The unstoppable rise of the CARI Group

by Dominique THIBAULT

Barely a year after the buyout of the corporation by the former BTP Carillion management team, the group led by Georges DAO is flourishing with success… A behind-the-scenes attempt to understand the secrets of such a dazzling success.

Present on all fronts, the company hasn't stopped since its official creation on November 12, 2004. It is managed by some sixty executive shareholders who have launched a marketing offensive throughout France, via autonomous regional offices in the domains of construction, public works, and services, with a policy oriented around local development through public and private partnerships. This fruitful strategy has allowed them to start a number of worksites in the Ile-de-France, Rhone Alps, Alsace-Lorraine, Champagne Ardennes and Mediterranean areas. Starting out with 1350 employees over six regions, one year later, the group has grown considerably to a workforce of 1780 over seven regions, with a turnover of about 330 million euro (22% higher than 2004). Their 2011 objectives are very ambitious : to double turnover and workforce, a 2% increase in productivity, and ten acquisitions per year.
Among the group's 2005 successful contracts, the most notable was undoubtedly the last December's Nice-Saint Isidore Great Stadium business pitch against a formidable adversary, the Vinci Group, architect of the Great Stadium of France. An important project that poses a veritable challenge for CARI, responsible for running the concession for the next thirty years. The management of the site is indeed complex and requires a number of expertises in a variety of fields : conception, construction, financing, maintenance and orchestration. But the challenge lives up to the stakes. It is the first time in France that a public service delegation working with a resident club, OGC Nice, is entrusted to a company in this sector for a duration this long and with no guarantee of revenue for the sites owner, the City of Nice. A pioneering experiment which could succeed if it proves to be conclusive, opening the way for the group in terms of other worksites of this kind in France and abroad over the coming years. In other words, CARI, aware of the consequences, has invested all of its living force in a sizable challenge : to outfit the (32,826 seat) stadium with a 6000m2 business and commercial park, a 750m2 panoramic restaurant, 36 residences, 7 reception rooms, a 3 field training centre, 3 consolidated fields, and a 3250-capacity parking complex, all for an estimated total of 90 million euro !

Meeting Georges Dao, CEO of the CARI Group

ASI : You explain in the project's presentation for the redevelopment of the Nice Stadium that you are going to invest 80 million euro, 10 million of which consist of different start-up fees, against 20 million euro at the beginning of the contract by the City and 40 million euro more from them to be paid to the CARI Group at the end of the concession. Can you tell us more about this financial set-up?

Georges Dao : It does seem complex but it's relatively simple. Seventy million euro will go to towards construction, the 10 million euro in start-up fees correspond to the legal costs, bank fees and taxes (work validation permits, marketing campaign at the pre-marketing phase, etc.) As for the Municipality of Nice, they are investing 20 million euro to renovate the infrastructure. They will collect 4.6 million euro per year, which represents almost 130 million euros at the end of our mandate as opposed to 100 million euros initially. The supplementary 40 million euro from the Municipality of Nice is a compensatory sum, balancing out the CARI Group's investments over 28 years in proportion to coming operations surcharges, which shall progressively increase, for obtained results and the collected dues.

ASI : And in the hypothesis of a catastrophe damaging the infrastructures, who would be the creditor ?

Georges Dao : In that case, it would all depend. If it is due to natural causes, the city should assume responsibility and expenses. If it is a result of a technical problem caused by the building's management or its maintenance, then the CARI Group is responsible.

ASI: What were your assets as compared to the Vinci Group ?

Georges Dao : Our project seduced the Municipality of Nice with both its architectural originality (a survey has shown that 82% of those asked preferred our business proposition) and its enticing price (saving them a total of 50 million euros !)

ASI : An avant-garde project but ne which curiously has not readapted its infrastructures to the new norms for persons with reduced mobility, as you will provide only 84 seats for those who are handicapped ?

Georges Dao : It was tough redeveloping all of the existing structures, which do not have access elevators and ramps up to the bleacher seats. We would have had to resize them to fit the wheelchairs, which posed a new problem : the security of these spectators during a match. So we chose to develop accessible but protected zones at playing-field level, which shall be expanded in time.

ASI : How do you envision the site's management?

