SK Engineering and Construction (SK E&C) has introduced a global delivery platform in order to secure resources for its sales and construction activities. The builder is pushing for global projects on the foundation of this platform.
SK E&C is utilizing competitive joint stock companies in Southeast Asia and the Middle East. In 2011, SK E&C will expand its capabilities by forming strategic ties with global EPC companies such as Jacobs, CCC and Sinopec, as well as large facility suppliers such as GE. The company is also planning to reinforce its price competitiveness by seeking partnership with trading and construction companies in China and India. The headquarters of SK E&C and overseas bases will manage the development and expansion of human resources. Its overseas engineering centers, such as ‘SKEC America’ in the US and ‘SKEC India’ in India, are recruiting talented engineers in cooperation with headquarters.
SK E&C is pushing ahead with a total solution provider business model. The contractor is planning to maximize profitability by creating a highly profitable business model beyond an Engineering Procure-ment Construction (EPC) -oriented business structure. The company won a 1.15 trillion won order to build a large aromatic plant in Singapore. SK E&C will carry out all processes, such as EPC, plant operation and maintenance, project finance and condensate supply and sales together with subsidiaries of the SK Group.
Last year, SK E&C won orders from four countries, Ecuador, Singapore, Qatar and Turkey, in the plant sector. These accomplishments were more meaningful as the company received orders from around the world, such as Asia, Europe and South America beyond the Middle East, the traditional main market for SK E&C. Last November, the company received an order amounting to approximately US$950 million to build a thermal power plant in Turkey. The project is to establish three 150MW Lignite-based thermal power plant units.
The power plant will be built in a mining area of the Tufanbeyli region 350km away from Ankara, the capital of Turkey. SK E&C will carry out all procedures such as design, procurement, construction and test operation of power generation facilities such as coal supply facilities. The contractor also made a foray into the telecommunication sector of Qatar.
SK E&C signed a US$34 million contract to build a telecommunication system in Qatar last October. The deal will pave the way for SK E&C to kill two birds with one stone – tapping into the overseas telecommunication market and securing a stable business portfolio in the world construction market. In March 2010, SK E&C signed a contract for the front-end engineering & design (FEED) for a project to build the Manabi Oil Refinery Plant which can refine 300,000 barrels of oil per day in Ecuador. The deposit stood at US$260 million.
The significance of this contract is that it allows the company to enter the basic design sector.
The basic design sector is the core part of an engineering process dominated by advanced companies in the U.S. and Europe. Only a small number of builders are able to carry out the basic design of a large oil refinery plant capable of procesing 300,000 barrels of oil per day.
As SK E&C won the contract for the Manabi Oil Refinery Plant, the company seized the opportunity to grow into a world-class engineering and mega project management company, while elevating the level of the Korean construction industry.