Public Benefit

Public Benefit

Construction companies on the Gulf Coast are rushing into public

work, but one construction company is already there in a big way.

by Jean Gruss | Editor/Lee-Collier

While rival companies were chasing private developers during the recent construction boom, Fred Edman stuck with municipalities and nonprofit health care institutions.

Edman, president and owner of Fort Myers-based Wright Construction Group, says building schools and assisted-living facilities offered more financial security. It's paying off now because private developers aren't building as many new projects as they were during the boom and Edman's company is benefiting from the relationships he's established over time.

During a challenging 2007 for the construction industry, Wright managed to grow revenues by 35% to $61 million. The company ranks as the 153rd largest company on the Gulf Coast and the 22nd largest construction company in the region.

Before the boom, Edman learned a valuable lesson. In the two years from 1999 to 2000, Wright doubled its volume of work but it wasn't ready to handle the growth. Edman says the company "stubbed our toe" on several projects as quality suffered.

Edman says it was a valuable lesson that prepared him for later challenges. "It's not about being big," he realized. "It's about the size you can manage. Since that time, I have walked away from projects." It wasn't easy, but the firm's survival depended on it. "What it did was it made me decide we're going to make sure we service the clients we had and not chase new business."

Edman focused on improving its quality and internal functions by hiring a vice president of operations and investing thousands of dollars in project-management software. The company went through a process by which it documented everything so that it could create a template that it could replicate. The idea was to mirror the predictable and repeatable process the way McDonald's does with its hamburgers.

"Why can't I apply that to construction," Edman remembers thinking. Now, the success of a project doesn't necessarily depend on any single person and it allows Wright to manage the 22 projects it has now without sacrificing quality. "It only works if it's documented," he says.

The strategy shift has paid off today because clients know what they're getting when they hire Wright. "During the down time our clients are taking good care of us," Edman says. "The fruit is ripening now."

The company is so well established and now has such a good record that its bond-insurance capacity is $125 million. "You hire me so you don't have to work so hard," Edman tells customers.

This is important because rival construction companies are scrambling to land public-sector work as the private developers halt new developments in the face of weakening demand and oversupply of offices, warehouses and shopping centers in many areas of the Gulf Coast. About 90% of Wright's work now is for the public and nonprofit sectors.

To be sure, government revenues are falling as tax collections fall because of slower sales and declining property values. For example, construction of new schools is slowing because enrollments are declining as people move out of the state. "The sizeable projects aren't as prevalent," Edman says.

Like many of its competitors, Edman is targeting renovations of existing buildings and smaller projects. "We can install a door or build a 12-story building," he says.

Edman, 43, bought his father's interest in the company earlier this year. It has been operating in Fort Myers since 1980 and its territory is the five-county area from Charlotte to Glades, Hendry, Lee and Collier.

A deeply religious man, Edman says the company has no debt. That may be one of its biggest advantages in this downturn. "Wright Construction has never borrowed money," he says. "I love being able to hold onto that."

SUMMARY

Company. Wright Construction Group

Industry. Construction

Key. Size only matters when it comes to how well you manage it.