MAKING HISTORY Having executed a total of 413 projects, including civilengineering contracts, commercial structures, hotels and thedevelopment of nuclear power plants, Daewoo Engineeringhas undergone a rapid rise within the Korean constructionsector. Mr SM Yang, General Manager of Daewoo E&C'sSecond Overseas Marketing Division, speaks to MariusGoubert about the company's past projects, future aspirations,and how, despite the economic recession, it has experiencedconsistent growth for its 10th consecutive year. �

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As a direct result of the broad rangeof knowledge and expertise which DaewooE&C has steadily accumulated throughoutits 37 years of operation, the company hasexpanded its capabilities to now includeconsultation and engineering services, plantconstruction, civil works and architecturalcomplexes. With an initial overseas expan-sion into Ecuador in 1976 (with DaewooEngineering being the first Korean construc-tion contractor to move into the region) thecompany has extensively increased its inter-national presence, with Daewoo E&Cturning architectural visions into physicalreality across Europe, the US, Africa, Asiaand the Middle East.

Past projects and present capabilities Outlining the company’s accelerateddevelopment since its foundation in 1973– when Daewoo E&C formed part of theDaewoo Group before it was established asindependent company in 2000 – Mr Yangexplains: “In 1978 the company advancedinto Libya with the construction of GariniusMedical School and, in 1988, we becamethe first Korean company to enter the USmarket through the development of a resi-

dential area for elderly retirees in Seattle,Washington.” Construction of the presti-gious Hilton Hotel in Algeria formed anotherkey project and helped to spearhead thecompany’s entrance into the African con-struction sector while, in 1993, DaewooE&C became the first Korean constructioncompany to receive ISO 9001 certification.“We were awarded Grand Prix at the 1st

Korean Civil Engineering and ConstructionAwards,” states Mr Yang, “and attained firstplace in the Construction CapabilityEvaluation by the Ministry of Land,Transport and Maritime Affairs for threeconsecutive years, from 2006 to 2008.”

Operating through four core divisions –architecture, building works, plant, civil proj-ects and housing – the company’s impres-sive project portfolio boasts a variety of highprofile developments ranging from highwaysto skyscrapers. Some of its most significantachievements include the construction ofone of Kuala Lumpur’s most iconic land-marks: Menara Telekom – a contract whichwas awarded to Daewoo E&C in 1995.Currently serving as the headquarters forMalaysia Telecom, this 310 metre structurecontains 55 floors, 22 open sky gardenswhile its unique shape was inspired by asprouting bamboo shoot. Additionally, thecompany played a major role in the con-struction of Incheon International Airport,and its civil projects division has beeninvolved in the development of numeroustransportation networks through the con-struction of roads, highways and harbours.Some of the company’s most significantachievements in this area include theIslamabad-Lahore six-lane highway, whichruns for 351.5 km and represents the largestroad development ever undertaken by anindependent construction company.

Through its plant division, the companyhas built more than 40 thermal, combined-cycle and nuclear energy plants and wasthe first Korean company to build a powerplant on a turn-key basis. Recently, the com-pany also gained ASME certification fornuclear assembly and, as Mr Yang explains,�

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“This attests our qualification for the repair,modification and replacement of nuclearpower plants.” Furthermore, through thecompany’s housing division, Daewoo E&Chas been proactive in its acquisition of con-tracts, with a total of 210,000 houses sup-plied worldwide since 1981. “We also havean institute of Construction Technology,which is the R&D arm of Daewoo E&C,and this has succeeded in developing cut-ting edge solutions for a variety of applica-tions such as sewage treatment and precastbridge-deck construction,” adds Mr Yang.

Major contracts Through 27 branches and subsidiaries,the company has been able to spread itsgeographical presence and cater to thediverse needs of customers across the globe.Speaking on the company’s major clients,Mr Yang goes onto explain: “Most are localgovernment bodies, oil majors and publiccorpororations. We currently have manyon-going projects in regions such as Libya,Algeria, Nigeria and various other coun-tries. Some of our major customers includeGECOL (General Electric Company ofLibya), NLNG (Nigeria Liquefied NaturalGas Company), SPDC (Shell PetroleumDevelopment Company), QP (QatarPetroleum) and Takreer (Abu Dhabi OilRefining Company). One of the most signif-icant contracts that the company recentlysecured was with the latter organisationand involves EPC work for Takeer’s cur-rent expansion of the Ruwais Refinery inthe UAE.

In March 2010, Takeer awarded EPCcontracts to four Korean construction com-panies worth USD $9.6 billion. The projectinvolves expanding the capacity of theRuwais Refinery and is part of ADNOC’s(Abu Dubai National Oil Company) strategyto supply the growing demand for petroleumproducts in both domestic and international

markets. It will increase Takeer’s refiningcapacity of crude oil by 417,000 barrels perday and is expected to be complete by 2013.“The contract is worth USD 11.7 millionand involves EPC work for 76 gas storagetanks and ancillary facilities,” claims MrYang. Furthermore, as part of Takeer’s inter-linking refinery pipeline project that willconnect the refineries of Umm Al Naar andRuwais (and eliminate the need for marinetankers to transport materials between thetwo facilities) Daewoo Engineering is in theprocess of carrying out additional EPC proj-ects with a total value of USD $272 million.Two other projects that Mr Yang is partic-ularly keen to highlight include EPC workfor the nuclear reactor for research andtraining in Jordan and the Utorogu-UghekkiEast Domgas Pipeline.

