A Quest for Overseas Projects

Daewoo Construction to step up rush for increased project orders overseas


Daewoo Engineering & Construction Co., one of Korea's biggest builders, won $846.8 million in orders to build power plants in Libya.
The company signed contracts recently to build two combined-cycle power plants for General Electricity Co. of Libya, Seoul-based Daewoo Engineering said in filings to Korea's stock exchange recently.
The orders were estimated to be worth $787 million in a recent filing when the projects were first announced.
The construction company secured record overseas orders last year, helped by a boom in demand from Saudi Arabia and other Middle Eastern nations.
Daewoo E&C expects sales to rise at least 7.1 percent to 6 trillion won this year, it said in January.
Seo Jong-wook, president of the construction company, said he will go for increased orders in overseas work projects for the company this year by strengthening the overseas project unit at the company. He said the Overseas Marketing Headquarters Department will be reorganized to exclude the
overseas construction unit so that it can focus entirely on winning overseas project orders with increased mobility.
CEO Seo said the cooperation among various departments in the company is of crucial importance in winning overseas projects and he will come up with some measures to make it happen to the maximum extent possible.
The Daewoo executive said he will make sure that the company will cooperate with its sister Kumho Construction in selective areas, ruling out head-on competition with Kumho due to the difference in scale and areas of operation.
Seo, however, said Daewoo will compete with Kumho in a friendly manner when it has to during the process of its operation, especially, at home.
Daewoo E&C has been working on strategies to win LNG plant construction orders in Sakhalin, Russia, to supplement its weak areas such as plant design and management of LNG plant construction projects, although it has built a solid reputation in the area of plant construction.
Hilary Mercer, project manager for Sakhalin Energy Investment Co. spoke highly of Daewoo's technology level for plant construction. The company has been building highly dangerous gas plants, managing workers from many foreign countries who are not that concerned with safety. Mercer said his company will again turn to Daewoo when it builds more gas plants.
Daewoo currently is engaged in the construction of an LNG liquefaction plant in Sakhalin based on Japanese design. The project, however, is not a simple construction work, but requires a high degree of technology to build the facility.
What Daewoo needs is the know-how to build trains to expand its share of the LNG plant construction market like its rival CBNI has done by building a train in Chile, a core part of an LNG liquefaction plant.
According to sources, Daewoo may be able to secure some $3 billion worth of construction project orders in Libya soon, now that Korea Express, which has been maintaining its presence in the North African country for more than a decade by undertaking the construction of the Great Manmade Canal, and Daewoo have become members of the Kumho-Asiana Group.
Daewoo expects to clinch some $1 billion worth of projects connected to the great canal project in cooperation with Korea Express.
Daewoo has been in Libya since 1978, undertaking $10.3 billion worth of various projects and Korea Express has taken over the construction of the great canal from the defunct Dong Ah. The two companies hold a 25 percent stake in Al Nahr Co., a professional canal construction firm in the North African country. Libya's Great Manmade River Authority (GMRA) holds a 50 percent stake in the company.
Libya plans to invest $60 billion in various construction projects by 2010 and the country's shift to becoming a pro-Western country is expected to favor Daewoo and Korea Express in securing more project orders there. nw

LNG Plant in Bonny Island in Nigeria

President Seo Jong-wook of Daewoo Engineering and Construction Co.