Engleberth grows despite building slowdown

Vermont Business Magazine, Jan 1994 by Edelstein, Art

In a year that continued to plague the faltering construction industry in Vermont with bankruptcy and slackening workloads, Engelberth Construction Inc of Colchester reported a jump in sales from $40.3 million in 1992 to $69 million for this year. Otto Engelberth categorized 1993 as "more busy than we've ever been."

But, said Engelberth, the year's sales figures are not as positive as it might first appear. Some of the sales figures represented a carryover from a delayed project from the previous year. The Wake Robin residence project in Shelburne, an $11 million project, had been delayed from 1992, thus boosting 1993 sales figures.

Engelberth did experience sales of $20 million when it completed what its president called "fast-track retail projects" in the Plattsburgh, NY, area. The company built the Wal-Mart shopping center at Consumer Square. That project began in April and was recently completed. There was also $10 million in revenues from its construction management contract with the state for the Newport Jail. Currently the company is at work on a big project at Rutland Plaza.

There is no secret to the Engelberth success, said its president. "We've tried to stay close to our customers and their needs. But needs change and we look at the future to be aware of what's happening."

Engelberth said he approaches customers with a philosophy that emphasizes "making construction enjoyable and creating value for a customer." He said the company can boast of a volume base of 70 percent from previous customers.

Another way to keep sales steady is to have "a well-organized sales effort." Engelberth has a sales force that covers northern New York, Vermont and New Hampshire. The company, he said, sees growth in New Hampshire and is establishing a sales office in Bedford, near Manchester, for that purpose.

Engelberth employs 200 people in all aspects of the work. He said a strength of the company lies in the number of project managers with as much as 10 years experience with the company. "There's a lot of loyalty," he said.

While 1993 was the biggest sales year for the company, Engelberth said he doesn't anticipate that 1994 will produce the same growth. He sees more modest sales of $50 to $60 million.

Engelberth said growth will slow for a variety of reasons. Construction in New York will be hesitant until the effects of the air force base closing in Plattsburgh have stabilized. The decrease in the number of Canadian shoppers coming to New York and northern Vermont to shop will also affect construction.

With the number of shoppers down, he anticipates less shopping mall construction. As fewer Canadians spend their money on this side of the border, he said, there will be fewer motels, hotels and restaurants built. His own Hampton Inn at Exit 16 on Interstate 89 has seen a significant decline in Canadian traffic, he said.

"The construction volume in Vermont will continue to shrink," Engelberth predicted. From 1991 to 1993, there were a significant number of projects in various stages of the permitting process, but this will not continue, he said.

"We don't see those projects pursued, and there is a lack of state government spending on capital expenditures," he said.

Engelberth said he is positioning his company by continuing to diversify its construction base, although it will not enter the residential home market. Also, he said, the company has plans to open a branch "further south on the Atlantic coast."

Art Edelstein is a freelance writer from East Calais.