POSCO E&C Strives for Top Position
in Domestic Civil and Environmental Fields

Capitalizes on expertise and experience arising from the 40-year construction of POSCO steel works.

POSCO E&C was a general construction company established on December 1, 1994 to maximize the POSCO Group's synergetic effects by raising technological prowess in the engineering & construction field through integration and management of engineering expertise and experience that has been accumulated over the 40 year-old construction of advanced steelworks in Pohang and Gwangyang.
In 2006, POSCO E&C ranked 7th place in terms of construction capability and grew to be one of the top 10 contractors in Korea. The company is now striving to expand business horizons in both Korea and abroad with the goal of evolving into a world-class contractor.
In the early years since its establishment, POSCO E&C focused on steelmaking plant projects. The contractor is known to be an exemplary company who has successfully advanced into not only civil engineering and environmental businesses but also housing and architecture since 2000. POSCO E&C has been emerging as a dark horse in the biddings of the civil engineering and environmental project markets with cut-throat competition in recent years despite its short history.
The following are the excerpts of an interview with Senior Executive Vice President Kim Ik-hee, who heads POSCO E&C Civil & Environment Division.
Question: What business areas are you placing emphasis on this year?
Answer: The construction industry is a field where priority is placed on aggressive activities to land diverse projects ranging from design-build projects and the lowest price system and PPI works. Second, we strive to secure technological power. We have been promoting collaboration with global players in order to elevate our technical standards on the construction of long bridges and long tunnels. Finally, we have a strategy to specialize into areas where we have strengths. POSCO E&C will have to possess the most powerful weaponry to survive the civil engineering and environmental fields, as Samsung Electronics conquers the global semiconductor market.
Take a look into the competitive edge POSCO E&C has in the civil engineering and environment sectors. POSCO E&C has a lofty track record of rewriting our nation's map by reclaiming a vast coastal area of 89.1 million sq. meters around the Yeongil Bay for the site of the POSCO steelworks in Pohang and the Gwangyang Bay area of 18.15 million sq. meters for the site of the Gwangyang steelworks. The contractor has participated in many projects, including the 7.4 km-long Gwangan Bridge, the nation's longest maritime bridge and PPI projects on the construction of a railway and an expressway leading to Incheon International Airport.
In particular, POSCO E&C is taking the lead in the light railway project market as the company is undertaking the Busan-Gimhae light railway project and has been selected the preferred bidder of the planned Ui-Shinseol light railway project.
POSCO E&C has been establishing itself as a leader of the advanced waste water treatment and waste smelting system market as the contractor accumulated diverse experience and expertise in the course of the construction of the steelworks'large-capacity waste water treatment facilities, dust-collecting equipment and incinerators.
Lately, POSCO E&C is aggressively trying to explore overseas markets to hedge against risks of the domestic construction market that is too saturated to grow further and stabilize its business portfolio. The contractor looks to focus on the private sector-proposed and government-approved projects rather than the construction area done under a contract system where Korean companies have lost their competitive edge to local and Chinese counterparts. An example of this focus is the construction of expressways in Vietnam, and Korean contractors have been recognized for their higher technological levels.
To name a few, representative projects in Korea POSCO E&C is participating, there are such PPI railway projects as Incheon International Airport railway and Busan-Gimhae light railway; expressway projects like the Gimcheon-Yeongdong route and Seocheon-Gongju route;
housing infrastructure development project in Dongttan, Hwaseong and Pohang New Port berth construction in the port and housing construction fields; and Hakil waste water treatment plant in Incheon and a environmental and energy facility project in Goyang in the environmental sector. The Incheon International Airport Railway Project Phase I was opened to traffic this past March 23rd, and Phase II project for a 61 km-long railway that stretches from Seoul Railroad Station is completed by 2012. The light railway project for constructing 18 stations and a car depot on a 23 km-long light railway linking Busan and Gimhae is proceeding without a hitch.
As one of its representative overseas projects, the Civil & Environmental Division is carrying out a project to expand the Lang-Hoa Lac Expressway in Vietnam. The project on a 27.8 km-long expressway linking west of Hanoi and Ha Tay Province, which broke ground in April 2005, is to be completed by December 2008.