The former contract concerns an agree-ment recently signed between South Koreaand Jordan to build the region’s first nuclearpower plant. A consortium consisting ofDaewoo Engineering and the KoreanAtomic Energy Research Institute willconstruct a five megawatt nuclear reactorand a nuclear educational and trainingcentre at the Jordan University of Scienceand Technology. This latter facility is locatedin Irbid, which is 70 km north of the cap-�

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ital Amman. “The client for this project isthe Jordan Atomic Energy Commission,”informs Mr Yang. “The contract is worthUSD $130 million and involves EPC serv-ices for the five megawatt reactor and ancil-lary facilities.” Furthermore, the companyhas also acquired an EPC contract for100km of pipelines and ancillary facili-ties from Shell petroleum for work on theUtorogu-Ughekki East Domgas Pipelinesin Nigeria.

Safety and efficiency The emphasis that Daewoo E&C placeson enhancing the collective expertise ofits workforce has contributed extensivelyto the company’s ability to execute such adiverse range of operations. “Our Koreanworkforce numbers around 6,200 staff,”explains Mr Yang. “We maintain a perform-ance –centric HR system that focuses onprofessional competence. In addition, ourmanagement proactively expands careerdevelopment opportunities with a varietyof job-skill enhancement and self-develop-ment programmes. For example, every reg-ular employee joining Daewoo E&C shouldcomplete on-the-job training at overseasconstruction sites and English training foroverseas construction management.” Alongwith its core workforce, the company alsodepends upon around 22,000 locals andThird Country Nationals (TCN). “In order

to improve and train their skills, we are oper-ating training centres on almost every jobsite. We have developed a system thatenables local and TCN craft workers toassume responsibilities for the particularposition for which they are targeted andaim to transfer knowledge and expertisedirectly to them.”

A testament to the company’s achievements in HSE (Health Safety andEnvironment) management came when

Daewoo E&C achieved its targeted LTIR(Lost Time Injury Rate) of 0.10 with nowork-related fatalities in 2008. It was alsoawarded a certificate of appreciation by theQatar Chemical Company on the 28th April2010 in recognition of 25 million man hoursworked with no time lost through injury.Speaking on the company’s meticulousapproach to both safety and quality control,Mr Yang explains, “We follow the guidelinesof the OHSAS 18001 and ISO 14001. HSEperformance evaluations and a rewardsystem encourage all project sites toimprove their levels of compliance. Wealso apply standardised systems and pro-cedures when it comes to quality control,with the implementation of continuousinspections, guidance, training, evaluationand compensations on our work sites athome and abroad.”

Weathering the stormHowever, with the worldwide recessionheavily affecting the construction sector –particularly the housing market which, in2009, accounted for 25 percent of the com-pany’s sales (compared with 39 percent on2007 and 37 percent in 2008) – DaewooE&C is currently looking to increase itsinvolvement in overseas projects to compen-sate for this decline. “We expect that pooreconomic conditions will remain throughout2010 in the construction sector,” statesMr Yang. “Fortunately however we aretaking a number of steps to weather thestorm.” The development of a more bal-anced business portfolio through its con-�

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centration on international growth in thewake of the declining domestic housingmarket forms a key part of this strategy.“Furthermore, we are refining our order-taking process through better selectionand concentration,” he adds. This will seethe company prioritising public sector proj-ects, particularly turn-key and alterna-tive project markets, with Daewoo E&Cseeking to utilise its technical abilities toacquire major projects which demandspecialised expertise.

In addition the company is seeking tofurther diversify its operations through theacquisition of green growth and sustainableenergy projects. “We are aiming to expandour overseas market and focus on eco-friendly engineering and construction inthe areas of nuclear power generation,bio-energy and tidal power generation,”informs Mr Yang. “Some of our achieve-ments in this sector include the constructionof Sihwa tidal power plant and the devel-opment and export of the Daewoo Two-Phase Anaerobic Bio-Gas System (DBS)Engineering method.” As the largest tidalpower plant of its type in the world (evenlarger than France’s 200MW Rance tidalpower station), the Sihwa tidal power plantforms a key part in Korea’s effort to diversifyits energy sources and reduce overall emis-sions. The plant will have an output capacityof 254 MW and has also been designed tohelp improve the water quality of SihwaLake, which is located in the mid-west ofthe Korean peninsula.

The company’s development of theworld’s first Two-Phase Anaerobic Bio-GasSystem (DBS) – an engineering methodwhich utilises livestock waste for energypurposes – was ranked amongst Korea’s top10 new technologies for 2009. “This systemis particularly popular in Europe, (especiallyGermany) and we are looking to export itinto new international markets,” informs MrYang. Overall, with Daewoo E&C backed bysuch an impressive track record, the com-

pany has demonstrated its ability to utilisethe most sophisticated construction tech-niques to execute all manner of high profileconstruction projects. As it sets its sights onnew regions, the company’s proven ability toadapt to new markets and maintain its dom-inant position in the face of challengingeconomic crises, Daewoo E&C is achievingits vision. Morocco and Latin America arenext in line for this internationally respectedglobal player. �

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