Daelim Industrial Strives to Be
World-Class E&C
Makes an offensive in project financing

Daelim has grown into a world-class contractor, armed with experiences and expertise it has acquired in mega-projects at home and abroad in such fields as building & housing, architecture, petrochemical plant and power plant.
As the first Korean contractor to export its own construction technology abroad, Daelim has contributed to the development of the national economy in the past 60 years since its founding in 1939.
Lee Yong-koo, vice chairman of Daelim Industrial Co., Ltd was one of the CEOs of the top 10 contractors which were awarded with a thank-you plaque on May 17 in recognition of contributing to Korea's achieving the US$200 billion mark in the accumulative value of landed overseas construction orders. Daelim ranked third among Korean contractors with US$14.1 billion worth of projects.
The company is focusing on beefing up its business capability on the plant engineering sector in which it has acquired profound experiences and expertise in a bid to make profits and forging alliances with advanced foreign companies to cope with new developments like the size of projects getting bigger and ensuring proper risk management. The following are the excerpts of an interview with Daelim Industrial Co., Ltd Vice Chairman Lee.
Question: Could you elaborate on the current projects Daelim Industrial has undertaken and the ones your company has been awarded so far this year?
Answer: Mega-projects like the EWDP Project for Kuwait Oil Company in Kuwait, Ethylbenzene Project in Iran for Petropars and IIP Project in China for BASF, being undertaken by Daelim are in the final stage. Daelim is conducting South Pars Gas Development Phase 6, 7 & 8 project of Petropars in Iran and Low Density Polyethylene (LDPE) Project of Amir Kabir Petrochemical Complex (AKPC), in Iran.
Propane Dehydrogenation(PDH)/Polypropylene(PP) Project in Saudi Arabia and Fluid Catalytic Cracking (FCC) Project in the Philippines , of which design and procurement are under way are to break ground in the second half of the year.
The company won the US$180 million for FCC Project from Petron Corporation last January. The project designed to upgrade the existing facilities in the industrial complex of Bataan, in the Philippines is executed by Daelim Industrial on a turn-key basis in all aspects ranging from engineering design, procurement of materials and equipment, and construction to start-up.
Daelim and Tecnimont of Italy have inked an early work agreement on a US$610 million petrochemical plant project in Al-Jubail, Saudi Arabia, last January. They are to sign the contract with Sahara Petrochemical Co. and Basell Polyoletfins on the turn-key project on constructing plants capable of producing 470,000 tons of PDH and 450,000 tons of PP per annum.
Take a look into the overseas plant market during 2006. New orders on mega-projects like crude oil, gas exploration and petroleum refinery and petrochemical plants are forecast to increase as oil producing countries of the Middle East have accumulated extra revenues, caused by crude oil price hikes in the past few years, and the ones involving global majors are also on the rise. The global plant construction industry is entering a boom as countries in the Asian region are predicted to resume investments into new plant construction and expansion projects in the wake of the economic turnaround following the Asian financial crisis. In particular, Thailand is planning to invest in new plant construction and expansion projects with a goal of transforming the Southeast Asian country into a petrochemical hub.
Being recognized as an EPC contractor with technological prowess by project owners, Daelim Industrial is expected to win high-quality orders from Saudi Arabia, Kuwait and other countries of the Middle East. As starting with the projects it has won from the Philippines early this year, Daelim is likely to make a strong showing in the Southeast Asian region as part of its efforts to diversify markets. It aims to land an additional US$500 million orders during the rest of the year.
Q: What know-how and strengths do you think your company has?
A: Daelim Industrial is one of Korea's representative contractors which have contributed to building the cornerstone for the development of the national economy for the past 60 years since its inception in 1939. The company has made strides by accumulating experiences and expertise in such fields as building & housing, architecture, petrochemical plant and power plant. As the first Korean contractor to export its own construction technology abroad by making the most use of the experiences it has acquired at home, Daelim Industrial has evolved into a world-class contractor that undertakes mega-projects on several parts of the globe.