The project calls for constructing one of Vietnam's most advanced expressways with a design speed of 120 km and 140 meters in width and 10 lanes - six for automobiles and four for two-wheeled vehicles - at a cost of 351 billion won. In return for the execution of the expressway project, POSCO E&C has been awarded a license to develop the second new satellite city on a plot of 5.94 million sq. meters on top of the North An Khanh new urban complex whose construction has begun lately. POSCO E&C is trying to land such civil engineering and environmental projects as Vung Tau cold-rolled steelworks port project, North An Khanh urban development projects and a waste water treatment facility project in Jalisco, Mexico.
Among the upcoming projects full of potential in the civil engineering field POSCO E&C is seeking to enter are Smart Highways, repair/rehabilitation technology, mega-port, old port redevelopment, underground space and railway sectors. We also plan to invest into such projects as joint industrial complex development projects and highly viable tourism/leisure complex development projects in cooperation with provincial autonomous bodies.
Emerging as promising projects in the environmental area are Clean Development Mechanism (CDM) projects, Polychlorinated Byphenyl (PCB) treatment and contaminated soil reclamation projects. In particular, POSCO E&C has an interest in participation in eco-city projects being promoted as joint ventures between the private sector and the government on the basis of having a sound financial structure.
Q: Will you comment on competitiveness in an era of global competition and strategies POSCO E&C is adopting in this regard?
A: Competitiveness is tantamount to contractors'survival strategy in an era of global competition. There are competitive factors, including technology, money and planning. Technological power is the key to have the other two factors. In this regard, POSCO E&C is striving to earn recognition both in Korea and abroad by aggressively fostering technology-intensive areas and launching offensive strategies to land orders.
It is an essential for contractors to have capability to carry out project planning and management systems ranging from project development, planning, financing and operation. POSCO E&C is performing a lot of PPI projects by making the most of experiences the company has accumulated in the course of the execution of PPI projects in Korea, particularly in collaboration with domestic financial institutions.
The domestic construction industry is changing its paradigm from conservative, traditional construction to a creative one based on the integration of new technology beyond the limitations. In step with the trends, our division has raised R&D outlays from 1.2 billion won in 2006 to 1.4 billion won, a 16 percent jump. We have created a technology development roadmap calling for investing 6.4 billion won into the implementation of 25 tasks by 2015. To this end, the division has selected core businesses, including long bridges and light railway projects in the civil engineering filed and pyrolysis application technology in the environment sector from 2005.
Q: Will you tell our readers your views about the current contract system for projects?
A: Lately, academic, research and business circles have sorted out long-standing problems about the contract system and created solutions, which have not yet to take root in the industry. The lowest price system and the optimal qualification evaluation system have degenerated into lotteries, while design-build projects are in the process of revamping due to a lack of fairness and reliability. In order to revamp the domestic contract system, it is the most rational to introduce the best value system that not only gives more weight to enhancing autonomy of the market in keeping with global trends but also comprehensively evaluates such factors as technology and quality taking greater emphasis than price.
Q: Will you tell us about the 2007 business goal and your resolutions as the head of the Civil & Environment Division?
A: As I already mentioned, we are doing our utmost to aggressively land orders with the goal of evolving into a domestic major contractor. In particular, our firm's competition with majors is expected to heat up the domestic turn-key market, so our division staff members throw their soul and heart to outbid them and establish a bridgehead for entering the foreign market with the goal of becoming a world-class contractor. Our division's vision is to rise to the No. 1 position in the domestic civil engineering and environment sector and make a leap forward toward a global player. nw

(from above photo) Artist conceptions on a train and a station on the Ui-Shinseol light railway line project, to be done by POSCO E&C.

POSCO E&C Senior Executive Vice President Kim Ik-hee speaks about priority projects of his Civil & Environment Division during an interview.

(from above photo) Bird's eye views on the planned North An Khan urban development project in Vietnam and an eco-friendly energy facility in Goyang City, Gyeonggi Province, to be executed by POSCO E&C.