Further Globalization Ahead

Doosan Heavy takes over Kvaerner IMGB in Romania for its inroads to Europe

Doosan Heavy Industries and Construction Co. has acquired Kvaerner IMGB, a Romanian power generation equipment material manufacturer, in a move to step up its globalization initiative. The company is the largest power generation material manufacturer in Romania and Doosan wants to expand its material manufacturing capability in Europe and penetrate the European market with full force, Doosan officials said recently.
The deal was signed at Ritz-Carlton Hotel in downtown Seoul June 19 between Senior Vice President Choi Young-chun in charge of Casting and Forging BG at Doosan and Anders Misund, Executive Vice President of TH Global to take over 99.75 percent stake in the Rumanian company.
Kvaerner IMGB launched its operation as a government-owned machinery manufacturer in 1963 and was privatized after being acquired by the Kvaerner Group of Norway in 1998. The company is Romania's largest casting and forging company with a 13,000 ton press, the world's largest(equal size to Doosan's) and an annual capacity of 140,000 tons.
About 75 percent of the company's business is in hydro power plant equipment, a field in which it has secured global recognition. Most of its products are exported to Europe, the Americas, and Asia.
Doosan plans to operate Kvaerner IMGB as the second material supply base after the casting and forging shops in Changwon. Although the global casting and forging at a rate of 4.1 percent annually, market demand on large cast and forged products is now somewhat greater than the available capacity.
With this acquisition, Doosan expects to increase its casting and forging manufacturing capacity by 70 percent and plans to evolve into the world's largest casting and forging company. The added capacity will also resolve the shortage of material in the power and shipbuilding industries and provide a continuous growth engine for the domestic industries.
To achieve its vision of becoming the "No.1 Global Company,"Doosan is aggressively establishing a global network with the acquisition of AES, and RO water treatment specializing company in the U.S., renamed Doosan Hydro Technology in 2005.
Doosan on March 3 unveiled 2006 mid-and long-term plans, calling for, among others, a push for exploring overseas market and fostering futuristic businesses. The company decided to strengthen its presence in the power generation and construction market of the Middle East where an increasing number of mega-project orders are being placed in the wake of a boom created by the inflow of oil dollars due to high oil prices.
Doosan will focus on the U.S, nuclear generation construction market, and Asian-African power generation and desalination construction markets. The company will strengthen overseas business capabilities through its overseas production operations and expanded global outsourcing and others to raise the overseas sales to account for 60 percent of its total annual sales this year. Doosan will try to book 4,656 billion won in project orders, 3,923 billion won in sales and 301 billion won in ordinary income in 2006, a rise of 27.5 percent, 18.8 percent jump and a 36.1 percent increase over the previous year. The company plans to raise its orders booked to 6,226.4 billion won, 6,306 billion won in sales and 576.6 billion won in ordinary income by 2010.
Doosan has its sights on developing the technologies of new and renewable energies like wind power and fuel cell that will serve as a driving force in the development of futuristic industries.
Doosan has a superb record for getting large overseas orders including such projects as Sipat Thermal Power Plant in India, Suaibah Desalination Plant in Saudi Arabia and Sequoyah Nuclear Power Plant unit 2 in the United States and the high-speed railway project in Taiwan. nw

Doosan Heavy's desalination plant built overseas.

Doosan Heavy Industries and Construction President Lee Nam-doo.