OHL Group Annual Report 2015

Activity Report 2015 • OHL Industrial

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A reference company in the market for EPC projects in the sectors of Oil & Gas, power, mining and cement

La Jacinta Solar photovoltaic plant. Uruguay.

Activity Report 2015

OHL Industrial

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OHL Group Annual Report 2015 OHL Group Annual Report 2015

Activity Report 2015 • OHL Industrial Activity Report 2015 • OHL Industrial

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MARKET AND STRATEGY

During 2015, OHL Industrial has kept its commitment to becoming a reference company in the Engineering, Procurement and Construction (EPC) turnkey project sector, complementing its activity with the provision of industrial plant operation and maintenance services, engineering and construction of equipment for the mining and cement sector and development of fire-fighting and safety systems.

In 2015, sales in this division increased up to 352 million euros, a 50.3% increase with respect to the previous year. Furthermore, in line with its 2015-2020 Strategic Plan, OHL Industrial has focused its international development on the OHL Group’s home markets, achieving valuable contracts in Mexico and Chile, amongst others.

Position of OHL Industrial

Clear international focus.

Development of EPC projects and operation and maintenance (O&M) service provider.

Concentration of activity in power generation, mining, cement and Oil & Gas, maintenance of the solids transport facilities and fire protection and security businesses.

Markets of OHL Industrial

America: United States, Mexico, Colombia, Peru, Chile, Guatemala, Uruguay and Honduras.

Europe: Spain.

Middle East: Jordan, Oman, UAE and Saudi Arabia.

Southeast Asia: Vietnam.

OHL Industrial sales in 2015 amounted to 352 million euros, an increase of 50.3% over 2014

Performance in the Oil&Gas and mining markets during 2015 has constituted a huge challenge for OHL Industrial. The drastic fall in the price of oil and expected stagnation in the price of minerals has reduced the investments foreseen in both sectors, increasing competition amongst EPC companies.

Consequently, OHL Industrial’s objectives for the next few years still respond to its committed sustainability and generation of cash, established in the 2015-2020 Strategic Plan, prioritizing the procurement of projects in sectors with a higher return and larger cash-generation capacity.

The division has worked extensively over 2015 to reinforce its technical and management capacity, as well as to develop and implement cutting-edge IT systems in order to maximize its operating efficiency.

OHL Industrial has continued in 2015 with the execution of EPC projects in power generation and Oil & Gas in Mexico, Honduras, Uruguay, Guatemala, Oman and Jordan

OHL Group Annual Report 2015

Activity Report 2015 • OHL Industrial

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RELEVANT ACTIVITIES

EPC PROJECTS

During 2015, the operative model designed by OHL Industrial for EPC projects has been consolidated, executing all projects under this same operative model and production/control system.

Of relevance is the award in Mexico, by Comisión Federal de Electricidad (CFE), of the Empalme I combined cycle plant, in the state of Sonora. It is the first combined cycle plant that OHL Industrial is executing on a turnkey basis. It will run on natural gas, with a power of 770 MW, and will be fitted with two Siemens technology type H turbines. Once it is operating, in late 2017, it will supply electricity to north Mexico, where energy demand is expected to increase at an annual rate of 3.6%, according to CFE’s estimates.

Also in Mexico, OHL Industrial has continued executing large EPC projects over 2015, in the energy and Oil&Gas sectors:

• 60 MW co-generation plants in Coatzacoalcos, Veracruz, and a 30 MW plant at the Francisco Madero I refinery, in Tamaulipas. They are all at the commissioning phase and will be handed over to the client in 2016.

• The hydrogen plant at the Ing. Hector R. Lara Sosa refinery, in the state of Nuevo León, a sulfur solidifying plant, the Degollado repumping station, in the state of Jalisco, are all making good progress.

The 57.7 MW Xacbal Delta hydroelectrical plant is one of the main renewable energy generation projects being executed in Guatemala. During 2015, huge progress has been made and excavation of the headrace tunnel has been practically completed. Work continues in the dam area, in order to detour the Xacbal River in early 2016. In this project, OHL Industrial is also providing social value to the local communities.

In Honduras, since June 2015, a facility is operating to grind, carry and store raw materials in the factory of Cementos del Norte (Cenosa), where a storage and transport circuit for schist and limestone has started up, as well as a new 900 t/h grinding facility.

Cogeneration plant at the Francisco Madero I refinery, in Mexico (above), and Xacbal Delta hidroelectric plant, in Guatemala.

