CH2M HILL clears final hurdle, obtains a general contracting license to operate in China

By Karen Moltenbrey

Following a complex, 14-month application process, engineering firm CH2M HILL (Denver, CO) received a general contractor’s license from the Shanghai Ministry of Construction in China, enabling the company to extend its range of services in what has become one of the largest markets in the world.

The license allows CH2M HILL to provide consulting, engineering, project management, construction management, and fully integrated engineering, procurement, and construction services in China, including those requiring extensive cleanroom facilities. Moreover, it positions the firm for future general building and public works facilities.

CH2M HILL is one of only a handful of North American-based engineering contractors that now have this wider capability, says company spokesman Brian Mershon.

In 2004, the Chinese government paved the way for non-Chinese-based companies that qualify for licenses to legally perform work in the country. However, there are restrictions attached to the license. According to David Rosamond, CH2M HILL vice president, the size of a project that his company can undertake is limited to an amount that does not exceed five times the sum of prepaid registered capital, which is currently at 20M Chinese RMB ($2.48 million US).

With offices in Shanghai, Hong Kong, Beijing, and Tianjin, CH2M HILL for the past 12 years has been conducting business in China, working with a number of local companies there. The license, however, opens the door to more extensive work. Prior to receiving the license, the company could only perform pieces of construction and engineering projects in the country; now, it is able to focus on projects in their entirety.

According to Rosamond, the company is anticipating the Chinese market to be quite large, especially given the significant levels of direct foreign investment in that country. In fact, as a direct result of the China license, CH2M HILL already has been awarded major projects in chemicals, heavy industry-equipment, automotive, and metals manufacturing.

“We are working almost exclusively with multinational companies, and will continue to do so throughout China,” Rosamond says of the company’s current plans. “[The license] will position us to serve our multinational clients’ expansion plans in the industrial marketplace, to fulfill Chinese demand.” These include pharmaceuticals, electronics, food and beverage, manufacturing, chemicals, communications, consumer products, automotive, energy, and other specific Chinese market needs.

Rosamond notes that CH2M HILL has very high expectations concerning the pharma, food and beverage, and electronics segments of this burgeoning marketplace. He acknowledges that the company presently has three ongoing projects within these fields requiring cleanroom space and several others that have been recently completed (see chart).

Ongoing and recently completed CH2M HILL projects requiring cleanroom space in China.
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