by Jes Pedersen, CEO/President
Employees were introduced to Webcor's Strategic Plan in early 2018. The plan was ambitious, with a 20-year horizon broken out into five-year increments. We are still in the first of those five-year phases, which is anchored by four milestone initiatives. But after just the first three years of the plan, we have retired two initiatives that have met their objectives and been woven into company-wide operations. And we have introduced a new initiative: Profitable Growth.
The goal of this initiative is to finalize a shortlist of opportunities that Webcor can pursue in order to grow profitably.
The "profitable" aspect of this initiative is central to Webcor's plans. We do not want to grow for growth's sake. We will choose our growth opportunities based on the ability to establish a long-term presence profitably. Additionally, we will focus on further diversifying our operations, which helps smooth out the inevitable ups and downs in the market, such as those we have just experienced with the pandemic-induced recession.
A number of approaches are open to us. For example, we could add another trade to our Webcor Craft group, which is home to Webcor Concrete, Webcor Carpentry, and Webcor Drywall. We can expand into new market sectors, such as industrial construction. We could also acquire an architecture firm to bolster our Design-Build capabilities. The initiative team is aggressively researching all these possibilities.
But the most immediate opportunities involve opening operations outside of our existing geographic locations in the Bay Area and Los Angeles. We have already made a move into one region while we are actively exploring another, this one outside of California.
San Diego
One of the most beautiful cities in the world, San Diego is not actually new to Webcor. We were active in the commercial high-rise market there before the 2008 recession. Sadly for us, 13 years ago, Webcor had not yet diversified its portfolio. When work in San Diego's commercial core dried up as a result of the recession, we wound up refocusing our efforts in San Diego on federal work. We have continued to build in that sector based on our success with Camp Pendleton's 41 Area, a significant Design-Build project.
Since then, our federal projects have expanded to include micro grids, placing Webcor at the forefront of this important and growing energy construction market.
But times have changed. Webcor's portfolio is much more diversified. And the San Diego market is booming in exactly the areas where we have an unparalleled resume. We are pursuing the surge in commercial, higher education, and science and technology projects.
And we have re-hired Cecilia Kucharski as the vice president to lead those efforts. During Cecilia's first tour with Webcor, she was asked to move to San Diego and opted to stay after we scaled back our operations when the recession struck. She is the perfect person to guide our return based on her experience, her knowledge of the region, and her relationships with subcontractors and the building trades.
Cecilia is actively hiring to staff the office we recently opened nearby San Diego International Airport. (As I write this, we are looking for a proposal manager, federal estimator, project director, and preconstruction director.)
Denver
The research from our Profitable Growth team keeps pointing to Denver, a city we have been interested in even before we updated our Strategic Plan. In addition to the size and growth of the market, we are excited about the potential of expanding outside of California. Construction markets have natural cycles of growth and retraction, and geographic diversity can help moderate those impacts to the company as a whole. In addition, adding regional offices can offer employees the option of moving to a new area and provide growth and promotion opportunities that would otherwise be limited to only our offices in California.
Before the Covid-19 pandemic derailed plans, we were making headway on a Denver-based Public-Private Partnership (P3) with Plenary Group, our partner in the landmark UC Merced 2020 project. While we are cautiously optimistic that this project could resurface, the work we did before it was short-circuited included building relationships in the Denver AEC community, relationships that continue today.
As a result, we are still interested in potentially entering what was an $8 billion construction market in Denver in 2019 with nearly 13-percent compound annual growth from 2016 to 2019. In 2021, that growth has only accelerated as job growth in Denver continues to expand. In early 2021, we forged a local partnership that enables us to continue studying the Denver market, with several potential projects currently under review.
We certainly cannot say yet whether we will make the kind of commitment to Denver that we have in San Diego, Los Angeles, and San Jose, but the opportunities are strong enough for us to continue studying the market and working with our strategic partners to map out potential plans for an entry into that market.
Where Do We Go From Here?
The work of the Profitable Growth Initiative team is focused on ensuring we make sound, strategic decisions to support our expansion. Even without these possibilities, we are poised to grow considerably in the next few years, according to our revenue forecast. New projects are emerging at a steady clip and some that were put on hold because of the pandemic are rising from the ashes.
As a result, we are hiring in a variety of positions; we currently have 25 open positions. The future at Webcor is bright, exciting, and full of variety and challenge.
There has never been a better time to work here.
