How CH2M HILL Went Global–The History of CH2M HILL International
Contributed by Kent Robinson
The Formative Years – 1960-1980
CH2M HILL’s international activities began in the late 1960s period when one of the firm’s founders, Holly Cornell, led an effort to find new business opportunities in the Middle East, specifically in Iran. This effort did not produce much new work, but became the basis of some CH2M HILL folklore when a legal prohibition to repatriating funds from Iran led to payment in an unusual currency….Persian rugs.
By the mid-1970s, the international demand for U.S. engineering services, particularly for water and wastewater facilities design, was growing rapidly. To assess this market demand, the firm assigned the international business development task to Les Wierson, then the Portland Office Manager. The oil-rich Middle East was selected initially because of its demand for U.S. engineering services and the ability of the Arab states to pay for services in U.S. currency. Saudi Arabia, in particular, was emerging as a strong market for U.S. engineering firms.
In 1978, as a result of Les Wierson’s early efforts, CH2M HILL was awarded its first significant international project to provide city planning services for the burgeoning cities of Dammam and Al-Khobar in Saudi Arabia. This work was accomplished by short-term assignments of staff from various CH2M HILL offices throughout the U.S., as well as by contract employees. The projects for Dammam and Al-Khobar, as well as for an urban planning work for the City of Hail, were led by Otto Vydra and Nofal Kasrawi, with support from Hossam Toulan and Dick Ivey to mention only a few. C.J. (Gus) Pantazi, the Portland Regional Administrative Manager, left his post for a planned 3-month assignment to set up the project office–his actual tour of duty lasted about 15 months! Mary Barzee provided home-office support.
As a result of practical issues arising from the Dammam and Al-Khobar projects experience, it became clear to all that the firm needed to set up a separate corporate entity, specific to the needs of international project delivery. Therefore, in l979 Pantazi presented the case to Mike Fisher, who led the establishment of the required corporate entity. This entity, CH2M HILL International, Inc., was formed as a separate operating company to address the administrative, financial and project execution issues that did not conform to the established policies and processes of the U.S. domestic company, CH2M HILL, Inc. In keeping with the firm’s love for acronyms, Pantazi coined the term CHINTL to distinguish CH2M HILL International, Inc. from the parent CH2M HILL, Inc., or CHINC. Later in the 1990s this acronym was shortened to CHIL.
In 1979, Wierson became the first President of CH2M HILL International, Inc., then headquartered in Portland, Oregon. Nofal Kasrawi and Otto Vydra were named Vice Presidents and Pantazi was appointed as Administrative Manager. Support staff included Mary Barzee, Paula Ryan and Luc Normandin. Separate regions were established for the Middle East, Latin America, and Europe and ROW (Rest of World). Kasrawi served as Middle East Region Manager, Ignacio Garcia-Bengochea led the Latin American Region and Wierson managed Europe and ROW. The business model adopted in 1979 foresaw that project delivery would be carried out using primarily U.S.-based staff and expatriates. Therefore no permanent overseas offices were established.
New Beginnings, 1980-1990 Decade
Just as the 1980-1990 decade was one of major growth for the domestic operations of CH2M HILL, this period also saw a significant expansion of CH2M HILL’s international activities. This growth was a result of two factors. The first was clearly the leadership and enthusiasm of the new organization and leadership team under Wierson’s direction. The second was the availability of projects funded by the U.S. Agency for International Development (USAID) and the World Bank, through both grants and loans, to address the serious infrastructure and environmental problems of many Third World countries. CH2M HILL International completed many such USAID and World Bank projects during this 10-year period.
Perhaps most important among these projects was the huge USAID-funded Alexandria, Egypt, Water Supply and Wastewater Disposal project initiated in 1980. This trophy project, delivered through a joint venture with Metcalf and Eddy, utilized an onsite team of CH2M HILL expatriates led at times by John Filbert, Suhr, Vydra, and Wierson. The outstanding results of this first major USAID project led to many more such projects throughout the Middle East and sub-Saharan Africa. It is notable that CH2M HILL International’s follow-on work for the cities of Alexandria and Cairo has continued without interruption to this day.
During the remainder of the 1980s, Wierson’s leadership grew CH2M HILL International’s partnership with USAID for many other water, wastewater and environmental project assignments throughout the world. These projects, and similar projects funded by the World Bank, provided assignments and opportunities that enabled the development of a core staff capability with experience in international assignments. This capability was a valuable prerequisite to qualifying the firm for the major international projects that were to propel CH2M HILL International’s rapid growth during the period of the l990s.
Some examples of the CH2M HILL International, Ltd. projects during the decade of the 1980s follow, along with a notation of the respective project managers:
Sri Lanka — World Bank-sponsored water resources development project (1981-85) led by Ed Lance.