Daelim has been reorganized as an engineering and construction company with a competitive edge in the wake of its 1999 consolidation with Daelim Engineering Co., Ltd, which was recognized for its capability in such areas as EPC project, and it has strengthened its competitiveness by forming strategic alliances with advanced contractors in the petrochemical sector.
In particular, Daelim possesses excellent expertise concerning every aspect of the polymer sector ranging from design to operation as it owns and operates petrochemical plants.
The company has been repositioned as an EPC contractor in the power plant sector as it completed a 180MW combined cycle power plant for BASF-YPC in Nanjing, China last year and it is undertaking a 1,000MW combined cycle power plant in Gwangyang with completion scheduled for this year, both based on a turn-key basis.
Daelim, recognized for expertise and technological prowess in the plant engineering sector in such countries as Southeast Asia, the Middle East and the United States, has been credited with having executed petrochemical, power plant, gas and refinery projects based on a turn-key method in a seamless manner.
Q: Will you introduce project financing undertakings your company is carrying out?
A: Provision of project financing like buyback and export finance constitutes an essential factor in winning mega-projects.
Orders of refineries and gas projects remain solid and the size of the projects is getting bigger. Even Gulf Cooperation Council countries (GCC) and Iran with thick pockets tend to favor project financing undertakings in the form of equality participation and attract development funds of advanced countries to hedge against risks. In this backdrop, Daelim is aggressively participating in project financing corresponding to the size of projects and the demands of project owners in cooperation with the Korea Export-Import Bank(KEIM) or outlets of advanced foreign countries.
Daelim has teamed up with TEC, JGC of Japan and IDRO of Iran to undertake the ongoing South Pars Phase 6, 7 and 8 project under a US$1.66 billion project financing by Japan Bank for International Cooperation(JBIC) and Nippon Export and Investment Insurance (NEXI), both in Japan. The company completed the LDPE Project of AKPC, Iran with a 130 million euro project financing facility from Korea Export Insurance Corporation (KEIC) and Export Credits Guarantee Department (ECGD), UK. The EB Project for PPC of Iran is at the final stage under a US$50 million project financing from Korea Export-Import Bank.
Daelim's project financing undertakings under way with partnerships with foreign financial institutions are sure to serve as opportunities for a Korean company to show off its financing capabilities to foreign companies.
Daelim strives to forge partnerships with foreign companies to explore financing undertakings with a competitive edge.
Q: Will you tell our readers about your company's vision and plans with the goal of developing the overseas plant industry as a national growth engine?
A: The EWDP Project in Kuwait and South Parts Phase 6, 7 & 8 Project in Iran and Shanghai IIP Project in China are in the final stage. The US$610 million PDP/PP plant project in Saudi Arabia Daelim jointly won with Tecnimont of Italy and the US$180 million refinery project in Bataan, the Philippines broke ground in the early 2006. The company attaches priority on completing projects on schedule.
As part of its efforts to land more orders, Daelim is going all-out to explore countries of the Middle East other than the existing mainstay markets -- Iran, Kuwait, Saudi Arabia. In the mid- and long-term perspective, the company is making strenuous efforts to enter the markets in Southeast Asia and Central Asia.
Daelim is putting more energy into rejuvenating the overseas plant engineering industry by making the most of the experiences and expertise it has acquired in the course of implementing projects at home and abroad. It has accumulated experiences and expertise in such sectors as oil & gas, refinery and petrochemical plant. Daelim Industrial is striving to explore overseas power plant markets as it successfully completed BASF YPC Combined Cycle Power Plant Project last year and will finish the Gwangyang Combined Cycle Power Plant Project on an EPC turn-key basis this year.
The company focuses on beefing up its business capability on the plant engineering sector in which it has acquired profound experiences and expertise in a bid to make profits and forges alliances with advanced foreign companies to cope with new developments like the size of projects getting bigger and ensuring proper risk management. nw

Lee Yong-koo, vice chairman of Daelim Industrial Co., Ltd

Daelim Industrial Vice Chairman Lee Yong-koo shakes hands with Chairman of Iran Chamber of Commerce Seyed Alinaghi Khamoushi during a Korea-Iran economic cooperation committee meeting held in Seoul on May 23-25, 2005.

Daelim is building South Pars Gas Development Phase 6, 7 & 8 projects of Petropars in Iran.