Rapid expansion in Vietnam, Indonesia, South Africa, Turkey, and Argentina (the VISTA countries) is creating a second wave of emerging market construction opportunities, according to auditor PricewaterhouseCoopers (PwC).

According to PwC's latest report on merger and acquisition activity, engineering and construction (E&C) companies have already found opportunities for growth through the establishment of operations in the BRIC countries - Brazil, Russia, India, and China - and are now seeking to capitalise on new demands in the VISTA countries in order to stay ahead of the curve.

Construction is booming in places like Indonesia and South Africa, where the economy is rapidly expanding, but improvements to infrastructure are needed to sustain growth, according to PwC.

"E&C companies have significant opportunities to win work as governments increasingly open doors to inbound investment, through private-public partnerships, private finance initiatives, joint ventures, foreign direct investment, and partnering," the report said.

"As the BRIC countries continue to be saturated by multinational corporations, the VISTA countries are an alternate option for consideration. Weak but stable currencies in several VISTA countries also affords E&C companies competitive advantages and opportunities to supply developed countries with raw materials and products".

VISTA country governments view foreign investment as an important source of capital for their economies, while China and Russia in contrast give the advantage to local businesses over outsiders and have policies in place to restrict foreign companies from investing in strategic sectors.

"VISTA countries appear to be the next region poised for tremendous growth," the report said.

In terms of E&C merger and acquisition activity during the fourth quarter of 2010, PwC said that 48% of larger transactions (valued at US$ 50 million or more) involved targets in Asia and Australasia. This compares to 43% of large transactions in the third quarter. China was the strongest driver of activity.

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