| Construction industry dominates list of region's fastest-growing companies |
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Building revenue: Construction industry dominates list of region's fastest-growing companies June 16, 2008 By Tom Henderson Crain's Detroit Business This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Despite the suffering local economy, subprime woes, the home-building meltdown and shrinking credit markets, construction companies dominate the list of fastest-growing companies in Southeast Michigan. When comparing 2007 revenue with that of 2006, five of the 12 fastest-growing companies in the region on Crain's list — and nine of the top 21 — are in the construction industry, led by Taylor-based J.S. Vig Construction Co., which grew 180 percent, from $19.3 million to $54 million. Local construction firms ranked third, sixth, seventh, 10th, 12th, 16th, 17th, 18th and 21st. Detroit-based VisionIT, an information-technology out-sourcing and staffing company that is also No. 4 on Crain's list of Michigan's largest minority-owned firms, was No. 1, with revenue growth of 373 percent, going from $22.6 million to $107.1 million. In July 2006, the Detroit Public Schools Board of Education awarded the company a five-year contract worth $48.4 million. The secret to success of local construction companies, said Andrew Shmina, vice chairman of the Associated General Contractors of Michigan, is being flexible — knowing what lines of business to cut back on, which to beef up and, if need be, when to start looking for contracts in other geographic markets. J.S. Vig is a prime example. It expanded its geographic base from Southeast Michigan to Texas, where it got two projects, and it diversified its product mix, taking on its first hospitality job — redeveloping the Embassy Suites Hotel near Detroit Metropolitan Airport. Bloomfield Hills-based Synergy Group Inc. also expanded its reach while hitting No. 7, landing a $200 million hotel and condo project in Orlando, Fla. Joseph Aristeo, president of Livonia-based Aristeo Construction Co., said his firm was able to grow its revenue by 71 percent by expanding geographically and by moving into new lines of business, particularly project management of large wind farms. Aristeo built 300 megawatts worth of capacity in upstate New York last year, is building another 300 megawatts this year and is bidding on projects in Texas and Iowa. “We've all suffered with the Michigan economy. Those of us who are growing our sales are growing them outside the state,” he said. “We got involved three years ago in the wind-energy business, and that's really growing.” He said the company also has expanded its geographic reach on the auto portion of its projects. Aristeo has done plant updates in Minnesota, Illinois, Ohio, Indiana and Kentucky. While Ford Motor Co. remains its biggest auto customer, it has recently branched out to BMW and Nissan Motor Co. Ltd. Aristeo said 2008 is on track to maintain 2007 revenue of $216 million. MIG Detroit L.L.C. was founded by President and CEO Paul Jenkins Sr. in 2000. His background was in construction projects for Ford and General Motors Corp., and while MIG also did auto-related work, it quickly diversified into construction for schools, utilities and government. In 2005, MIG landed a contract for the MotorCity Casino, which led to a major geographic expansion into Las Vegas. MIG got its first contract there in 2006 and has since worked on projects at Mandalay Bay, Luxor, Excalibur, Treasure Island and the MGM Grand in Las Vegas. It ranked 21st, growing revenue 61 percent to $142.4 million. Shmina, who is president of Brighton-based A.Z. Shmina Inc., said his construction-management company, which was founded by his grandfather, Achilles, in 1916, had long focused on industrial construction. In recent years, it had specialized in projects at research and development centers for GM and Ford. But Shmina said that as the auto business began to shrink in 2004-2005, he chose to pull his resources out of industrial and concentrate on health care, education and water treatment. “In 2005, we decided the economy was changing, not cyclically, and we needed to retool and decide what kind of company we were going to be,” he said. It became clear that if he wanted his company to maintain its 30 percent share of revenue from industrial, it would have to seek business nationwide with GM and Ford. “We weren't big enough to do that. And we wanted to stay focused on Michigan,” he said. “We poured our strengths into some categories and decided to ignore others. Health care is booming right now. And while water-treatment facilities are down right now, over the next 20 years that's going to be a large area of growth.” As a result of the refocusing, his company ranked No. 12, with 80 percent growth, from $15 million to $27 million. Brighton-based Contracting Resources Inc., also has benefited by the health care boom. “The