Ask any Abengoa employee about the company’s mission and you will get a similar answer: the world needs solutions for sustainable development, and Abengoa works to provide these solutions through technology and innovation. This shared vision has filtered down to every level of the organisation, positioning the company as a leading international firm in the world of sustainability.
Abengoa’s origins date back to January 1941, when Javier Benjumea Puigcerver and José Manuel Abaurre Fernández-Pasalagua, two engineers from the Instituto Católico de Artes e Industrias (ICAI), founded the company in Seville. This date marks the start of an unstoppable process of growth, initially in Spain and then abroad, which led to sales of more than €300m by the end of the 1980s. But an important turning point in Abengoa’s strategy came in 1991. Guided by a clear vision of the future, the company began focusing its activities on development and innovation in the field of renewable energy, biofuels, information technology, recycling and water. This new focus marked a transition from its traditional engineering business to a range of high-tech and innovative products and services linked to sustainable development.
In 1996 Abengoa went public and since then has maintained double digit growth in revenues, Ebitda and net income. In January 2008 it entered the IBEX-35 selective index, consolidating its position as one of Spain’s largest multinationals – its revenue forecasts for 2010 will be close to €6bn. Seven decades after it was founded, Abengoa has transformed from a small engineering firm in Seville into a global company operating on five continents, with more than 27,000 employees, and positioned as an international leader in the field of sustainable development.
The Abengoa model is founded on proprietary technological developments. Its commitment to high-tech products is clearly associated with its significant investment in research, development and innovation (R&D+i).
With a team of 900 people focused on developing new technologies and accumulated investment of €500m, Abengoa has managed to establish itself as a global leader in developing concentrating solar power (CSP) and second generation biofuel technologies, while also researching future opportunities such as hydrogen. The company collaborates with research centres at the highest level, such as the National Renewable Energy Laboratory (NREL) in the USA or the German aerospace centre, DLR. According to the European Commission’s annual report, Abengoa is the seventh Spanish company in terms of investment in R&D+i.
Abengoa’s business model combines engineering and construction activities with asset-based operations. On the engineering and construction side, Abengoa has accumulated experience from more than 70 years of developing projects, mainly in the field of energy, which represents nearly 80 percent of the group’s total sales.
The growth forecasts for this activity – based on the firm’s unique capacity for executing large and complex engineering projects – are very positive, with an order book worth more than €9.5bn as of September 2010.
In relation to asset operations, Abengoa manages concession-type infrastructure and industrial plants in high growth sectors. In the former, Abengoa produces solar energy based on CSP, transports electricity and desalinates water – all of which are fundamental to a more sustainable development model. This activity carries very low market risk as the contracts signed guarantee future revenues. This is an area that provides important stability and recurrent revenues for the company, and which is supported by a portfolio – measured in future sales associated with the operation of the assets that are currently operational or under construction – valued at more than €32.5bn at the end of 2010.
With regards to industrial plants, Abengoa focuses on producing biofuels and on recycling specific metal residues such as steel dust and salt slags. These are areas in which Abengoa has a relevant leadership position and applies a successful risk management policy.
Today, Europe, Latin America and the US are the most important geographic regions for Abengoa, although it also has an increasing presence in north Africa, the Middle East, India and China. In recent years, given the now globalised economy, the major companies have begun to show special interest in adopting principles that incorporate best international practices with regards to good governance. These practices include a series of mechanisms based on honesty, transparency and social responsibility, increasing the value of the company while also generating trust in the market. Abengoa believes that success is based on strong internal management and therefore good corporate governance.
Transparency is a duty of the company and Abengoa has implemented various mechanisms so that its different stakeholders have a true and fair image of the company. Abengoa does not limit itself to solely complying with corporate governance rules. Instead the company keeps up to date with best practices, developing its own instruments for control and management based on internationally recognised standards (SOx).
One of the principal challenges of any company is to improve and strengthen relations with stakeholders. Since it was founded, Abengoa’s culture has been strongly associated with the environment in which it carries out its projects, both socially and environmentally, seeking to stay ahead of requirements in relation to corporate governance so that all the information that appears in the annual report has been independently verified. In 2007, for the first time, the company independently verified the Corporate Social Responsibility Report; in 2008 it was the Greenhouse Gas Emissions Report; and in 2009 it independently verified the Corporate Governance Report. In total, six reports have been issued by the external auditors, and will be integrated in the 2010 annual report. Abengoa is the first listed Spanish company to obtain a voluntary verification report with reasonable assurance of its Annual Corporate Governance Report.
Lastly, it is worth remembering Abengoa’s commitment to corporate social responsibility. The company carries out numerous initiatives aimed at promoting culture, research, education and social welfare through the Focus-Abengoa Foundation.
The focus on sustainable development is the backbone of Abengoa, together with a clear commitment to innovation and internationalisation. Abengoa is a genuine international leader in the sectors in which it operates, with a solid presence and a brilliant future.