Republic of Chad, Africa – World Bank-funded water resources development project (1982-83) led by Mike Stansbury.
Beijing, Peoples Republic of China – World Bank-sponsored technical assistance and process design evaluation for the Gobedian Wastewater Treatment Plant (1980-81) led by Gene Suhr and Ralph Peterson.
Republic of Trinidad and Tobago – Water treatment plant design and construction management (1982-85) led by Fred Haram and Dick Humphrey
Sassol Coal Gasification, South Africa – Coal gasification system wastewater treatment plant evaluation and design (1985) led by Jay Mackey and Ralph Peterson.
Cairo Water Authority – Design and construction management of water storage and conveyance facilities (1988-90) led by Teny Mittal and Otto Vydra.
A Change in Market Approach, 1990-1991
Throughout the 1980s, CH2M HILL International, Inc. continued to operate as an extension of the U.S. domestic operation, relying on CH2M HILL, Inc. staff to provide much of the needed project delivery capability. This meant that our international work was generally restricted to projects funded by USAID, certain international financial institutions (IFIs), such as World Bank, and U.S. multinational companies that placed a high value on U.S. engineering expertise and were willing to pay a premium to obtain it. This business model market precluded a need to establish off-shore offices. Therefore, as the end of the decade of the 1980s approached, the firm had yet to put in place the off-shore offices necessary to employ and house significant numbers of foreign nationals.
By 1989, it became apparent to CH2M HILL President Harlan Moyer and Board Chairman Jim Poirot that a significant investment in the growth of CH2M HILL International’s off-shore presence and staff capability would be necessary to position for continued growth outside of North America. They realized that the business model of following USAID, IFIs and U.S. multinational firms overseas had provided many successes, but did not in the longer term provide a sustainable platform for the firm to compete and grow on a level playing field with host country competitors.
Faced with this reality of globalization, they concluded that permanent, foreign national staff capability would be necessary to expand our market position in selected worldwide geographies. Therefore, Jim Poirot chartered a Task Group, led by Steve Lackey and supported by John Lee, Ralph Peterson, Otto Vydra, Kent Robinson and others, to recommend the geographic and market focus for expansion of CH2M HILL International’s operations. The Task Group report recommended establishment of off-shore offices with local staff capability to serve Southern Europe, the Middle East and the Pacific Rim, focusing primarily on the water, wastewater markets.
Expanding operations, 1990-1995
In 1990, Les Wierson retired as President of CH2M HILL International and Howard Schirmer, formerly International Managing Director for a large, multi-national consulting firm, was recruited as President. He recommended, and in June 1991 the CH2M HILL Companies Board of Directors approved, an aggressive plan to expand the firm’s international consulting practices in water, wastewater and environmental services. The Board concluded that the firm’s long-term success required a strong global practice to capitalize on growth opportunities, to meet our multinational private sector client needs, and to preserve the firm’s credibility in the U.S. marketplace. An initial $5 million investment was approved to create a transnational operation based upon geographically strategic, semi-autonomous offices, staffed primarily with host country nationals.
Consistent with the above, the first half of the decade of the 1990s saw considerable activity as the new CH2M HILL International leadership team was recruited and offices were established in such locations as Mexico City, Sao Paulo, Taipei, London, Paris, Moscow, Prague, Sydney, Budapest, Cairo and Tokyo. The head office of CH2M HILL International was moved from Portland to the Denver Headquarters Offices of CH2M HILL. Otto Vydra and Nofal Kasrawi continued in leadership roles supported by new arrivals such as Dirk Stauthammer. and Davy Sellman were recruited to support staff leadership.
Success of the Board-approved business model, as measured by growth in revenue, soon became apparent with the winning of several new, major projects that included:
A contract for program management for the USAID Environmental Protection Technology (EPT) Project for Central Europe and the former Soviet Union.
A contract for program management for the USAID Cairo Sewer Program led by Collie Martin.
Contracts for the design and construction management of three wastewater treatment plants in Taiwan led by Ray Yep.
A major General Electric facility site remediation project in Taiwan.
A 5-year contract for construction management of three wastewater treatment plants for the Bangkok Municipal Authority led by Bill Murdock and later by Doyle Tinkey.
A contact for the design and construction management of the World Bank funded Changchun, China, water reservoir and water treatment plant projects led by Dave Sailor.
A contract for health physics support associated with the Maralinga nuclear project in Australia led by Mike Williamson.
As a result of establishing key off-shore offices and obtaining the indicated projects, the foreign nationals staff of CH2M HILL International grew from 2 in 1991 to 200 at the end of 1995.
