Five questions with Marcelo Odebrecht

Images: Dormanlong Technology

Brazil's mammoth construction company, Construtora Norberto Odebrecht, has built some of the largest hydroelectric plants, highways and airports in the world. But the current president of the company, Marcelo Odebrecht, started his career in Miami. In 1991, he was in charge of the project to build the Fortune House Hotel on Brickell Avenue.

The 38-year-old civil engineer is the grandson of Norberto Odebrecht, who founded the company in 1944 in the Brazilian state of Bahia.

The Odebrecht company, which includes construction and chemicals divisions, is highly decentralized, with entrepreneurial partners in each subsidiary making decisions on opening new offices, investing in new companies and participating in projects.

Odebrecht, who became president in 2002, has a degree from Bahia's Federal University and an MBA from the IMD business school in Lausanne, Switzerland.

When he was in Miami recently to accept an excellence award from The Brazilian-American Chamber of Commerce, Odebrecht sat down with Miami Herald reporter Jane Bussey at Odebrecht Construction, the U.S. headquarters in Coral Gables.

Q: How does Odebrecht choose markets to work in? What made you come to Florida?

A: A lot of construction companies, they work on a project basis.What we try to do is, we go for a country, for a client, for a market and not for a project. Every country that we arrive in, we stay there. There was a group of entrepreneurial partners who decided to open up a branch in the United States. They realized there was opportunity. They just pushed forward until they got the first contract and then we stayed. In Latin America, we have been in some of the countries for 20 years. Sometimes one government competes against the former government. What you have to be careful of in Latin America, you have to work for the country and for the state and not for a specific government. You have to make sure all your projects are national projects, are priority for the country, not priority for the government.

Q: What is the biggest project that you are working on?

A: In Peru we are building the corridor [Inter-Oceanic Highway] that comes from Brazil to the Pacific. It is a 700-kilometer [420-mile] road through the Amazon and through the Andes and that will make a huge impact, both in Brazil and in Peru. We are doing two main roads, one from the south and one from the north. When you put those two together, it is almost $1 billion. We are not only constructors but also investors.

Those two projects, they are going to integrate South America. The Miami Airport, when you put the South and North terminals together, it is one of our largest contracts. But our largest contract is yet to come. It will be the largest private project in the world. On the Madeira River, [a major tributary to the Amazon in Brazil], we are planning to develop two hydroelectric power plants. Each one of them will be $5 billion. Brazil has never financed this amount for a project. The money will come mainly from the banks in Brazil.

Q: What are some of the challenges or surprises working in Miami, such as delays and change orders in projects?

A: Those kind of changes, those kind of problems, happen everywhere. Building something is not as easy as a production line. My first project was here in Miami. It's kind of funny to work in Miami; sometimes our superintendents they'd come to our trailer and ask us to translate. The workers, they speak mostly Spanish. We are the largest contractor on the North and South terminals, but we have about 80 people. In our business, we can do a lot with partners and subcontractors.

Q: How do you manage such a far-flung series of operations and stay profitable?

A: The [head] of Odebrecht is like the queen of England, there is full delegation [to entrepreneurial partners]. I don't really make decisions day-to-day. Once someone asked my grandfather -- because he was the one who organized the company -- if he was not frustrated by the fact he had given up his power, the power to make decisions. He said, OK, but there is one thing I kept with me -- I choose the guys. Once I choose, it's up to them to make all the decisions. The successes more than compensate for the losses.

Q: What do you see as the challenges of the future for Odebrecht and other construction companies?

A: It is important for everyone to realize that the infrastructure boom in the world has come to a point where all the resources are stressed. Costs have been skyrocketing; people should realize this is a global thing. It's very difficult to control costs in a market like that. People had not invested in infrastructure, not enough in the last few years. Infrastructure has become the bottleneck of development. We are at a crossroads. You need to invest in   infrastructure, but you really don't have enough resources. You are going to see that in all projects -- everywhere.