health care guys are spending,” said founder and President Jim Barnas. He said about 70 percent of his company's revenue, which went from $16.8 million in 2006 to $29 million last year, is in hospital renovations, with another 5 percent to 10 percent in medical-office construction. A current project is a $32 million renovation of Monroe Mercy Memorial. Barnas expects revenue this year to increase by at least 25 percent. While sharper focus, diversification and geographic reach can be credited for some growth, timing and a good pipeline is important. Key to Synergy Group doubling its revenue were contracts with Cleveland-based National City Corp. to build an office building in Troy and bank branches, contracts let before National City became one of those banks most affected by the subprime mess. The company also completed a 153,000-square-foot building in Farmington Hills for Daimler Financial Services Americas L.L.C. The company has expanded its business to Florida markets, obtaining an estimated $200 million hotel and condo development contract in Orlando. The company is on track to earn between $150 million and $160 million in revenue in 2008, according to Bruce Babiarz, an independent public relations consultant to Synergy Group. A solid pipeline helped the No. 9 growing firm, Jenkins Construction Inc., which grew 94 percent, increase revenue from $30.2 million to $58.6 million. It did two new bank branches for Fifth Third Bank, Eastern Michigan in the city of Detroit, projects that launched well before its parent company, Cincinnati-based Fifth Third Bancorp, was also hit hard by subprime troubles. “The true fallout in subprime came late in 2007, so you could have had a respectable 2007 based on projects in the pipeline,” said David Sowerby, portfolio manager and chief market analyst for Loomis Sayles & Co. L.P. in Bloomfield Hills. “And the research I've seen shows that commercial construction has fared much better than residential.” While many of the area's design-and-build firms and construction-management firms have weathered the storm, their executives say to expect continuing difficulties in home building and smaller commercial real estate projects. Bernadine Williams contributed to this story. |
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what others are saying:
“With its tremendously skilled, hard-working team, J.S. Vig Construction helped fulfill the vision that the City of Romulus had in mind when we set out to build the Romulus Athletic Center. Thanks to J.S. Vig, the Romulus Athletic Center is now a beautiful, award-winning and popular athletic facility that has become the jewel in Romulus' crown.”
Tim Keyes
City of Romulus
Tim Keyes
City of Romulus
“It has been a pleasure working with J.S. Vig on numerous projects over the past few years. They exhibit professionalism and honesty in their work, along with a willingness to look at options and alternate approaches to make project happen and succeed.”
David Esau, AIA, LEED AP
Cornerstone Design Inc
David Esau, AIA, LEED AP
Cornerstone Design Inc
“ J.S. Vig is a company that is easy to work with because of their integrity. Our two firms have prospered from an over 30-year relationship, including many projects and personnel, which could not have happened without ongoing dedication to quality and honesty.”
David Zanely, LEED AP
Wilkie & Zanley Architects, A Sidock Company
David Zanely, LEED AP
Wilkie & Zanley Architects, A Sidock Company
“I have enjoyed over a 20-year relationship, built on honesty and professionalism, with J.S. Vig Construction Company.”
John Wilkie, AIA
Wilkie & Zanely Architects, A Sidock Company
John Wilkie, AIA
Wilkie & Zanely Architects, A Sidock Company
“J. S. Vig Construction Company has built over 500,000 sf for Avis Farms. We have found their staff and subcontractors to be honest, creative and responsive in meeting our aggressive project goals.”
Trish Kalmbach
BOSC Equities
Trish Kalmbach
BOSC Equities
“…Simply one of the most organized and talented construction teams that I have had the pleasure of working with in 25 years.”
Greg Heil
President, Heil Partnership
Greg Heil
President, Heil Partnership
“J.S. Vig Construction Company is honest, efficient, responsive, and completes each project with the client's needs in mind.”
Jerry Reinhart
President, Pomeroy Investment Company
Jerry Reinhart
President, Pomeroy Investment Company
“While this was an extremely difficult project in terms of phasing and working around our children, the employees of J.S. Vig did an outstanding job!”
Kurt M. Sebaly M. Ed.
Pentickton Center for Blind Children
Kurt M. Sebaly M. Ed.
Pentickton Center for Blind Children
“Through the entire pre-construction and warranty phases, your people have been responsive, professional, and cost-efficient. I would welcome the opportunity to recommend your firm and look forward to working together in the future.”
Larry Reed
Metavante Corporation
Larry Reed
Metavante Corporation