Global Business Groups, 1996-2002
In early 1996, a restructuring of CH2M HILL’s domestic and international operations was undertaken. This restructuring was driven by major changes affecting the global marketplace and the continuing need to improve the competitiveness of CH2M HILL Companies, Ltd. The result was the establishment of the Global Business Structure whereby the Water, Transportation and Environment Business Groups were fully integrated into the firm’s Regional Operations throughout the world. To assure that the Global Business Group strategies and resources were applied to best effect, the operations of CH2M HILL International, Ltd. and CH2M HILL, Inc. were closely aligned, with Craig Zeien as President of both.
The above-described change in the firm’s operational approach to its global businesses immediately began to produce some important results. The following are examples of some of the project initiated in this timeframe:
The landmark Singapore Deep Tunnel Sewerage System (DTSS) project led by John Filbert.
Our first major international project of the Communications Group for Penang and Jahor Bahru, Malaysia. This project was led by Gary Beech.
Our first-ever international design/build contract, the Manakau Wastewater Treatment Plant in Auckland, New Zealand. This project was led by Don Evans.
Selection as design and construction manager for the expansion of the Manas Airport in Bishkek, Kyrgyzstan, through a joint venture (CUES) of CH2M HILL International, Ltd. and Mitsui of Japan.
When Craig Zeien, President of both CH2M HILL Inc. and International, became seriously ill in early 1998, Kent Robinson was appointed President of CH2M HILL International, Ltd., with the mission to continue full implementation of globalizing the firm’s new business group structure throughout CH2M HILL International’s regional operations. This meant a continued reduction in the autonomy of international regional operations but improved access of the resources required to grow the international businesses. To facilitate the accomplishment of this mission, the Asia-Pacific regional operations were consolidated under leadership of Ron Advani and Europe and Middle East regional operations were consolidated under the direction of Usama Jayussi. Bill Dehn and Tom Searle became Global Operations Directors for the Water and EE&S business groups (respectively) and Omur Akay became Regional Business Operations Director, each with responsibilities for North American and International regions.
During the 1998-2002 period, the expansion of the firm’s international operations continued to accelerate, mainly on the strength of Water Business Group design and design/build projects, EE&S Business Group Department of Defense projects, and the rapid growth in the Communications Group businesses. Some examples of projects won and initiated during this period include:
A contract as design and program manager for a major communications project in Spain for Cable Europa was obtained by a team led by Greg McIntyre and Gary Beech.
The Singapore Changi East Wastewater Treatment Plant design and construction management project by Dave Evans and Gordon Nicholson.
The Sydney Water Department multiple design/build projects for water and wastewater treatment plants and wastewater collection systems, procurements led by Jim Otta.
The USAID-funded West Bank Water Resources Projects II and III, procurement led by Doug Griffes and Don Evans.
Multiple projects throughout Europe and Asia under the U.S. Air Force Center for Environmental Excellence (AFCEE) program contract managed by Mike Smith.
These successes were largely due to the growth in business development and project delivery skills of our international staff and to the strategic guidance and resources provided by respective Global Business Groups. The number of host country employees increased to 1,200 located or housed in 26 offices worldwide. The larger of these office operations are in Singapore, Australia, Spain, The United Kingdom, Germany, Poland, China, and Argentina.
2002 and Beyond
In early 2002, the CH2M HILL Companies Board endorsed an initiative to expand in China. Kent Robinson, then President of CH2M HILL International, Ltd., relocated to Beijing. As a result, Robert Sheh was appointed as President of CH2M HILL International, Ltd.
Economic uncertainties and rapidly changing international market conditions were the hallmark of the 2002-2003. A result was a serious decline in the international communications and industrial businesses. Also, this period saw rapid emergence of China as an economic power and workshop to the world. China is a vast and rapidly growing market for all of the firm’s services, but as a newly emerging economy, it poses special challenges.
A special initiative was launched to integrate the existing China operations of CH2M HILL and IDC to achieve a more rapid market penetration and enhanced brand recognition. This led to the formation of the CH2M-IDC China company that became fully operational in early 2003.
Clearly the early vision for the international growth and success of CH2M HILL has been realized. We and future generations of the firm are indebted to Holly Cornell, Les Wierson, Harlan Moyer and Jim Poirot for the leadership and perseverance that were pivotal to achieving the vision.
(Editor’s note: This remarkable summary of a dynamic portion of CH2M HILL’s history was created by Kent Robinson. His innate modesty prevented him from expounding on the valuable contributions he made and is still making well beyond the turn of the century to the successes of the overall CH2M HILL International investments in the global marketplace. Many progressive changes were made under Kent’s steady leadership, and he deserves a great deal of credit for his innovative approach to projecting, while protecting, the parent firm’s interests outside of the U.S.A. borders.)