Georges Dao : We are planning the creation of a public service agency, 100% of whose capital will be tracked by three autonomous branches for the duration of the construction : Cari Construction, Cari Management and Cari Maintenance. Then, once this phase has been accomplished, about 95% of the contract will remain in company shares, the remaining 5% open to exterior partners such as Palais Nikaia, for example. Indeed our main goal is to quickly create a permanent living space through optimising the exploitation of this exceptional place, which excepting matches is used only 25 times a year right now, for evening events.

ASI : Could the Nice OGC be a stockholder or even an owner of the Nice Stadium ?

Georges Dao : We are the contract-holders of the site and our responsibilities stipulate that we must work in partnership with the Nice OGC, something we are doing in involving them in the applied ticketing policy and giving them 20% of profits. The club cannot be a major stockholder here ; the Municipality of Nice is the sole owner and will recover the building at the end of our contract. Nice OGC is ostensibly more interested in the acquisition of the business park so that they may create a training centre as well as several buildings around the stadium to serve as residences and offices.

ASI : What is the next step ?

Georges Dao : As soon as the permit is issued (it was registered on March 15, 2005), once the legal 16-month delay is reached, meaning the beginning of July 2006, if everything goes well we should be able to get started on the construction. We envision finishing at about the end of September 2007, with the stadium being ratified in October 2007 for the effective management to begin as from November 2007.

ASI : Besides the Nice Stadium, for several years now you have expressed your desire to diversify into other sectors, such as organising events with the management of business and congress centres (the CICA, Agora Einstein at Sophia Antipolis, recently Nice Acropolis). Aren't you afraid your strengths shall weaken if you distance yourself too far from your trade ? How far do you envision going ?

Georges Dao : We first respond to the needs of the market and we seize all opportunities that arise. In the case of CICA, we were interested in consolidating our technical management and building maintenance experience through operating a business breeding-ground, an experience which serves us today in managing Agora Einstein, bought out last summer from France Telecom after lacking buyers for four years. Our strategy consists of enriching our initial skill through the development of new capabilities, in financial engineering for example. We also envision acquiring a 5000m2 office building near Agora Einstein, and making a collaborative pilot project with EDF and France Telecom that will serve as a model in integrated sustainable development in the competitivity centre. One advances only by taking risks and being innovative ! At least that is our credo here at the CARI Group."

And the CARI Group is indeed advancing. While it awaits results of the business pitch for the Nice Acropolis' Conference Hall (the final verdict should be this June, with work starting January 1, 2007), the company has launched a media campaign in partnership with the Nice Cote d'Azur Chamber of Commerce and Industry, causing quite a stir. Here's our feedback on this action-packed affair…

Nice Acropolis, the never-ending saga...

Built in 1954, the Nice Acropolis Conference and Exhibition Hall, long considered one of the most successful sites in the world in terms of technological equipment and services, began showing losses in 2002 and was offered for sale by the Municipality of Nice. The story has several chapters. After the abandonment of the accepted candidate in 2003, Lyon's GL Events company, the mandate of the Nice-Acropolis Association was renewed by the city for another two years. Four offers for a Public Service Delegation were made on January 15, 2005, for a duration of eight years : besides GL Events once again, there was Unibail, the Nice-Acropolis Association with the British Turner corporation and a public/private tandem partnership, the Nice Cote d'Azur CCI and the CARI Group. Their ambition in this partnership ? "To establish a veritable sustainable development strategy in order to maximise economic profits and encourage employment," explained Dominique Esteve, President of the Nice CCI. In 2004 the spin-offs were evaluated at 300 million euro, with 179 shows, 668,000 participants, and 2238 direct jobs through the 200 affiliated companies. This confirmed and justified the major role of the site as a tool in the economic development of the region, despite all of the debate. Georges Dao himself had stated that the site was outdated and needed to be modernised (35 million euro in work is planned) in order to "make it productive, just like a real company." If they win the pitch, the two candidates plan to create a two-party mixed-economy company (50% each). They are planning to keep the existing 106-person workforce, whose skills shall be "more useful after adequate training", to double marketers' budgets and to increase international business via corporate events (meaning 70% from conference shows and company conventions). Ostentatious ambitions likely to be less appreciated by their fellow contenders, especially the Turner Group, a pioneer and leader of Facilities Management in Britain, where it is proper to be discreet before the announcement of the final decision. Turner France's Managing Director, Denis Chambrier, infuriated by an excessive media campaign, has decided to explain to us his point of view on the subject…