AG&P: Leading the way with Modstruction
AG&P Chairman Joseph Sigelman has built and transformed start-ups in Latin America and India into large corporations, creating thousands of jobs. In 2010, he turned his attention to the Philippines – one of the fastest growing emerging economies in Southeast Asia.
A newly industrialized country, Goldman Sachs estimates that by the year 2050, Philippines will be the 16th largest economy in the world. The country is already on the Goldman Sachs list of the Next Eleven economies. Driving the GDP growth of the country is the transition from an agricultural to a services and manufacturing-based economy.
“In terms of the value of exports, the Philippines has the capacity to be one of the world’s greatest manufacturing power houses, supported by what I believe is a world-class workforce, delivering the highest levels of productivity in the global industry in terms of man hours per tonne,” said Sigelman, who fell in love with AG&P during a vacation to the Philippines in 2010, purchasing it from DMCI in December of the same year.
Established in 1900, AG&P is synonymous with the Philippines construction industry, working across the engineering and construction spectra on key projects, ranging from the country’s first steel bridge, Manila’s water and sewage systems, a major convention centre, skyscrapers and national monuments.
In less than two years, Sigelman has transformed the 112-year giant into the only Philippines-headquartered multi-national company providing modular engineering, fabrication, modular construction and asset support services to the oil & gas, mining, power and civil infrastructure sectors. From 300 people working in the company’s heavy fabrication yards in December 2010, Sigelman has grown AG&P to a base of 3,000 people, and is expecting to double the company’s workforce to 6,000 by end of this year.
Undoubtedly, thanks to the burgeoning economy and a “new wave” of innovative Philippines companies like AG&P that are enticing expats to come home, reverse migration is becoming more common in the Philippines.
“We maintain a family-oriented culture, are committed to skills development, job quality and workplace safety, as well as providing long-term employment opportunities and career growth for our people,” said Sigelman. “We partner with some of the largest multi-national customers on critical resource and infrastructure projects at home and in North America, Australia, Southeast Asia, Latin America, Europe and Africa.”
It is in its 150 hectares state-of-the-art yards in Batangas, the largest heavy fabrication yard in Southeast Asia, where AG&P employees build their careers and make the company’s modular construction, or “Modstruction” magic happen.
Going beyond the traditional steel and pipe definition of modularization, Modstruction is a holistic approach to global infrastructure projects. The company uses its vast knowledge of modular fabrication to help customers plan, design, engineer, and construct large infrastructure projects in its yards or on-site. They deliver and assemble the modules where they are needed, perform operation and maintenance services, and, ultimately, decommission and disassemble them at the end of the modules’ lives.
“The great advantage of AG&P’s Modstruction process is that it allows infrastructure to be built in a controlled environment in the Philippines to enhance safety and quality,” said Sigelman. “It also allows for parallel processing at multiple facilities so that projects are finished faster than in a normal construction setting, where they are constrained by a linear progression. This means that our clients can drive revenue from projects far sooner than with traditional approaches.”
AG&P modularizes infrastructure, some as large as seven stories tall and weighing thousands of tons, which leave the fabrication yards for job sites all over the world via heavy-lift ship or container.
“Reduced environmental impact is inherent to the Modstruction model,” said Sigelman. “AG&P builds infrastructure remotely and then assembles the modules on prepared sites; customers enjoy reduced emissions, energy consumption and water usage during construction. Waste and other issues arising from site decommissioning are also significantly cut down.”
AG&P’s total approach to infrastructure from early planning stages all the way through to commercial operations has seen the company work with some of the biggest names in the engineering and construction industry, such as Bechtel, Foster Wheeler, CB&I, BP, Shell, Inpex, Vale, Worley Parsons, KBR, Chiyoda, and JGC , providing solutions to some of the world’s most complex projects.
Sigelman, a Harvard and Princeton alum, is paving the way with this innovative approach to industrial process outsourcing. In doing so, he’s helping build the profile of the Philippines as a global outsourcing giant, primed to overtake India in the sector, where Sigelman’s entrepreneurial career began.
After a stint with Goldman Sachs in London, Sigelman decided to try his luck in India. In 1999, he set up OfficeTiger, a professional services outsourcing firm, with his partner Randolph Altschuler, which grew into a several thousand-employee firm.
At a time when high-end support services were practically unheard of in a country which would later become a world leader in the field, OfficeTiger focused on the outsourcing of premedia, accounting, research and analytics for leading investment banks, law firms and large corporates. Sigelman served as OfficeTiger’s Co-CEO, until its $250m acquisition in 2006 by RR Donnelley (NYSE:RRD).
In 2007, Sigelman co-founded, and then led as CEO, PetroTiger, which became the leading regional petroleum production and infrastructure services company in Latin America, throughout Colombia, Panama, Mexico, Peru, Ecuador, Argentina, Costa Rica and Spain. PetroTiger provides full engineering, construction management, operation and maintenance services for the energy and power supply chains, including running oil and gas fields and designing and constructing refineries, pipelines, gas plants, production facilities, roads, tunnels and water treatment facilities. Once again, Sigelman successfully transformed the start-up into a company with a workforce of over 2,500 in under four years.
Today, Sigelman believes the Philippines has “the strongest government in the country’s history for prioritising public-private partnerships and foreign investment, as well as one of the better governments in the world in terms of integrity standards and administration.”
AG&P is supporting the country’s growth by training and employing Filipinos, driving international business to its local yards and providing opportunities for its people to gain experience abroad through its Overseas Manpower Division.
“As the largest employer in Batangas, our obligation to the community doesn’t stop at employment in our yards. Education is the most powerful way to influence the future of the country and our employees receive ongoing training to maximize their potential,” said Sigelman.
What really sets the Philippines apart, according to Sigelman, is its people who exhibit “unrivalled passion and dedication to their work.”
“There is a Philippine flag flying on top of some of the most complex infrastructure projects in the world,” said Sigelman. “Our employees are proud to be a part of these projects and the impact they are having on the reputation of the Philippines the world over.”
A man driven not by money but by the passion for making a difference and a meaningful change where it matters the most, Sigelman is revolutionising how the construction and infrastructure worlds do business and at the same time, catapulting Philippines on to the global stage.