealing with “currencies” with less power, higher prices and misaligned market expectations, even though interest rates are higher and we are facing more government subsidies. For a company that has a growth strategy through market diversification, as is our case, monitoring these risks is essential for the sustainability of the business model. I can assure you that we find the various inflationary trends particularly alarming, and we are closely monitoring the way indices of energy prices, raw materials and construction costs are developing. For 2023, CJR Renewables has a pipeline of projects already assured; however, the consequences of such sharp increases could cause mismatches, especially in estimated values.

 

  1. CJR builds wind farms, solar parks, installs wind turbines, power & grid and maintains solar parks. What are the main businesses and what is the weight of each in the CJR Renewables portfolio?

The construction of wind farms was a pioneer; therefore, it is natural that this is still the area that reaches the greatest projection. CJR Renewables executes the construction of large-scale parks in a turnkey model. This is one of our competitive advantages - we offer a service with the integration of all aspects, organized by business units (BU). The weight of each BU, in terms of its importance, is quite similar to each other. We can instead make the parallelism for the photovoltaic solar activity area, where the company also offers a complete EPC and Service solution, the latter being the most recent area in the company. This area has also achieved a very sustained strategic and operational performance, although we have not yet reached the market share that we have in wind energy. However, I would say that we are on a very good path. As an example, looking only at Portugal, in this area, CJR Renewables is building five solar projects, on a utility-scale basis, and already has two projects for the Service business area.

 

  1. What are the advantages and differences of EPC (Engineering, Procurement and Construction), Balance of Plant (BoP) and Balance of System (BoS) solutions?

These are, above all, differences in the scope of contracted work. An EPC service involves more contractual responsibility, whether from the point of view of engineering, purchases of equipment (or others) and construction, while an exclusive BoP contract (related to the wind farm) and BoS contract (related to the solar park) restricts that responsibility. As we work in all phases of project implementation, we easily integrate and adjust our service to the desired scope of the client. We differentiate ourselves from the competition by adopting various strategic and process management methodologies that promote efficiency and effectiveness in any project, regardless of geography. Therefore, we offer, above all, quality assurance, compliance with the schedule and experience. We have a highly qualified and specialized team that spares no effort, constant innovation and optimization.  

 

  1. How did you build these skills and knowledge and how are you organized to respond to these projects?

From an operational point of view, we have been in business for twenty years and, if we look at the CJR Group, then we speak of more than 50 years of experience in construction. What distinguishes us, in addition to the knowledge and experience we have accumulated, is to add value in a sustained way while we integrate, on a daily basis, organizational methods and tools in our teams, which enhance robust and repeatable processes and procedures on a worldwide scale. In my view, CJR Renewables is quite successful in its performance because it has its key success factors well consolidated and, at the same time, flexible, which may seem counter-intuitive, but applied, it is not. This is what has allowed the organization to grow. From the point of view of internationalization, CJR Renewables, when entering a new country, has a prior concern to study the legal and institutional characteristics of the country, always seeking support from local consulting and market research companies. Thus, it can understand the potential of its service's integration in the market, and the variables that can condition the company's success in it.

 

  1. Having started two decades ago, you are present in almost three dozen countries. How did this internationalization of services take place and what are the main markets?

CJR Renewables, from an early age, was aware that only internationalization would give it the possibility to respond to its ambition. Naturally, it had essential variables for internationalization to be a success: from financial strength to the necessary size, while at the same time it had numerous resources and experience from the parent company (CJR, SA). In this context, the company is almost a born global, given that it operated exclusively in Portugal in its first three years of life. In 2005, it carried out its first cross-border project, in the Dominican Republic. A few years later, with more portfolio and international experience, it opens its first branches in Poland and Romania. After that, a series of countries followed, at an average of 2 countries per year. More recently, in 2021, the company opened offices in the US, due to the potential of the market, where it envisions the possibility of also operating in a scale economy. So, for now, Europe and Latin America are the two key geographies. For the future, we anticipate that the accumulated know-how and experience of CJR Renewables will have room to add value and boost experience in new markets.  

 

  1. What were the most complicated or challenging projects during this time?

In twenty years, there are more than 500 projects, which makes it difficult to focus on one or another difficult circumstance, not least because what in 2002 was a giant challenge, today is not important to be the subject of a meeting. The challenges are observed to the extent of our knowledge and experience. However, we do have some icons that we register as important milestones in our history and that we celebrate as important achievements. For example, in 2013, the construction of our first project in Chile and which, at the same time, was the largest wind farm in the country (located in the Atacama Desert). In 2015, the construction of the longest underground high voltage line in Poland, with about 38 km in length, which required the cooperation of numerous public entities, owners, etc. In 2017, we used helicopters in our construction system for the first time. We had nine helicopters a day to run power transmission towers in a very mountainous area in the Atacama Desert in Chile. In 2020, we started the largest wind farm in Colombia, where we had to interact with more than 45 different communities to reach agreements and, today, it continues successfully. These are challenges that start with more or less complexity; but in the end, above all, the feeling of accomplishment remains.

 

CJR Group

  1. What is the impact and weight of CJR Renewables on the CJR Group?

CJR Renewables represents around 75% of the CJR Group's turnover.

 

  1. How important are activities for road and infrastructure construction and industrial and commercial construction? What are the main challenges?

CJR S.A., the company that manages these areas of activity of the CJR Group, created the CJR Group; therefore, its importance is total. It is the genesis and today it has more than 52 years of activity. It is fantastic to observe that the company maintains its core activity but, at the same time, was able to innovate, diversify its areas of activity and expand geographies. Today, CJR S.A. assumes itself as an increasingly competitive player in the national territory and has reinforced its position in civil construction and public works. The main challenges do not differ from CJR Renewables, because, in essence, both continually aim for greater capacity and greater competitiveness (and external circumstances are not controllable by any company). However, we can note that, at CJR S.A., 2022 will be marked by the continuous improvement of its processes, large investments, in a path increasingly focused on clients and on the maintenance of innovation, with the purpose of preserving sustainable agility.

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