Logistics Report

1.0 EXECUTIVE SUMMARY

Being one of the leading groups of engineering and construction companies in the world,

SNC-Lavalin is one of the most exciting and stimulating companies to read about. Having offices across Canada, U.S., and in 30 other countries is just a small dose of their interesting attributes. Throughout this paper, the reader will understand the relevant steps and activities taken by SNC-Lavalin on a daily basis and on all projects. Having an innovative advanced management system and interesting projects around the world that involves revenues that total over $3 billion for 2003 are just a few traits that will capture any reader's interests about a company. Having part ownership of the world's first all-electronic, open-access toll highway (Highway 407) is just one of the interesting acquisitions by SNC-Lavalin. Facing many expenses and still being able to gain a profit year of after year by such a large company is an achievement in itself. Reading such a report can only enlighten many in the endeavour's in which they would like to pursue.

Such a reputable Canadian company can only encourage entrepreneurs to reach for the stars in their business endeavour's. Learning about how a Canadian company achieved such a position in many of the industries can only encourage readers to work harder for their goals. After reading this report, you will gain an in depth understanding of the operations that go on every day at an inspiring world leading engineering and construction company.

2.0 INTRODUCTION

SNC-Lavalin is one of the leading groups of engineering and construction companies in the world, a global leader in the ownership and management of infrastructures, and a key player in facilities and operations management. The SNC-Lavalin companies have offices across Canada, in the U.S., and in 30 other countries around the world and are currently working in some 100 countries. The SNC-Lavalin subsidiaries provide expertise that covers all stages of a project's work plan, from the pre-feasibility study and financing, through the engineering, procurement, construction and management, to instrumentation, commissioning, operations and validation. They provide services to a variety of industry sectors including agrifood, biopharmaceuticals, chemicals and petroleum, defence, environment, heavy construction, mass transit, mining and metallurgy, telecommunications, industrial and manufacturing, power, and water management. SNC-Lavalin offers its expertise on a fee-for-service, turnkey or lump sum basis. It also offers internationally sourced project financing and equity investments for Build Own Transfer (BOT) and Build Own Operate Transfer (BOOT) projects, as well as privatization, including infrastructure management and day-to-day operations. SNC-Lavalin is a world-class player in the business of public-private partnerships, as demonstrated by its part ownership in Highway 407 near Toronto, which is recognized as one of the most successful road concessions in the world. Highway 407 is a critical component in the Greater Toronto Area highway network serving as a bypass and commuter route. Highway 407 is the world's first all-electronic, open-access toll highway. SNC-Lavalin has set the pace for technical innovation in engineering design and implementation with its multi-purpose Project Management System (PM+). It is a totally integrated database which covers all facets of a project, from initial planning to final commissioning, in one seamless package. The company uses 3D computer-aided-design and other standard technology. SNC-Lavalin has built a proven track of worldwide reputation for delivering projects on time and on budget. Founded in 1911 and active internationally for over 40 years, SNC-Lavalin's business units worldwide are autonomous and have access to global resources needed to assume total responsibility for every aspect of a project.

3.0 ENVIRONMENTAL BACKGROUND

"Concern for the environment and communities in which it operates, and a commitment to the safety and well-being of its people are key corporate values for SNC-Lavalin"

3.1 External Environment

SNC-Lavalin's operations strategy consists of several key elements:

o Build on its recognized expertise in its core sectors and develop new expertise in technical fields with promising growth opportunities

o Use its financing capabilities to enhance its competitiveness in major projects

o Use its technical expertise and financial capabilities to develop and acquire infrastructure concessions with solid fundamentals and potential

o Continue to leverage the international network it has built up over nearly 40 years

The construction industry is a seasonal industry in the sense that during the spring and summer months, SNC is much more productive and profitable. Due to union regulations and occupational health and safety regulations, SNC-Lavalin must have a continued commitment to all unions and there stipulations. For example, during the winter, all construction premises must be isolated from the outdoors if the temperature is below 2 degrees Celsius. The wind must be blocked with reinforcing panels and these evident areas need to be heated with portable heaters. These measures obviously increase expenses and therefore take a portion of the profit. The company does take into consideration these measures while bidding for the project, but most times under estimate these measures because of the unpredictable and inclement weather. Because of such measures, SNC-Lavalin has developed a risk management department. They have developed and applied rigorous risk assessment, mitigation and management practices to reduce the nature and extent of the financial, technical and legal risks under all contractual agreements. SNC-Lavalin's operating efficiencies combined with a culture of financial performance accountability among its work force, have permitted the corporation to achieve sustained results for over a decade.

3.2 Internal Environment

The construction-engineering business is highly competitive. SNC-Lavalin is one of the worldwide leading groups of construction-engineering companies and, within each industry sector, competes with one or more Canadian or international firms that concentrate on that particular industry. Such competitors are AMEC, Bechtel and PCL. Domestically,