Vision 2020 to increase overseas share of revenue to 70 percent by 2020 with seawater treatment projects as new growth engine
GS E&C declared its mid- to long-term Vision 2020 to aim for being a sustainable global company by seeking out future growth engines overseas to upgrade itself as a total global company in order to expand the portion of its revenues from overseas to 70 percent of its total annual revenue by 2020, the company said recently.
In order to achieve the vision, the company reorganized its setup by integrating its overseas operations into the Overseas Operation Headquarters along with the Domestic Operations Headquarters, and the Management Support Headquarters to detail the strategies to achieve the vision and secure the strength for the push to diversify the company total operations and regions in which it operates, as well as strengthen its overseas branches to be more localized.
In particular, the chief global officer (CGO) has taken charge of the entire overseas operations, acting as a control tower to support the efforts to secure more overseas projects. The overseas branches will further be empowered to be more localized so that they will become the bases for overseas operations.
Under the CGO, the support units have been set up to help the civil and construction sectors to expand their overseas operations at the early stages, along with each headquarters supplementing their operations with the expansion of their overseas related businesses.
GS E&C has been maintaining stable operations, despite the slowdown in such key construction sectors as transportation, energy, environment, and related infrastructure around the world. Its operations in such regions as Asia, Central and South America, the Middle East, and Africa are expected to pick up centered around emerging market countries as the company will beef up its operations in civil and power plant and environment and green construction markets, away from its plant construction operation.
In terms of project types, the company also wants to take up planning and project proposal-type operations in addition to development-type projects with project financing and investments to the extent the company will become a leading builder with the ability to create its own projects overseas.
Last year the company won a 400 billion won project to build a subway in Singapore and picked up a 660 billion won project to build a gasification plant, and this year the company secured a 1.4 trillion won project to build a multiple thermal power plant in Saudi Arabia with its share coming to 720 billion won.
In addition, the company clinched a project in Kuwait to build an LPB storage tank worth 620 billion won from Kuwait National Petroleum Co., followed by a 600 billion won project to undertake the Wara Pressure maintenance facility and a water softening plant worth 200 billion won in Ajure, Kuwait °™ both large projects at the same time. The company won 1.4 trillion won worth of projects in Kuwait last year, considered the most stable country in the Middle East region.
The water treatment plant that the company won in Kuwait was the first such project overseas for the company, which would create synergy with other overseas projects. The company experienced building the Chungryang water regeneration center worth 250 billion won and other large water treatment projects at home as well as the waste water treatment plant in Bahrain worth $70 million, which the company won in September, 2010, played a key role in the company winning similar projects overseas.
The company actually included in its Vision 2020 the water plant facilities as one of its future growth engines to rank it among the top 10 water treatment facility E&C firms in the world by 2020. The water treatment plant includes waste water treatment plants, reverse osmosis (RO) plants, water reuse plants, and water treatment plant management, with all of them included in the company’s project portfolio. A road map to pursue the goals to firmly establish its presence in those sectors has been completed.
GS E&C has taken over Inima OHL in Spain, a global water treatment company, to rank itself as a leading water treatment company in the world as part of its strategy to be a leading global water treatment facilities builder.
President Huh Myung-soo and other top executives visited Madrid in June to finalize the takeover of the Spanish company and meet with top executives of the company at its head office in Madrid.
GS E&C signed an official agreement to take over the company in November 2011 and made its final payment on May 30 this year to finalize the takeover. GS E&C has become the first Korean construction firm to take over a foreign company overseas in an M&A to open a new business horizon for Korean construction firms.
Huh said in Madrid that communication among the officials of the two companies is a key matter to make the Spanish company a new wing for GS Group and that he and GS Management will take the first step in that direction.
Inima, established in 1967, was an affiliate of OHL Group and was engaged in construction, ranked 10th globally in the water treatment industry in the world. Since its founding, the company completed more than 200 water treatment facilities around the world, most recently in Algeria where the company completed a water treatment facility capable of handling 20 tons of sea water daily.
The Spanish company is considered to have the capacity to build a sludge treatment plant with the capacity to take care of as much as 384 tons of sludge daily, the largest in Europe.