The award in Mexico of the Empalme I combined cycle has been the most significant milestone in the field of EPC projects in 2015

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Activity Report 2015 • OHL Industrial Activity Report 2015 • OHL Industrial

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In Uruguay, the client has been delivered the completed La Jacinta Solar 64.8 MW photovoltaic plant. This has set a milestone, as it is the first large-scale solar plant in the country and one of the largest photovoltaic projects in Latin America. It covers the electricity needs of approximately 35,000 homes and will remove approximately 74,142 tons (t) of CO

2 emissions each year.

In Oman, a contract is being executed to update two hydrocarbon plants: the Saih Nihayda gas plant and the Saih Rawl process plant. Once adjusted, the plants will be able to maximize the recovery of condensed hydrocarbons present in natural gas extracted from the fields. Commencement of construction work has deployed a huge logistic operation to establish a camp in the desert for 600 persons. At the same time, engineering and purchasing activities are being completed, and the manufacturing of equipment and materials continues.

In Jordan, OHL Industrial is executing a strategic storage terminal for oil products, able to hold 340,000 t of oil derivatives and 10,000 t of liquefied petroleum gas (LPG). Engineering and stockpiling activities are drawing to a close, whereas construction work is quite advanced, particularly for the assembly of LPG spheres and diesel storage tanks.

ENGINEERING AND EQUIPMENT SUPPLY

MINING AND CEMENT

In 2015, OHL Industrial has achieved a contract to supply 30 new units and to update four existing ones for the cement factory owned by Cementos Fortaleza, located in Tula de Allende, Mexico. Furthermore, it has been awarded an EPC project to extend the existing line for the treatment of lead mineral, copper and zinc generated by the Colquijirca Mine in Pasco, Peru, owned by Sociedad Minera El Brocal. This project is a consequence of the client-supplier relationship that was consolidated following OHL Industrial’s successful execution of two EPC projects in the same mine.

In turn, projects to supply 36 carrier belts and 16 process drums have been successfully completed for the DAP/NPK fertilizer manufacturing plant in Ras Al Khair, Saudi Arabia, owned by the mining company Ma’aden.

FIRE-FIGHTING, SAFETY AND TELECOMMUNICATIONS SYSTEMS

In Spain new contracts have been achieved to design, supply and install passive protective systems in most of Spain’s nuclear plants, to basically include protective measures for HVAC conducts in the Ascó and Almaraz plants. Also of interest is the work during the fuel reloading period at the Cofrentes nuclear plant and facilities in new alternative centers for emergency treatment.

In the active protective measures sector, this year we have achieved more awards in refineries (Cepsa), the industrial sector, food and mining with projects for automated warehouses in Mayoral and Mango, OSI Foods and EMED Tartessus, to name a few.

Storage facility for Cementos del Norte, in Honduras (left), and cooper treatment plan for Codelco, in Chile.

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In construction and infrastructures, despite a fall in activity, communication, safety and fire-fighting systems have been executed in the Terrassa stations of FGC (Ferrocarrils de la Generalitat de Catalunya), and hotel projects in the Canary Islands.

Also of interest are activities in the international market, with the start-up of an office in Mexico, Chepro MEX, a facility contract for the Gustavo Adolfo Fricke Hospital in Chile, and the commissioning of extinguishing systems in a thermal plant in Suez (Egypt).

SERVICES CONTRACTS

Performance in services contracts (operation and maintenance, O&M) has been very favorable in 2015, achieving a high level of return and production values in all of these.

Of relevance is the rhyolite grinding plant for Minera Escondida (BHP Billiton) in Chile, achieving 100% of all secured values and contractual objectives.

Also in Chile, operation and maintenance has been consolidated in a copper treatment plant for Codelco (Corporación Nacional del Cobre), reaching production values of more than 610,000 t/month. Due to its good performance and savoir faire in O&M, OHL Industrial was named a preferential contractor by Codelco in the Ministro Hales Division, granting it a leaching contract for the oxide plant. This same client has awarded OHL Industrial a Health, Safety and Environment (HSE) zero-accident prize for 380,185 accident-free hours.

Since October 2015, operation and maintenance is being executed in the 64.8 MW La Jacinta Solar photovoltaic plant, in Uruguay. The generation values reached since then exceed 99.5%.

In Spain, the 50 MW Arenales thermosolar plant, in Morón de la Frontera (Seville), and the 50 MW biomass plant in San Juan del Puerto (Huelva) have surpassed the values expected.

In Mexico, the co-generation plant in the Pajaritos complex in Coatzacoalcos has been successfully developed, in the same way as project management services for the 42-inch Los Ramones 2, north and south, oil pipeline EPC.

OHL Industrial was named a preferential contractor by Codelco in the Ministro Hales Division, granting it a leaching contract for the oxide plant

Los Ramones pipeline, in Mexico (left), and La Jacinta Solar photovoltaic plant, in Uruguay.

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Operation and maintenance services on the rhyolite plant of Minera Escondida,in Chile.