Our rise will go on, says Gentoo’s chief

May 19 2008 by Chris Knox, The Journal

A HOUSING company is looking to move on from controversy surrounding its city renewal programme and double its turnover to £160m by next year.

Despite problems facing the wider building industry, Sunderland-based Gentoo Construction believes it can continue its impressive rise due to its not-for-profit business model and its long list of urban regeneration projects.

The firm was originally spun out of Sunderland City Council in 2001 as part of the Sunderland Housing Group, which took on around 36,000 council houses to begin refurbishment works. As part of the arrangement, the group agreed to carry out the controversial demolition of around 3,500 homes at a number of run-down estates in order to replace them with around 2,500 brand new properties.

The multi-million pound project, taking in areas including Southwick and South Hylton, is due to be completed by 2018.

But it already has led to complaints from residents, who have reported lengthy waiting lists, unnecessary demolition work and slow progress on the replacement homes.

However, with residents moving into the project’s first development in Pennywell earlier this year, Gentoo Construction’s managing director Dave Piggett is looking to complete the biggest period of growth in the firm’s history and prove the critics wrong.

He said: “There have been a number of criticisms of the company since we spun out of the council. The fact is that it was agreed early on that we should pull down around 3,500 homes for regeneration purposes.

“Due to a number of different reasons, this process has been slower than expected over recent years, but now we are well on the way to replacing those homes over a number of stages and, with other projects in the surrounding area, create more homes than we have had to knock down.”

These projects include the £3.8m refurbishment of a row of Victorian townhouses off Ryhope Road in Sunderland, and the construction of 63 residential apartments on High Street.

With all its profits invested back into the business, Gentoo has been able to finance a number of non-housing projects outside Sunderland in recent years, including the £500,000 redevelopment of the clubhouse at Houghton-le-Spring Golf Club in County Durham.

The company is also looking to bid for a contract to extend part of Newcastle University.

Mr Piggett said: “We’re in the unusual position of being such a large business but not having any shareholders to please.

“This means that we are able to have more freedom in the types of projects we take on as well as take advantage of greater levels of self investment.

“Of course we realise that there are a number of difficulties in the construction market at the moment as a result of the credit crunch, but believe that we will still be able to double our turnover because of the variation of our projects and our growing reputation under the Gentoo banner.”