Renowned for its green approach to construction, Panagro is taking its innovative concepts and converting its clients
By Ellie Duncan
Panagro has been an established name in the construction industry since 1937. Based in Leidschendam, Voorburg, the company is at the forefront of residential and commercial construction and development in the Netherlands.
“We used to be the internal contractor for our owner, a development company, and then we evolved to a self-supporting construction company,” explains Assistant Director Gerard Bac. “We are now completely autonomous.”
Having joined the company seven years ago, Bac is well-placed to discuss the group’s more recent projects and how the business has been impacted by global events. I just finished university when I started in the company,” he says, “and my personal goals were to first gain the necessary workload and experience to become an expert
in engineering and construction engineering. “It soon evolved to a more managerial role.”
Today, the company provides a range of services, from renovation and property maintenance, to promoting the use of renewable energy concepts. Its innovative solutions have seen Panagro play a vital role in engineering projects from concept to
completion.
“We have two main client groups; there are the commercial developers and the housing corporations,” he says. “I think at the moment, the housing corporations are the vast majority of all the projects we do.”
Cost reduction strategy
As Bac will attest, the company is committed to cost reduction in developments, and its focus on renewable and geo-thermal energy strategies in construction. Implementing energy-saving initiatives into its own projects is ‘standard procedure’ for Panagro. However, the company, and Bac himself, are on a mission to convert external clients
to its green way of thinking and building. He is the first to admit that it takes a lot of ‘preaching’ to convince clients of the benefits.
"I just arrived back from an appointment with an external client,” he reveals. “I talked with him about implementing renewable energy in their existing
real estate property.
“That is a far bigger challenge because it gives some technical problems, and because it’s quite unknown for the marketplace to implement these
measures.”
So has the company seen increased demand for renewable energy in housing? “Not that much,” Bac admits. However, he is quick to add that the government is meant to be taking steps to stimulate CO2 reduction. In recent negotiations though, discussions about subsidising these initiatives were not top of the agenda, according to Bac.
“Therefore, we see some movement in the market but not as much as we had hoped for,” he adds. Despite slow progress, renewable energy is an emerging market.
Current climate
It seems that the current economic climate has put a spanner in the works as far as the construction industry is concerned, with housing projects on hold, and the housing market itself virtually stagnant in the Netherlands.
Panagro still has some projects lined up for the coming year, including renovation projects, new housing for the rental market and a range of care
projects, or senior housing.
“It’s an area not really new for us but it’s evolving in scale because of the ageing society,” Bac explains. In the last four or five years, the company has cornered the senior housing market, which has shown rapid expansion.
“You now see projects for the more senior inhabitants of the Netherlands who want different accommodation to live in, with some extra services within the building,” he says.
“They are not really ready to go to hospital, or the more medical-oriented housing facilities, so there’s a market in between.”
Panagro may have diversified its operations over the years, but 2008 saw the group record a loss in turnover for the second time in its history. “It’s quite rare but it’s reality,” says Bac.
“It’s mainly due to the credit crisis and the stagnation of our development projects. Of course, it makes the situation a little bit uncertain for all of us, and not in the sense that we are afraid our company will go bankrupt – that’s far away from us. But
we have to take cost-cutting measures to overcome these periods.”
Competitive market
With competition for projects increasing, price is increasingly taking priority, even to the detriment of service. However, Bac knows that the company has the trust of its clients to and continues to secure contracts. “We have a trustworthy relationship with our customers so they keep coming back,” he explains.
“We gain that trust due to the extra services that we can provide – not just being a capacity providing company but being more service oriented.” Aside from having to face up to another possible financial loss this year, Panagro is determined to overcome the challenges. “It’s inevitable with the levels and the size of the company that we will have to shrink a bit to overcome the loss of turnover that we have,” says Bac.
“Do I have bright hopes? Of course I have bright hopes.”
View Digital Corporate Profile of Panagro in Construction Digital June 2009